Safety of workers and products is a primary concern for most manufacturing and wholesale distribution companies. Companies in this industry typically have many employees in warehouses and factories that are exposed to numerous physical, chemical or electrical hazards so keeping a safe work environment is high priority. Proper employee training, risk reduction strategies and emergency preparedness are not the only necessary steps that manufacturers and distributors must take.

No matter how safe the work environment, accidents do happen. Having the proper type and amount of business insurance for protecting operations, employees and customers is just as important to reduce risk and properly provide for injured workers or visitors. While each company’s factory, warehouses and distribution centers will have their own unique insurance needs, most companies within this industry rely on the following coverages to insure their businesses.

General Liability and Property Insurance
Most manufacturers and wholesale companies will have standard liability and property insurance coverage in place to protect from financially damaging lawsuits and potential property damage caused by fire, theft or explosion. These two types of policies are the cornerstones of every comprehensive insurance protection plan, but manufacturers and distributors will need specialized insurance to provide added protection not commonly covered within general property and liability policies.

Product Liability
While general liability provides a measure of protection adequate for most small businesses manufacturing and distributing companies must pay special heed to the inherent risk in making and supplying products or goods to the general public. If a food manufacturer creates a product that makes large groups of people ill, that company faces the potential for lawsuit that could wind up costing large sums of money. Product liability insurance protects companies should their product malfunction or cause illness. Recalls can be extremely expensive endeavors, and product liability insurance protects companies from this expense when necessary. Manufacturer’s product liability insurance will also pay for legal defense costs and any award of damages if a company is found financially responsible for injury.

Workers Compensation Insurance
Even when companies have spent thousands of dollars on safety equipment and training, workers will find ways to injure themselves. When this happens, workers compensation insurance pays medical treatment and wage replacement for employee work related injuries and illnesses. Most states mandate this coverage so all manufacturing & distributing companies will need to purchase this insurance from private workers comp carriers or apply for self-insurance.

Commercial Automobile Insurance
All commercial autos in the United States must have commercial automobile insurance. Commercial auto liability insurance provides coverage for medical expenses of injured parties as well as payment for damages to the property of others when an insured causes an accident.

Personal and commercial automobile insurance is for the most part the same except for a few significant differences:
  • Higher liability limits - commercial auto policies typically have more than $1 million in insurance coverage.
  • Rented & non-owned autos - commercial insurance will cover rentals and even employee autos used for company business. 

Ownership and use of vehicle determines whether a personal or commercial auto insurance policy should be used for businesses. If a vehicle is owned by the business, driven by the business owner or employees and is used for business transport or deliveries, then a commercial automobile insurance policy should be purchased. Business owners need to make sure that their business name is listed as the named insured on the auto policy. Employees using company vehicles should be properly trained and have good motor vehicle driving records.

Commercial automobile insurance premiums can be affected by many factors including:
  • Make, model & year of car or truck
  • Safety equipment installed on the vehicle - anti lock brakes, air bags, daytime lights
  • Anti-theft devices - alarm systems, lo-jack & GPS
  • Vehicle parking - indoor garage or locked lots are the best
  • Location - geographic areas prone to severe weather can have higher rates.
  • Previous claims history - previous losses can increase costs.
  • Coverage limits on policy - higher coverage equals higher premiums.
  • Policy deductibles - the higher the deductible, the lower the premium. 

Commercial auto insurance pays for bodily injury and property damage liability claims, uninsured and underinsured motorist coverage as well as medical payments. Each state  has different laws concerning the type of coverage and amounts of liability needed to operate commercial vehicles. But no matter where a business is located, the importance of protecting company assets by purchasing commercial automobile insurance for business use of vehicles is imperative to provide the best insurance protection available. 

Even after choosing the best business coverage available, companies still need to determine the right amount of insurance needed to keep operations fully protected. That is where an experienced insurance broker or agent can help. Our commercial insurance experts can help business owners properly assess the level of risk and amount of assets needing protection and then create an insurance plan to maximize benefits while meeting financial goals.