Protect Yourself, Before You Wreck Yourself: Business Insurance for B2B Manufacturers

Business.com / Insurance / Last Modified: February 22, 2017

Imagine your manufacturing plant falls victim to a arson attack damaging everything... and you don't have business insurance. Now what?

The manufacturing industry is crucial to the economy of virtually every country. In the USA, manufacturers contribute over a staggering $2 trillion to the economy each year, making them part of the life blood of the whole country. In fact, manufacturing is one of the largest economies in the world – not to mention one of the most important.

Despite all this though, a manufacturing company still has its vulnerabilities. And because manufacturers are so vital to economic health and success, it’s important that they’re protected against the things that threaten them. Arguably, this is even truer for B2B manufacturers, as the livelihood and success of any number of other businesses can depend on that of the manufacturer.

One of the ways in which owners of manufacturing businesses can play their part in ensuring the protection and safety of these vital businesses is by ensuring their companies are properly protected with comprehensive manufacturing insurance.

Related Article: Does Your Business Need an Insurance Check Up? (Hint: Yes!)

Which insurance policies are right for manufacturers?

Whether you’re a manufacturer of hotdogs or the ovens that cook them, there will definitely be a number of policies that you will want to consider putting in place. It’s likely that a B2B manufacturer will need more than basic levels of coverage in place to reflect the high levels of risk encountered daily.

The general liability and worker’s compensation coverage that are standard for virtually every business probably aren’t going to be enough by itself. A manufacturer also needs more specialized, comprehensive coverage to reflect the nature of the work that is carried out. So, you may want to consider some of these additional policies to properly protect your business:

Commercial property and contents insurance

Imagine that your manufacturing plant falls victim to a malicious arson attack, causing serious damage to your building and its contents. Imagine that expensive manufacturing equipment is destroyed, as well as a large amount of your stock and the business premises building is damaged, requiring serious repair work.

Complete nightmare, right? And to make things worse you’re left with the burden of finding the money to rectify the damage, even though it was not your fault!

A successful claim on your commercial property insurance could mean that you don’t have to worry about paying for repairs to your business building (on your own). The same goes for a contents insurance policy where your business’ items are concerned. You could even be supported with financial compensation that can help to get your business back up and running in no time at all.

For companies operating in nearly any sector, insuring your business building and contents against damage, loss and theft is important – but this may be especially true for manufacturers. Your business relies on the ability to create, construct and assemble products to sell to clients. And without your premises and crucial items like specialist machinery and equipment - it’s impossible to do so.

Product liability insurance

For manufacturers, this is one of most important insurance policies that you could have.  As the manufacturer of a product, even if you’re assembling parts that have been made elsewhere, you have a lot of responsibility where the safety of that product is concerned. If a product that you manufactured went on to cause injury, illness or property damage, there’s a good chance that you could be held liable.

Consider any one of these situations:

  1. You manufacture electrical equipment, and a faulty batch goes on to cause a series of house fires.
  2. You’re a food manufacturer, and your food products cause severe food poisoning at a public event.
  3. A piece of furniture that you partly-manufactured collapses unexpectedly and causes a member of the public to injure themselves.

In any of the above situations, there’s a chance that you could be held responsible for the damage or injury caused by any one of those products. Even if the product malfunction was not directly caused by a fault in your business, if the product has been through your plant, you’re still a liable party. A product liability insurance policy can provide valuable protection for you to help you to defend against legal accusations or pay compensation if necessary.

Related Article: How to Create a Comprehensive Emergency Plan for Your Business

Marine and cargo insurance

Many B2B manufacturers export their products to businesses around the world. In fact, in 2013, the United States exports contributed a whopping $2.3 trillion in exports to the world economy. With figures like that, there’s a fairly good chance that your manufacturing company exports overseas. If so, then you may want to consider protecting those items while they’re in transit.

As with many insurance-related topics, marine and cargo insurance is far from straight forward. It’s a little tricky to delve too far into detail about these policies, as they usually have to be tailored to the requirements of the manufacturer that needs them. As an example, a manufacturing business that exports a range of exotic fruits to customers in South America would probably need a different set of conditions in their marine and cargo insurance than a manufacturer shipping vintage clothing to Europe. Your best bet is to speak to your insurance provider about your needs, and get the cover that’s right for you.

Business interruption insurance

This policy, also referred to as business income insurance, can provide valuable financial help if your business should be forced out of action unexpectedly. As an example, imagine the same arson scenario mentioned earlier:

In this situation, liability insurance would be there to deal with injury caused and your contents policy could support you with replacement and repair of any damaged items within your business. Additionally, commercial building insurance could help to repair damage to the structure of your business building.

All is fine and dandy, right?

Well, not exactly. Have you considered the amount of time that it’ll take for all these repairs to take place? During this time your business will probably be closed and consequently, not be making any money. And the reality is that you will probably still have a number of overheads to pay in this time. Without money coming in, it’s going to be difficult to keep on top of these expenses; which is where business interruption insurance comes in!

This policy can provide you with the finances you need to pay your ongoing expenses, even when your income stream has slowed to a trickle. You never know when an unexpected event may put you temporarily out of business and that may not be a risk that you can afford to take.

All in all, you already know the importance of protecting your business with insurance – especially if you’re a B2B manufacturing businesses. Make sure that you’re protecting not only your own business’ livelihood - but also that of the clients that depend on you. Manufacturers are part of the life blood of any economy, and should a peril or unexpected event affect one, the chain reaction could have serious implications.

Login to Business.com

Login with Your Account
Forgot Password?
New to Business.com? Join for Free

Join Business.com

Sign Up with Your Social Account
Create an Account
Sign In

Use of this website constitutes acceptance of the Terms of Use, Community Guidelines, and Privacy Policy.

Reset Your Password

Enter your email address and we'll send you an email with a link to reset your password.

Cancel