Manufacturing insurance for businesses

Product recalls can most commonly be characterised as resulting from any of the following events or conditions:

1. Unsafe products
   Products may have an imperfection, deficiency or defect that creates a dangerous situation. As a result, these unsafe products can potentially cause bodily injury or property damage.
2. Manufacturing defects
   Manufacturing defects can potentially result in bodily injury or property damage for those businesses providing component parts to be used in the final assembly of products. A related concern is Impaired Property, when the tangible property of others cannot be used or is less useful because it incorporates a defective product. In this case, a recall event may be triggered by the need for the customer to recall the product that incorporates your component item.
3. Adulteration
   Affecting consumable products, adulteration involves the contamination of products and may include microbiological, chemical, allergen or physical hazards, mislabelling, and actual or threatened tampering. Such events can be accidental or unintentional, as well as intentional.

High-quality manufacturing insurance should help you recover if a serious incident damages or destroys your premises or machinery. It shouldn't just cover the cost of repair or reinstatement but also help replace lost income.

Employers’ liability insurance is also critical, covering issues arising from employing people, supplying customers and the eventual use of your products. Moreover, depending on the type of manufacturing business you run, and its supply chain, you may also need insurance for stock, goods in transit, book debts, and more.

Putting that tailored cover in place can be complex and time-consuming, especially as it is often harder to find cover for things like the manufacture of safety-critical related clothing and equipment.

All of this makes it essential to get help from an expert. After all, true peace of mind comes from knowing you have the right manufacturers' insurance cover in place – not just generic, ”off the shelf” cover – at the right price. By collaborating with an expert in risk management, manufacturers can minimise their risk exposures, including the risk of worker injuries, cyberattacks, and the impact of severe weather. Adequate business interruption cover is vitally important.

Equipment breakdown insurance is sometimes called machinery breakdown insurance, mechanical breakdown insurance or accidental failure cover. This type of insurance covers

• Costs to replace or repair damaged equipment
• Loss of income resulting from equipment failure
• Spoiled stock
• Costs incurred as a result of any rebuild or restoration.

Equipment breakdown insurance protects your critical equipment. From mechanical or electrical machinery to computers or communication systems, this cover will assist with unexpected costs caused by an unexpected failure.

If you’re a manufacturer and hold a general liability (GL) policy, you may have some gaps in your cover that you didn’t realise.

While you’ll likely be covered for bodily injury and property damage resulting from your products, services, or operations, there are some critical exposures your GL policy might not cover, such as products liability.

You may think that general liability insurance would also extend to cover product liability claims, but it isn’t always the case. Due to their complex nature, product liability claims and necessary recalls are highly specific, especially in food and drink. Consequently, they tend to be more expensive than a general liability insurance policy will allow, often exceeding the limit of a traditional general liability policy.

Learn more about the potential gaps in your insurance cover.