Why Manufacturers Need Product Liability and Property Insurance
- Nate Jones, CPCU, ARM, CLCS, AU
- 3 hours ago
- 2 min read
Manufacturers face complex risks that extend far beyond daily operations. From defective product claims to facility damage, a single incident can result in severe financial loss. That’s why product liability insurance and commercial property insurance are two of the most critical coverages every manufacturing business needs to stay protected and operational.
The Importance of Product Liability Insurance for Manufacturers
Product liability insurance protects manufacturers against claims arising from products that cause bodily injury or property damage. Even with strict quality control processes, defects can occur during design, manufacturing, packaging, or labeling.
Manufacturers can be held legally responsible for:
Design defects
Manufacturing errors
Inadequate warnings or instructions
Product malfunctions after distribution
Lawsuits related to defective products can result in high legal defense costs, settlements, or judgments. Product liability insurance helps cover attorney fees, court costs, medical expenses, and damages, reducing the financial burden on your business. Many distributors and retailers also require proof of product liability coverage before doing business.
Why Property Insurance Is Essential for Manufacturing Operations
Manufacturing facilities often contain expensive machinery, tools, raw materials, and finished inventory. Commercial property insurance protects these assets against losses caused by fire, theft, vandalism, storms, and certain natural disasters.
Without property insurance, manufacturers may struggle to recover after a loss that damages production equipment or inventory. This coverage helps repair or replace:
Buildings and warehouses
Production machinery
Inventory and raw materials
Office equipment and furnishings
Property insurance is frequently required by lenders and landlords and plays a key role in maintaining operational continuity after a covered loss.
Reducing Risk Through Compliance and Safety
Maintaining safe manufacturing environments can help reduce claims and insurance costs. Following workplace safety guidelines from the Occupational Safety and Health Administration (OSHA) can lower injury risks, improve compliance, and support favorable insurance pricing.
Why Manufacturers Need Both Coverages Together
Product liability and property insurance work together to provide comprehensive protection. While property insurance safeguards physical assets, product liability coverage protects against lawsuits related to the products you manufacture and sell. Without both, manufacturers face significant gaps in coverage that can threaten long-term stability.
Get the Right Coverage with Wexford Insurance
Choosing the right insurance provider is just as important as choosing the right coverage. Wexford Insurance specializes in manufacturing business insurance and understands the unique risks manufacturers face. Their team helps tailor product liability and property insurance to your specific operations and compliance needs.
Request a free manufacturing insurance quote from Wexford Insurance today to secure coverage that protects your products, property, and bottom line.
FAQs
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