A modular home is simply a home built offsite, in an indoor factory setting, to a local state code. These homes are often called “factory-built,” “systems-built,” or “prefab" homes. The finished products are covered and transported to their new locations, where they are assembled by a contractor and sold.
Factory-built homes are usually single-story with two or three completed sections, requiring minimal site assembly other than mating of the sections.
Modular home factories function similar to any assembly line, with the home sections moving from station to station, where specialists or tradesmen work on their particular area of expertise.
Unfortunately, problems can occur even in the safest and most controlled factory settings. The best thing you can do to protect your modular home business and your customers is to have the right business insurance in place to make sure you can recover your losses, regroup, and continue to operate even after a disaster.
A local independent insurance agent can help you get the modular home builders insurance you need to protect your business for the long term.
Why Do You Need Modular Home Builders Insurance?
Modular home “for-sale” builders specifically build new modular homes that are then assembled at the home site and sold upon completion.
Like any type of manufacturer or factory environment, modular home building can be risky. Every day, modular home builders face risks from employee injury, equipment breakdown, product defects, fire, weather, and other types of interruptions, including:
- Employee safety concerns (burns, machinery dangers, slips and falls, etc.)
- Equipment and building damage due to accidents, fire, theft, weather, and other natural disasters
- Machinery and equipment breakdown
- Business interruption due to accidents, fire, natural disasters, machinery breakdown, utility interruption, and more
- Damage to products in transit
- Product defects and recalls
Aside from these immediate risks, modular home builders can be held legally responsible for problems that happen long after a house is complete. Leaky plumbing, mold problems, structural defects, and walls or foundations are all common problems that may only become apparent months or even years after a home is completed.
What’s worse, if one house has a problem, it’s likely that others built with the same materials or with the same building methods have the same problem. Your modular home builders insurance gives you a place to turn when repairs have to be made, and in the worst case, when lawsuits are filed.
As a business owner, you need to understand all of your business risks, and how to protect your business and your employees from devastating injuries, property damage, and financial loss.
What Does Property Insurance Cover?
Modular home builders have numerous flammable materials on the premises, as well as the highly valuable fixtures, materials, tools, and equipment that may be on hand. Your buildings and equipment are susceptible to fire, theft, vandalism, and natural disasters. You need commercial property insurance to protect your building and other property in the event of a covered loss.
Commercial property insurance protects your business if a fire, vandalism, smoke, theft, or another covered peril (cause of loss) damages your property. It provides coverage for lost inventory, industrial equipment and machinery, warehouses and office space, office equipment, computers, valuable papers, and more. It may also provide coverage for neighboring facilities and completed products housed on your premises.
Commercial property insurance policies usually include business interruption coverage, or business income coverage, which protects your earnings and helps to pay expenses if your business is unable to operate because of damage caused by some type of covered disruption (fire, hail, wind, equipment breakdown). And you can expand your business income policy to include coverage for breakdowns in utility services (water, electrical) that force you to temporarily close your doors.
An agent with experience writing modular home builders insurance can help you properly assess the coverage needed for your building, heavy equipment, and other contents. You can expect your agent and underwriter to pay close attention to how you handle the flammables on your property. In order to secure the best coverage and rates, you must be sure to make safety and minimizing the threat of fire in your factory a top priority.
You may need additional coverage for your product as it is being transported from the factory to the homesite. Your shipping contracts determine which party is responsible for a product while it is transported, and if you are responsible for items in transit, you may need inland marine insurance.
Inland marine insurance is designed to protect you from losses when cargo is damaged in transit. Any piece of property that is moved from one location to another can be covered with an inland marine policy. The best way to ensure that you find the right type of inland marine coverage for your needs is to work with an independent agent who has experience working with modular home builders.
Another potentially devastating property risk for modular home builders is damage to or breakdown of equipment. Without your specialized equipment, your business would be unable to operate, pay for expenses, and earn revenue.
Equipment breakdown insurance, often referred to as boiler and machinery coverage, supplements your business property insurance. It covers certain costs associated with accidental breakdown of machinery or equipment and the resulting property damage or loss.
