Commercial insurance is a complicated subject. Every business must carry certain types of insurance. However, industrial businesses require a number of non-traditional commercial policies due to a higher risk of workplace injuries or injuries caused by the products they manufacture.
Every industry has some unique standards, as well. The needs of a manufacturing plant will differ from that of a logging company or construction company, for example.
We look at the different insurance programs for industrial businesses so you can decide which policies you need.
Categories of Insurance Programs for Industrial Businesses
Like personal insurance, professional insurance is meant to protect a business in the event of damage to buildings, as well as equipment, materials, and other assets. It also includes liability protection in the event of an injury to an employee or anyone who enters the property.
There are several commercial insurance types. Let’s look at those now.
1. General Liability
Every business needs general liability insurance. This protects against legal claims that are the result of injuries that occur on your property. For instance, if someone visits your plant and gets injured by a falling object, you could be liable for those injuries and medical expenses.
Three ways liability coverage protects businesses:
- Bodily injury that occurs on the premises or when using your product
- Medical payments due to injuries
- Damage to someone else’s property
- Damages caused by slander, libel & copyright infringement
It should be noted that liability insurance does not cover your commercial property or injuries to employees.
2. Commercial Property Insurance
Commercial or business property insurance is meant to protect your property from damage or theft.
- Buildings & offices
- Equipment & furniture (including computers)
- Tools & machinery
- Inventory & materials
- Business documents
- Exterior signage, fences & grounds
This covers property damage caused by a fire, storm, or water (burst pipe). Be sure to check your policy as flooding due to storms and hurricanes may not be covered. Some states require you to buy separate flood policies. The same rule often applies to damage caused by earthquakes.
3. Workers’ Compensation
Workers’ compensation is used to protect your business from employee claims due to on-the-job injuries. Workers in manufacturing or industrial plants are at a higher risk of injuries and even death in the most serious cases.
There are three leading causes of work-related injuries:
- Overexertion & repetitive motion (31.4%)
- Slips, trips & falls (26.7%)
- Contact with other objects or equipment (26.2%)
The Survey of Occupational Injuries & Illnesses conducted by the Bureau of Labor Statistics found there were 2.8 million non-fatal workplace injuries in 2019. Manufacturing and construction were among the top ten most dangerous occupations.
When you’re working with dangerous equipment, tools, or chemicals, you can expect injuries and illnesses, no matter how many safety protocols are in place.
4. Equipment Breakdown Insurance
This is sometimes called “boiler and machinery insurance”. It’s designed to protect your company in the event of damage or breakdown of electrical infrastructure or essential equipment. The policy you need will depend on your specific industry and how you use the equipment.
5. Business Interruption Insurance
There may be a time when your company has to shut down due to equipment failure, an emergency, or a major weather event. Downtime can quickly add up to production delays and loss of income. Business interruption insurance will help cover lost revenue until the event is over or equipment is repaired.
6. Commercial Vehicle Insurance
Just like personal auto insurance, commercial vehicle insurance is meant to cover all company-owned vehicles that are used on and off-site.
Commercial vehicles can include:
- Company cars
- Delivery vans
- Utility vehicles
- Commercial trailers
- Personal vehicles used on the job
There are three basic parts of commercial auto coverage: physical damage, liability, and coverage for medical payments, towing, rental reimbursement, and loan/lease gap coverage.
7. Product Liability
This type of commercial insurance protects your company from claims that are the result of product defects, manufacturing defects, warning/use defects, and strict liability. If a product you manufactured injures someone, your company could be held liable for those damages.
Insurance for Construction Companies
When it comes to construction companies and contractors, you need insurance that addresses key areas of risk, including ergonomic issues, equipment, cranes, scaffolds, and excavation sites.
There are three main categories of contractors, and the insurance you need may be according to your specialty:
- General building contractor
- Heavy construction contractor
- Specialty trade contractor
Along with the seven basic types of commercial coverage, you may also need a custom-tailored plan for things like:
- Inland marine insurance
- Owners and contractors protective liability
- Project-specific coverage
- Surety bonds
- Contractors environmental legal liability
- Owners protective professional indemnity
- Project cargo and marine delay
A risk control consultant or property risk engineer can help you determine the areas of your greatest risk.
Insurance for Manufacturing Plants
Manufacturing runs the gamut from food/beverage and metals to plastics and printing/publishing. You may need coverage to protect your business against claims due to service interruption, defective products, or product recalls.
Along with basic commercial coverage, you may also need industry-specific insurance:
- Manufacturing errors & omissions
- Manufacturing selling price insurance
- Product recall insurance
Consult with an insurance professional to determine the type and amount of coverage you need.
Lumber and Logging Industry
Any company that is involved in cutting, processing, or loading of trees or cut logs/lumber needs industry-specific logging insurance. In addition to general liability, workers’ compensation, commercial auto, and commercial property, there are other policies to consider including:
- Tools/Inland marine insurance
- Truckers liability
- Truckers commercial auto
- Commercial umbrella
Do your research to find a trusted logging insurance company to get the coverage you need for your business.
Protect Your Business With the Right Insurance
Running your business takes blood, sweat, and tears. Along with delivering excellent products, you want to protect your enterprise with the right commercial insurance programs. Industrial companies have specific needs so consult an expert to determine the policies and amount of coverage you need.
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