Manufacturing is a very important industry. In the United States, this market is valued at $8.8 trillion as of 2022, according to industry research reports. In fact, manufacturing has been the backbone of the global economy since time immemorial. The sector is responsible for creating many jobs and also for generating revenue through exports and imports.
However, manufacturing plants are business assets that are high-risk in nature as they are prone to several accidents and losses due to natural disasters as well as man-made calamities.
The Economic Policy Institute reports a decline in this industry in the past couple of decades, mostly due to policy issues. One can't, however, deny that the losses the industry suffers also play a vital role in this decline. Thus, if you own a manufacturing plant, you must get it insured.
As a business property, you have to get the right business insurance for it by getting in touch with the right insurance companies that offer such property insurance, which in this case should be commercial property liability insurance.
It covers damaged property, including your manufacturing plant structures and commercial equipment. If you're not sure why such insurance policies are necessary, let's talk about why business owners like you must insure their manufacturing plants.
A natural disaster is an event that causes widespread damage or loss of life. This can include floods, earthquakes, tornadoes, and hurricanes, all of which could lead to your manufacturing plant being severely damaged or destroyed. Extreme weather conditions usually cause natural disasters, but they can also be human-made (like an oil spill).
Your plant could be flooded, equipment damaged, or in the event of an earthquake, it could completely fall apart. Wildfires can also cause you a lot of trouble. To protect your business from financial losses due to natural disasters, there's no alternative to commercial property insurance.
Malfunctions in Machines
Malfunctions in machines can cause injuries, financial losses, business losses, and environmental damage. They can also lead to a loss of reputation.
The insurance you purchase for your manufacturing plant will protect against these risks. It will ensure that you have enough money on hand to pay for damages caused by malfunctions in machines or other accidents for which you are responsible.
If a machine malfunctions, injures an employee or causes financial losses due to damage to the building or surrounding area, the insurance company would cover these costs.
In addition, they will defend your company if anyone sues because of these incidents so that while they investigate what happened, there is no worry about paying legal fees or having a judgment against you until the investigation has been completed.
Employee Lawsuit and Theft
An employee lawsuit can be serious, and you can never be too careful. The most common type of employee injury is carpal tunnel syndrome, which is caused by repetitive motions on the job and leads to many lawsuits against businesses every year.
This is why insurance companies offer medical coverage for carpal tunnel syndrome as part of their standard policies. If an employee has been injured on the job and files a workers' compensation claim, you may want to insure yourself against this type of lawsuit, as well as other forms of litigation that could arise from injuries sustained during work hours.
Employee theft is another threat to your manufacturing plant's resources and finances. Insurance companies offer several types of tools that help protect against this type of theft, including security cameras and keycard systems at entrances around your building so no one can get in without first being identified by either method.
Fire accidents are the most common and have the highest cost. Even recently, a fertilizer plant fire accident in North Carolina left people in the area panicking. Not to mention, the business itself suffered huge losses as well. Thus, protecting your plant from such losses from fire accidents is vital.
There are many different types of fire accidents, including electrical, chemical, oil, gas, etc. Fire insurance is a must for any manufacturing plant.
If your plant has been insured for fire risks only and then suffers a loss due to an uninsurable event, you may not be covered under your policy or could face significant premium increases in future years.
This could be devastating if it happens at a time when cash flow is tight or if your business has suffered from poor financial performance over several years, which is often the case with manufacturing plants due to their cyclical nature.
These are just a few of the many benefits that insurance companies provide to manufacturing plants. You must do your research and choose the best insurance provider for your needs, but whatever you do, never leave your manufacturing plant uninsured.