As a manufacturer, your business must meet certain standards and responsibilities. The unique nature of manufacturing businesses requires comprehensive manufacturers insurance as well. You should understand the risks your manufacturing business faces to target your insurance coverage appropriately. There are some key risk factors that every manufacturer should understand.
Manufacturers Insurance Covers Compliance Exposure
Most manufacturers are bound by regulations and mandates for their unique industry. With so many compliance factors, from data security to material handling, something might get overlooked. When that happens, the penalties for lack of compliance can add up quickly. The right insurance policy can help shoulder those costs for your business.
Compliance exposure coverage may help pay the legal fees associated with any litigation, audits, and other related expenses for regulatory compliance checks. In addition, some policies cover retrofit expenses to ensure compliance going forward.
Address Third-Party Risks
Manufacturing operations depend heavily on the consistency of third parties for materials, logistics, and some services. When one of those parties fails to meet their deadlines, refuses to fulfill an order, or shuts down completely, your insurance coverage can help your business offset the associated losses. You might face delays, customer order cancellations, and increased costs for last-minute orders from another source.
Protect Against Business Interruption Losses
When you choose your manufacturers insurance policy, choose one that includes business interruption coverage. Disruption of your operation, whether due to government mandates, natural disasters, or supply chain issues, can cost your company significantly. When you need to cover the bills, meet your payroll obligations and sustain your company in the face of an unavoidable shutdown, business interruption insurance can help.
Cybersecurity Coverage is Critical
With increased network penetrations, data theft, and ransomware, especially in critical infrastructure and production businesses, every manufacturing business owner should recognize the threats associated with cybersecurity challenges. Even the most stringent security measures may fail to prevent every possible breach. The right insurance policy addresses that risk with complex data breach and cybersecurity coverage.
These policies provide various coverage solutions, including ransom payments to restore data access, restitution for losses associated with reputational harm, crisis management support, and consumer restitution payments. When you offer credit monitoring services and other solutions to customers affected by a data breach, your policy may cover those costs.
With manufacturing operations embracing automation and technology, your cybersecurity policy should also cover costs associated with any hack of your equipment that damages your product, disrupts your production line, or jeopardizes your company’s intellectual property.
Protecting your business requires proactive investments in the right insurance coverage. When you recognize the risks covered by manufacturers insurance, choosing the package that fits your company’s needs is easier. After all, insurance coverage should adapt to your company’s specific risk factors. Create a comprehensive manufacturers insurance package that protects your property and equipment and your compliance risks, third-party disruptions, business interruption, and cyber threats.
Contact a Brooks, Todd & McNeil Agent Today!
With so many things to consider, you need a fully customized insurance solution that fits your business’s specific and unique needs. An independent agent at Brooks, Todd & McNeil can help determine the coverages you need to keep you and your business protected. To learn more about our products and services, contact us today at (800) 448-4567.