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Insurance needed for manufacturing plants

Finding the right type of insurance for manufacturing plants can be tricky for several companies. Insurance not only needs to fit the needs of the employer, but it needs to provide a benefit to the staff members as well. Having insurance is necessary if you are going to stay in business. The insurance not only helps the plant run smoothly, but it also lures in potential employees. There are several types of insurance available for manufacturing plants; here are some of the most common:

Commercial Liability Insurance
Commercial liability insurance will pay for the damages that were caused while an employee was on-site. Commercial liability insurance will also pay for any legal defense needed for claims. If your manufacturing plant does not have commercial liability insurance, your facility will be responsible for any damages. Commercial liability insurance does come with some packaged deals that can save your company money. Usually commercial liability insurance comes with properly and general liability insurance. They will cover the liability needs of the facility.

Business Owner Policy Insurance
Business owner policy insurance (BOP) provides liability and property coverage for manufacturing companies. Some businesses are not eligible for BOP insurance simply because they are too large for their premiums. There are other insurance options available if your company does not qualify for BOP. Companies that are eligible for BOP insurance can use it to cover any expenses that are a result of damage to property or injury to an employee. The BOP insurance does not give plant owners the ability to determine the coverage limits for filed claims. Your manufacturing plant is also not covered from negligence. The amount of liability coverage will be based on assets. Liability insurance will also cover the legal fees for your company if someone files a lawsuit. Certain machinery can even be covered with the BOP insurance, allowing your company to receive a brand new machine if the other one breaks down.

Business Interruption Insurance

Business interruption insurance is an addition to BOP insurance. This insurance will cover any lost income amounts, expense amounts, and disaster related losses. The business interruption insurance will protect the manufacturing company from losing money due to an unforeseen circumstance. It will cover operating losses due to a fire or another accident. This coverage will be in tact until your plant is fixed and you are able to resume business as normal.

General Liability Insurance

General liability insurance will protect your manufacturing plant from any property damage and bodily injury claims. It can be purchased as part of BOP insurance or as a separate package. In order to qualify for general liability insurance, the insurance company will look at a couple things:

  • The amount of risk that is associated with your manufacturing plant. If your facility manufacturers hazardous materials or operates heavy machinery, there is a greater risk for your employees. The plant is at a greater risk of being sued than smaller companies and you will need more coverage than other companies.

  • The state in which you're manufacturing plant operates. Each state has different rules and regulations for manufacturing plants. Some states, like Michigan and Wisconsin, have higher coverage limits because the state is known for awarding higher damage amounts.

No matter what, you need to have insurance coverage if you are operating a manufacturing plant. Speak to several insurance companies to make sure that you are getting the best coverage for your manufacturing plant. Insurance is normally sold through brokers or insurance agents. If you contact multiple brokers and agents, they will be able to tour your facility and give you an estimate as to the coverage amount you will need. Always check on the insurance agent's license before you sign a contract with them to make sure everything is legal and correct.

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