Manufacturing Insurance: Extra Liability for High-Risk Production

Manufacturers involved in the production or processing of hazardous materials face many challenges when it comes to federal and state regulations. You must meet numerous safety requirements and maintain comprehensive insurance coverage. Your business can face serious financial losses if you are not aware of the many situations that you can be held liable for.

Safety guidelines

Your business must meet all of the requirements set by the Occupational Safety and Health Administration for hazardous material production. The nature of your work may also require you to meet regulations set by The Bureau of Alcohol, Tobacco, Firearms and explosives (ATF). The Environmental Protection Agency (EPA) has rules in place covering disposal and spills.

Employees involved in the production of ammunitions, explosives or volatile chemicals must be well trained in safety and emergency procedures. If your company does not follow safety guidelines, your insurance will not cover you in the event of an incident. Manufacturers in Texas can find additional information on requirements provided by the state.

Insurance requirements

General liability insurance provides protection for your manufacturing site. While most businesses may find that general liability provides sufficient protection, manufacturers are also liable for the products they produce. Product liability insurance is needed to cover the public if injury or damage occurs from the product’s use.

Unfortunately for those involved with hazardous materials, the amount of liability can be far ranging. For example, an individual using pyrotechnics could cause extensive damage and multiple injuries. A chemical spill can contaminate an entire neighborhood. While an individual could be to blame, cross-claims are often filed.

Manufacturing environments can be dangerous enough without hazardous production. You need to ensure you have the liability protection in place for your employees, your equipment and your facility.

Extra issues to consider

The transportation of hazardous raw materials to your site and finished products to the consumers must be performed under the guidelines of the U.S. Department of Transportation. Special insurance requirements are also in place. You must ensure that the transportation company you use meets these regulations to protect yourself from liability claims.

Business interruption coverage may be something you should also consider. Your building and equipment should be insured through your general policy. Make sure that you also have insurance to protect you against the lost production time you can face in the event of a catastrophic occurrence.

It may be hard to foresee all of the areas where your company could face liability for the products you produce. Working with someone that knows your industry will ensure that you have all the coverage you need to stay in business profitably.

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