As a manufacturer of goods, one of your main concerns when it comes to commercial insurance in New York should be products liability coverage. If your product injures a person or causes property damage due to the negligence of your firm, your company can be found legally liable and forced to pay damages. This type of policy is intended to protect a business from product liability claims.
Building a manufacturers insurance program
Following this process will lead to an insurance program that is both affordable and covers your most likely losses. You need to design your coverage beginning with an analysis of your loss exposures, based on an understanding of your operations and your historic loss experience.
Start with the mandatory coverages, which typically include general liability and usually property insurance. The Comprehensive General Liability (CGL) insurance policy may contain multiple coverage parts. Coverage for product liability is provided with the CGL when it includes a separate Products Liability and Completed Operations Coverage Part. Be sure this is included in your policy.
Generally policies are written with a $1,000,000 per occurrence/ $2,000,000 annual aggregate limit, although higher limits are becoming increasingly common. This coverage is often extended to protect venders of your products through the addition of a vendor’s endorsement.
Other insurance requirements
In addition to a Commercial General Liability policy, Property insurance coverage should have limits high enough to allow you to rebuild your facility. Pay particular attention to the perils that are covered, preferably “Special Perils,” which means all risk except as excluded (typically flood and earth quake). It should include a provision for business income and extra expense incurred while your facility is being rebuilt.
If vehicles are used you will also need auto insurance to protect your firm from any kind of auto related liability. Umbrella or excess liability protection adds additional limits for large, third party claims.
Higher deductibles may save significant premium dollars, particularly if you make or sell hazardous products, or if you have high property values. Don’t forget about Executive Risk exposures, such as Directors and Officers Liability (D&O), Employment Practices Liability (EPLI) and Fiduciary insurance. These coverages extend to the personal assets of your directors and officers.