Manufacturing insurance
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Why is manufacturer insurance important?
From business interruption and loss of licence to goods in transit, a manufacturing premises faces considerable everyday risk. This, plus third party injuries like a fall or contact with moving equipment, can expose your business to high cost claims. Industrial insurance, designed for manufacturers, can provide a backstop for critical but common incidents.
- production insurance, UK-based claims and customer service team
- goods in transit, cyber risks, and equipment breakdown – up to your policy limit
- food manufacturing insurance options, from product liability to frozen/fridge stock
What does manufacturers insurance cover?
Property damage insurance is a key protection for manufacturing businesses, built to provide cover against incidents which cause building, contents, fixtures, and fittings damage. Most quotes also feature employers’ liability insurance, as well as public liability insurance for third party injuries and property damage. From there, you can add specific manufacturing insurance options, including refrigerated or frozen stock deterioration and equipment breakdown.
Business interruption insurance
In case a crisis stops your manufacturing premises from operating.
Deterioration of refrigerated stock
In case a failure or fault causes refrigerated or frozen stock to deteriorate.
Employee theft insurance
In case an employee steals from your business.
Equipment breakdown insurance
In case there’s a problem with your equipment.
Employers’ liability insurance
In case anyone gets ill or injured while working for your business.
Public liability insurance
In case your business causes an injury, illness, or property damage.
Product liability insurance
In case your products cause an injury or damage.
Commercial legal expenses insurance
In case you’re faced with legal costs in connection with your manufacturing.
Personal accident insurance
In case you or anyone you’ve covered has an accident, at work or off-duty.
Business interruption insurance
In case a crisis stops your manufacturing premises from operating.
What’s typically covered by business interruption insurance?
- lost profit, revenue, or rent following damage to your premises
- increases in the cost of working
For example:
- a fire breaks out overnight in your premises, causing extensive damage which prevents you operating the next day
- flooding over the Christmas break forces you to close your manufacturing premises for three weeks
What isn’t covered?
- collapse or cracking of buildings
- vehicles required to be licensed for road use, including accessories
- disruption caused by changes in the water table, subsidence, ground heave, or landslip (unless specifically agreed in your policy document)
Other exclusions apply – read the policy documents carefully to be clear on what is and isn’t covered.
Deterioration of refrigerated stock
In case a failure or fault causes refrigerated or frozen stock to deteriorate.
What’s typically covered by deterioration of refrigerated stock insurance?
- damage to frozen or refrigerated stock
- mechanical breakdown or accidental failure of electricity to freezers and refrigerators
- seasonal stock increase, during specific periods
For example:
- two of your fridges develop a fault and break down, causing several units of fresh produce to go bad
- following a bad storm, an electricity failure to your freezer unit loses a customer’s entire stock of frozen produce
What isn’t covered?
- equipment and units which haven't been serviced or maintained in accordance with your policy document
- damage caused by any wilful act or neglect by you or any employee
- damage caused by faulty packaging or stowage
- any form of normal trade loss, or damage caused by inherent defect
Employee theft insurance
In case an employee steals from your business.
What’s typically covered by employee theft insurance?
- money or property theft arising from employee fraud or dishonesty
- auditor fees incurred while substantiating the amount of loss
- costs for rewriting or amending computer software programs or security codes, to prevent recurrent theft
For example:
- two employees steal a large shipment of manufacturing parts from your premises
- you need to pay an auditor to confirm the amount of money stolen by one of your duty managers over a six month period
What isn’t covered?
- unexplained shortages
- loss of interest or consequential loss
- loss caused by employees before your cover started
Other exclusions apply – read the policy documents carefully to be clear on what is and isn’t covered.
Equipment breakdown insurance
In case there’s a problem with your equipment.
What’s typically covered by equipment breakdown insurance?
- accidents and breakdowns involving equipment covered under the property damage section of your policy
- insured items typically covered up to £5 million
What isn’t covered?
- loss or damage caused by a pneumatic or gas pressure test of any boiler or pressure vessel, or an insulation breakdown test on electrical equipment
- damage which you can recover under your maintenance agreement, warranty or guarantee
- biomass, biogas and hydroelectric installations
Other exclusions apply – read the policy documents carefully to be clear on what is and isn’t covered.
Some insurers won’t cover certain items, unless they’re specifically agreed in your policy (for example, your manufacturing equipment). You’ll usually need to select property damage insurance and/or specified all risks insurance when building your policy, to get the right cover for your equipment and property.
Employers’ liability insurance
In case anyone gets ill or injured while working for your business.
What’s typically covered by employers’ liability insurance?
