The Essential Guide to Factory Insurance Coverage

Results. As a manufacturer that’s what you’re expected to produce. The goods you make are a means to an end. The end result? A major contribution to the Canadian economy by providing jobs, increasing our country’s GDP and supplying products that enhance our lives. For your factory to be profitable, you need to stay a step ahead of risks through planning, execution and preparation. Which means having a safety net for the inevitable. This is where factory insurance coverage plays a part in your manufacturing firm’s long-term success. With the right factory insurance coverage, your organization is protected and can get quickly back to business when things go wrong.

Manufacturers who can Benefit from Factory Insurance Coverage

The following are examples of the types of factories that can benefit from factory insurance coverage:

  • Food Manufacturing
  • Beverage and Tobacco Product Manufacturing
  • Textile Mills
  • Textile Product Mills
  • Apparel Manufacturing
  • Leather and Allied Product Manufacturing
  • Wood Product Manufacturing
  • Paper Manufacturing
  • Printing and Related Support Activities
  • Petroleum and Coal Products Manufacturing
  • Chemical Manufacturing
  • Plastics and Rubber Products Manufacturing
  • Nonmetallic Mineral Product Manufacturing
  • Primary Metal Manufacturing
  • Fabricated Metal Product Manufacturing
  • Machinery Manufacturing
  • Computer and Electronic Product Manufacturing
  • Electrical Equipment, Appliance, and Component Manufacturing
  • Transportation Equipment Manufacturing
  • Furniture and Related Product Manufacturing
  • Miscellaneous Manufacturing

The list is based on the North American Industry Classification System manufacturing subsectors. Of course, this is only a partial list of the types of factories that need the protection of factory insurance coverage as part of their risk-management strategies.

Risk Factors for Factories in the Manufacturing Sector

Here are just some of the risks that Canadian factories have to address to help protect their survival:

  • Safety/operational risks
  • Public safety risks
  • Reputational risks
  • Supply chain risks
  • Legal/compliance risks
  • Third-party risks
  • Financial risks
  • Cyber security risks
  • Equipment breakdown risks
  • Theft/crime risks
  • Natural disaster risks

Having comprehensive cover safety measures including training, supervision, documentation and guidelines, reporting processes and regular reviews at all levels and across all areas of your operations in combination with comprehensive factory insurance policies will go a long way in minimizing risks your factory faces.

What is Factory Insurance Coverage?

There are several commercial insurance products that are designed to minimize the risks businesses face. For manufacturers, the following are the basic coverages we recommend be included in your factory insurance coverage:

Commercial General Liability Insurance is a standard insurance policy for all businesses and what protects your manufacturing business firm from legal claims of property damage, personal injury, libel/slander and false advertising. This kind of commercial general liability insurance coverage also includes Product Liability Insurance.

Pollution Liability Insurance is an important protection for factories and should be a part of your factory insurance coverage. It can protect your organization from the costs of litigation, fines and cleanup expense.

Product Recall Insurance is a crucial part of factory insurance coverage and covers the massive costs of a recall including testing, wasted product, replacement costs, notification costs and brand rehabilitation expense.

Property Insurance that protects your factory, equipment, machinery, supplies, assets, etc., in case of perils such as fires, floods, windstorms, sewage backups and more. Your factory insurance coverage will also likely include

Business Interruption insurance to help you manage your operating costs after a disaster and Extra Expense insurance to help you a set up a temporary factory so you can restart your manufacturing operations as quickly as possible. 

Boiler & Machinery Insurance / Equipment Breakdown Insurance which is insurance against the cost to repair or replace equipment and coverage for the losses you experience because of equipment failure.

Directors & Officers (D&O) / Board Insurance for protection of your manufacturing firm’s directors and officers who face an added layer of liability for their decisions and fiduciary duties.

Cyber Liability & Privacy Insurance because cybersecurity software is only the first step in managing cyber security threats. As part of your factory insurance coverage, cyber liability insurance covers costs associated with a breach.

Crime Insurance / Fidelity Insurance which is another essential part of factory insurance coverage as it protects your factory from theft by employees and other forms of fraud and dishonesty. 

ALIGNED – We are Manufacturing and Factory Insurance Experts

Our ALIGNED insurance broker lives and breathe risk-management for businesses and only deal in commercial insurance products. We work with the top insurance companies in Canada, but we work for you – our clients. We leverage our relationships, experience and purchasing power to advocate for the best rates on your behalf. Contact an advocate and get a free quote on factory insurance coverage in minutes.

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