Common Risks Faced by Manufacturers and How Insurance Can Help

The manufacturing sector, a vital pillar of the economy, often grapples with a labyrinth of challenges and risks. Manufacturers often face significant and constant dangers, from intricate supply chains to unpredictable machinery mishaps. Given these concerns and the potential consequences, appropriate loss control measures, such as a well-rounded insurance portfolio, should be a top priority.

How Insurance Can Mitigate Manufacturing Risks 

While the manufacturing industry may consistently rank as one of the most dangerous among U.S. employers, adequate insurance can help offset many risks. Consider the following guidance:

1. Supply chain disruptions—These disruptions, whether due to supplier bankruptcy or natural disasters affecting transport routes, can halt production and impact the bottom line. Imagine sourcing a critical product component from an overseas supplier. If conditions beyond your control leave you unable to fulfill orders, the right business interruption insurance, also known as business income insurance, may help cover potential income loss and costs associated with finding alternatives.

1. Employee health ailments—Employees’ on-the-job injuries and illnesses can pose significant risks. A suitable workers’ compensation insurance policy can be critical, potentially providing financial support for medical expenses and lost wages. Additionally, retaining such coverage may be necessary for legal compliance.

1. Product liabilities—Regardless of a manufacturer’s diligence and commitment to safety, the risk of producing or distributing defective products must be accounted for. Product liability insurance can shield policyholders against legal claims arising from injuries or property damage due to inadequate, contaminated or defective goods.

1. Property damage—Manufacturers inherently rely on many physical assets, including their building, equipment, machinery, tools and inventory. Fires, floods, thefts and other incidents can inflict significant financial consequences. Commercial property insurance may be necessary to assist with repair, replacement or rebuild costs.

Learn More

At Pitcher Insurance Agency, we’re ready to help manufacturing businesses understand and address their coverage needs. Contact us today to get a personalized quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.