What kind of insurance coverage do metal manufacturers need?

General insurance is available to protect some of your business interests with coverages unique to metal manufacturing that you may want to consider.

Your metal manufacturing business is exposed to a variety of risks at every step of the manufacturing process. The specialized equipment needed for this type of operation can also add to these risks and despite everyone’s best intentions, slip-ups can happen.
 

Core coverages to protect your metal manufacturing business

Property insurance is something all businesses should have. It protects your assets, including your building, equipment, and tools in the event of a covered loss such as fire, natural disaster, theft, and vandalism.

Even though metal manufacturers may not regularly have the public walking through their facilities, working with large equipment can be dangerous and cause injury to employees or others on the premise. Liability insurance can protect you against third-party lawsuits. It can also protect you from losses incurred through defective products, product recalls and damage to your work in progress


Equipment breakdown

Equipment breakdown insurance (EBI) complements your property insurance. It covers costs associated with the accidental breakdown of mechanical or electrical assets, including production machinery. EBI helps restore your business by repairing or replacing damaged equipment to where it was before the equipment broke down, but finding the exact replacement part or machine may be difficult if what you had is no longer available. The good news is EBI typically includes coverage for newer equipment that’s more environmentally friendly and more efficient if your equipment has to be replaced rather than repaired.

You should also keep in mind that supplementary coverages are available under equipment breakdown insurance that apply to data processing equipment, debris removal, expediting expenses and stock spoilage. Your broker can help you customize the best insurance for your specific equipment and business needs.
 

Business income

As a coverage that allows you to meet your ongoing financial obligations if your business shuts down due to a covered property or equipment breakdown loss, business income coverage is crucial for metal manufacturers. Business income insurance helps you pay for things like mortgage, payroll and other day-to day business expenses. You also have coverage for manufacturing downtime from outages that are the result of insured damage to utility property such as a transformer that supplies electricity to your premises.
 

Other coverages specific to metal manufacturing

Your broker can help you customize your policy to meet your needs, such as:

  • Mould, Dies and Patterns for loss or damage while in the custody of others
  • Product recall expenses
  • Manufacturers’ errors and omissions for product defect
  • Product rectification expenses for failing to manufacture to customers’ written specifications
  • Pollution
  • Transportation for manufactured goods or components in transit
  • Crime, including electronic fraud, funds transfer fraud or employee dishonesty

Pollution is a big risk for manufacturers in this industry, but both first-party and third-party coverage is available to help you in managing this risk. This provides coverage if an environmental event at your location seeps onto the neighbouring premises or if your operation or product causes an environmental damage for a third party. Pollution coverage can include cleanup expenses as well as liability coverage.
 

Insurance coverage

Talk with your broker about what kind of coverage is available and how they can tailor a policy that is right for your business. Provide your broker with details about your operations. Help your broker understand what you do, what you manufacture and your business’s assets, fleet, exposures, and products.

Most importantly, you should share with your broker where the components that make up your business equipment come from and how reliant your business is on select suppliers or a limited customer base.

Your insurance representative is a valuable source of information for identifying and mitigating risk within your business. The information you provide is important and will help your broker tailor the best coverage for your business needs. 



For more information, contact your insurance broker. If you don’t have one, use our Find a Broker tool.
 

Sources:

1. Aviva Enterprise Manufacturing and Wholesaling Insurance. (2018). Retrieved from Aviva Canada:
https://www.aviva.ca/en/business/find-insurance/by-industry/manufacturing-and-wholesaling-insurance/#nav

2. Privacy Breach Coverage. (2018). Retrieved from Aviva Canada: https://www.aviva.ca/en/business/find-insurance/solutions-services/privacy-breach

The content in this article is for information purposes only and is not intended to be relied upon as professional or expert advice.
 

Copyright in the whole and every part of this site belongs to Aviva Canada Inc., unless otherwise indicated, and may not be used, sold, licensed, copied or reproduced in whole or in part in any manner or form or in or on any media to any person without the prior written consent of Aviva Canada Inc.