Manufacturing turns a business into three insurable things at once: a building full of expensive machinery, a workforce operating it, and a stream of products going out of the door that will be somebody else's problem if they are wrong. The third is what separates a manufacturer's policy from a shop's.
Product liability, which follows the goods out of the door
A manufacturer is liable for harm caused by a defective product, and that liability travels with the item long after it has been sold and paid for. Product liability cover answers for injury or third party damage arising from what you made. What it does not usually answer for is the cost of the product itself, or the cost of recalling it, both of which are separate: product guarantee covers the failure of the item and product recall funds getting it back. Manufacturers who assume the liability section pays for a recall discover the distinction at the worst possible moment.
Plant, and the breakdown that is not damage
Material damage cover answers for sudden and accidental damage to machinery from fire, flood, impact and the like. Ordinary mechanical or electrical breakdown is a different thing and is normally excluded unless an engineering or breakdown section is bought. For a factory whose output depends on one line, the breakdown section and the inspection regime that goes with it are not an optional extra. Statutory inspection of pressure systems and lifting equipment is a legal duty in its own right and is often arranged through the same engineering insurer.
Business interruption, sized to the lead time on a machine
The indemnity period on a manufacturer's business interruption cover should be set by how long it takes to replace the slowest item to replace, which is usually a machine with a long order lead time rather than the building. Rebuilding a unit and re-equipping it are different timescales, and customers lost to a competitor during a long outage do not return the week production restarts. This is the section where manufacturers most often buy a period that describes the building rather than the business.
Employers' liability and the process risk
A production floor carries the injury exposures the law is most interested in: machinery guarding, noise, dust, manual handling and exposure to substances. Employers' liability is compulsory as soon as anybody is employed, and for manufacturers it is rated closely against the process and the claims history. Disease claims with long latency are a real feature of this sector, which is the practical reason the certificate retention question matters more to a manufacturer than to an office.
Questions people ask about manufacturing business insurance
Does product liability cover a product recall?
Not usually. Product liability answers for injury or damage the product causes to others. The cost of retrieving, replacing or destroying the product itself is covered by separate product recall and product guarantee sections.
Is machinery breakdown included in a standard policy?
Rarely. Material damage covers sudden accidental damage, while internal mechanical and electrical failure is normally excluded and needs an engineering or breakdown section added.
How long should a manufacturer's indemnity period be?
Long enough to replace the item with the longest lead time and to recover the customers lost while output was stopped. For plant with a long order time that is frequently well beyond the period a business first considers.