Claims against your business for:
- an injury or illness that happens as a result of working for you (including temps and casual workers)
For example:
- an employee develops tendonitis and raises a claim against you
- a temporary Christmas worker slips on a wet floor in your manufacturing premises, injuring their lower back
Employers’ liability insurance is required by law if you have people working for you. Without it, you could be fined up to £2,500 a day for each employee.
Public liability insurance
In case your business causes an injury, illness, or property damage.
What’s typically covered by public liability insurance?
Claims against your business for:
- damage to someone’s property, caused by your manufacturing activities
- an injury or illness caused by your business activities or products
- accidental damage or injuries caused by your employees
For example:
- one of your site visitors is injured by a piece of moving machinery while trying to find the exit
- a chemical spill in your manufacturing premises causes toxic exposure and serious burns to a visiting client
If you do employ anyone, you’re usually required by law to have employers’ liability insurance too.
Product liability insurance
In case your products cause an injury or damage.
What’s typically covered by product liability insurance?
- your legal liability for injuries or damage caused by your products, up to the agreed limit
- associated costs and expenses
Exclusions and limitations apply to this cover – read the policy documents carefully to be clear on what is and isn’t covered.
Commercial legal expenses insurance
In case you’re faced with legal costs in connection with your manufacturing.
What’s typically covered by legal expenses insurance?
- legal costs that you’re responsible for, within your business
- property damage, nuisance, or trespass – specifically, the associated legal claims and compensation payouts
- tax and compliance disputes and investigations you need help with
- access to expert advice – including a tax advice phone line, confidential 24/7 legal phone line, and crisis support to help you protect your professional reputation
For example:
- HMRC begin an investigation into your tax affairs, and you need to pay for legal representation
- an employee sues you after a falling object causes her concussion, and you begin to incur legal costs
Personal accident insurance
In case you or anyone you’ve covered has an accident, at work or off-duty.
What’s typically covered by personal accident insurance?
- accidental injury or death of anyone you’ve chosen to cover in your policy – whether this happens at work or elsewhere
- lost income, hospital bills, or other medical costs associated with the accident
For example:
- two of your employees are badly burned during an explosion on your manufacturing premises, and can’t work for at least six weeks
- you break your leg in a road cycling accident, and need six weeks away from work
This content has been created for general information purposes. Make sure you have the right level of business insurance by checking your policy documentation for details. Read our full Terms and Conditions
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Manufacturing insurance FAQ
Whether you’re new to buying business insurance or you’ve been trading for a while, here are the answers to some commonly asked questions about insurance for manufacturing business risks. You can also check out our business insurance FAQs.
This depends on the business you’re running, and your associated activities and contracts. An insurer will take your overall risk profile into account when building your quote, so the average production insurance cost will vary between business and premises types.
The products you manufacture can carry risk, from food and drink-related illnesses to loose parts on children's toys. Product liability insurance can protect manufacturers from claims for injuries caused by your products, or third party damage you’re held responsible for.
For example, a faulty zip on a child’s jacket which could create a choking hazard, or peanut contamination in a food product. Both of these hazards may lead to a product liability claim, which can be very expensive for all parties involved.
If you provide other services, make sure you’re covered:
Other types of insurance
Each insurer looks at CCJs and IVAs differently – some apply stricter rules than others, but having a CCJ or IVA doesn’t necessarily mean you won’t be able to buy insurance.
You can choose the payment type that suits your business and cash flow best. Some customers prefer to pay in one go, while others prefer to pay a regular monthly amount, like you do with lots of other bills. Simply Business offer three ways to pay for your policy:
- one-off credit or debit card payment
- BACS payment
- Direct Debit
If you choose to pay by Direct Debit, our credit provider, Premium Credit, pays Simply Business the full amount for your policy up front. You then repay Premium Credit in 10 monthly instalments.
This will depend on whether you have employers’ liability insurance in place. Public liability insurance is designed to protect your business against the consequences of legal action brought by members of the public for injuries or damage to their belongings. But when it comes to your employees causing injury or damage, this protection only activates if you also have employers’ liability insurance.
If you employ people, you’re required by law to have employers’ liability insurance.
There’s one exception here. Family businesses that aren’t incorporated as a limited company are not legally required to have employers’ liability insurance. The government defines a “family business” as one where all your employees are closely related to you (as a spouse, civil partner, sibling, child, parent, grandparent, grandchild, step-parent, stepchild or half-sibling). So if you run an unincorporated family business and you choose not to get employers’ liability insurance, it’s important to know that your public liability insurance wouldn’t cover you against damage or injury caused by your team.
We create this content for general information purposes and it should not be taken as advice. Always check policy documentation for details and seek professional advice. Read our full Terms and Conditions
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