Equipment breakdown coverage typically covers breakdowns due to power surges, motor burnout, boiler malfunction, and even operator error. You can obtain coverage for mechanical and electrical equipment, computers and computer systems, boilers, and other types of pressure equipment.
Boiler and machinery insurance covers repair and replacement costs as well as business interruption costs related to a breakdown of covered machinery or equipment.
Why Do Modular Home Builders Need Workers’ Compensation Insurance?
The safety of employees in a manufacturing environment is of the utmost importance. Modular home factories can be dangerous places. Your workers may come into contact with heat and welding tools, cutting tools, heavy machinery, and numerous dangers to fingers, toes, eyes, and other body parts. Employees who regularly work with hand tools are particularly vulnerable to repetitive motion injuries. And constant exposure to lacquers, paints, and other chemicals can also be dangerous to workers.
Keeping your employees safe from work-related injuries and illnesses is important for their long-term health and satisfaction, as well as your company’s financial viability. Excessive employee injuries and illnesses can be financially devastating for your business.
Workers’ compensation insurance provides insurance coverage when accidents happen in the workplace. It ensures that the injured worker gets medical care and income protection while unable to work.
Workers’ compensation insurance provides benefits to injured workers regardless of who is at fault for their injury. And it will provide death benefits for a worker’s dependents if the worker is killed.
Your insurance agent can help you navigate your state’s workers’ compensation laws and requirements. Each state has different rules about the amount of benefits injured employees are entitled to, what impairments or injuries are covered, how impairments will be evaluated, and how medical care will be delivered.
What Does Liability Insurance Cover?
Modular home builders are susceptible to a variety of liability risks. You can protect your operations, products, and customers with a variety of business liability policies designed for businesses like yours.
You need general liability insurance for occasions when your business is negligent and causes bodily injury or property damage to a third party. Your commercial general liability (CGL) policy protects you in the event of third-party lawsuits, with coverage for attorney fees, court costs, settlements, and judgments up to the limits of your policy.
Like any company that manufacturers a product, you have product liability exposures. Claims for product-related damages are usually related to manufacturing or production flaws, design defects, or defective warnings or instructions. If you are sued for some type of product negligence, you may be required to pay for medical costs, compensatory damages, economic damages, attorney fees, court costs, and more.
Product liability insurance covers your financial responsibility for losses or injuries to a user, buyer, or bystander caused by a defect or malfunction of your product. Some product liability coverage is usually included in standard commercial general liability (CGL) policies, but this coverage is not likely to be sufficient for a modular home builder and all of the potential scenarios in which something can go wrong with a home you’ve built. You need an experienced agent to help you determine how much product liability exposure you have, and how much and what type of coverage you need.
If you own trucks or other vehicles, commercial auto insurance covers your vehicle fleet and drivers in the event of an accident or other vehicle damage that occurs. Commercial auto insurance provides coverage for property damage and bodily injury liability claims, vehicle damage, and medical bills, as well as any costs related to lawsuits due to auto accidents involving your vehicle fleet.
Talk to your independent insurance agent about your need for excess liability, or commercial umbrella insurance. Commercial umbrella insurance provides an extra layer of liability protection to any of several other policies you might have, including commercial general liability insurance and commercial auto insurance. By purchasing one commercial umbrella policy, you essentially get higher limits on all the underlying policies, rather than having to raise the limits on each policy individually. Commercial umbrella insurance kicks in when the limits of your other applicable insurance policies have been exhausted, protecting you in the event that a claim exceeds the amount of coverage available from any other applicable policy.
How Much Does Modular Home Builders Insurance Cost?
Insurance costs for modular home builders will vary significantly from company to company.
Insurance company underwriters will consider things like the location of your business, the number of employees you have, the value of the building, equipment, and materials on hand in your factory, and a variety of other factors unique to your business.
Your best bet is to work with an agent who specializes in modular home builders insurance. An experienced independent agent will have access to insurance companies that have developed policies specifically for your type of business and the risks you face. And an experienced agent will be able to anticipate your exposures and find the right insurance products to protect your livelihood for the long term.
Find and Compare Quotes
An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Insurance Agent
Independent insurance agents simplify the search process for finding the right modular home builders insurance. They’ll walk you through some handpicked policy options and explain the details.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
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