Firearms manufacturing is big business in the United States. Whether you are a large manufacturer or a smaller enterprise, the risks inherent in your day-to-day operations are plentiful. Gun manufacturers have many typical business exposures as well as unique exposures due to the type of product that they produce.
Finding the right insurance coverage for firearms manufacturers can be difficult in some cases. In order to find policies and coverage tailored to your business, you must work with an experienced independent agent who understands your business and has relationships with insurance companies that specialize in firearms manufacturer insurance programs.
The Facts About Firearms Manufacturing in the U.S.
According to the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), 10,847,792 firearms were manufactured in the U.S. from 1986 to 2013. That includes the following:
- 4,441,726 pistols
- 725,282 revolvers
- 3,979,570 rifles
- 1,203,072 shotguns
- 495,142 miscellaneous firearms
Every year, gun manufacturers produce hundreds of different types and models of firearms for use by individuals, law enforcement and the military.
Gun Manufacturers Need Special Liability Insurance
Like any manufacturing business, firearms manufacturers need a variety of business insurance policies tailored to their needs. Gun manufacturers should pay particular attention to the type of liability exposures that they have and the insurance policies they may need to address them.
While gun manufacturers probably don’t have customers or the general public frequently on-site, you still need general liability insurance for occasions in which the business is negligent, leading to bodily injury or property damage to a third party.
A commercial general liability (CGL) policy protects you in the event of third-party lawsuits related to negligent bodily injury or property damage on your business premises.
Gun manufacturers take pride in the product they produce and the loyalty of their customers. If you are committed to making a good product with superior design, quality materials, and expert design and assembly, you can be confident in the safety of your product. But no matter how good your product is, things can always go wrong:
- A gun can malfunction and cause injury to a user or a bystander.
- You can fail to appropriately communicate instructions and safety concerns.
Claims for product-related damages are usually related to manufacturing or production flaws, design defects, or defective warnings or instructions. If you are negligent – and even if you are not – you can be sued and required to pay for medical costs, compensatory 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 may be included in your standard commercial general liability (CGL) policy, but in many circumstances, the coverage may not be sufficient.
An agent who has experience working with hard-to-place exposures can help you determine how much and what type of product liability coverage you need.
Basic Business Insurance for Gun Manufacturers
Firearms manufacturers may need a variety of additional business insurance policies to round out their comprehensive gun manufacturers insurance program. When talking with your independent insurance agent, be sure to discuss the following types of policies and coverage:
- 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, warehouse and office space, office equipment, computers, and more. It may also provide coverage for neighboring facilities and completed products housed on your premises.
- Business interruption coverage, or business income coverage, protects your earnings if your business is unable to operate because of damage caused by some type of covered disruption (fire, hail, wind, equipment breakdown). It covers rent, employee salaries, lost income, relocation fees and more. You can also expand your business income policy to include coverage for breakdowns in utility services (water, electrical) that force you to temporarily close your doors.
- Equipment breakdown insurance, often referred to as boiler and machinery coverage, supplements your business property policy and covers certain costs associated with accidental breakdown of machinery or equipment and the resulting property damage and loss of income.
- Workers’ compensation insurance protects your employees from the costs associated with workplace illnesses and injuries, including lost wages and medical expenses. Manufacturing facilities are fraught with danger for employees, and this insurance is not only critical but is also likely required by your state.
- Employment practices liability coverage protects you from employee lawsuits related to discrimination and other employment practices.
- Cyber liability insurance provides coverage in the event of a data breach involving your business.
How to Find the Best Insurance for Gun Manufacturers
Gun manufacturers are unique businesses that produce highly technical and specialized products. In order to protect your business, you need a comprehensive business insurance program that is tailored to your unique risk exposures. You need to seek quotes from numerous reputable and experienced insurance companies that know how to insure a firearms manufacturing business.
An independent agent is not bound to any one insurer; rather, he or she can work with many companies and find the right mix of coverage for your business. Your agent will get to know your business as well as you do and will be your long-term partner in success.
Contact an independent insurance agent today to begin exploring your options for gun manufacturer insurance.