Footwear manufacturers need a variety of protections in place to protect their businesses from fires, employee injuries, lost inventory, damaged goods and product recalls – and lawsuits related to all of these.
Even with careful attention to safety and implementation of quality risk management programs, you still need manufacturing insurance to help you mitigate your risks.
While your employees face work-related injuries and illnesses, you are also susceptible to equipment breakdown, product defects, fire, weather and other types of interruptions, such as these:
- 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
Footwear manufacturers need comprehensive footwear manufacturing insurance designed with the help of an experienced and knowledgeable independent insurance agent.
Basic Insurance Coverage for Footwear Manufacturers
Footwear manufacturers have numerous flammable materials on hand, including fabrics, plastics, yarn and appliqués. Your buildings, equipment and inventory are susceptible to fire, theft, vandalism and natural disasters.
- Commercial property insurance protects your building and other property in the event of a covered loss, such as fire, vandalism, smoke or theft. It provides coverage for fabric cutters, embroidery machines, warehouses and office space, office equipment, computers, and more.
- Business interruption coverage, or business income coverage, 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.
You should work with an experienced independent insurance agent who can help you evaluate how much and what type of coverage you need for your plant, equipment and inventory.
Another potentially devastating property risk for footwear manufacturers 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.
Footwear manufacturers also need several types of liability insurance for protection from third-party claims of negligence and the costs associated with lawsuits.
- Commercial general liability (CGL) insurance is necessary for occasions in which your business is negligent and causes bodily injury or property damage to a third party. Your CGL policy provides coverage for attorney fees, court costs, settlements and judgments up to the limits of your policy.
- 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. Claims for product-related damage 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.
- Commercial auto insurance covers your vehicle fleet and drivers in the event of an accident or other vehicle damage. 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.
- Commercial umbrella insurance, or excess liability coverage, provides an extra layer of liability protection to any of several other policies you might have. It is activated when the limits of your other applicable liability policies have been exhausted, protecting you when a covered claim exceeds the amount of coverage available from any other applicable policy.
What Is a Brands and Labels Endorsement?
Imagine you have a small fire in the office of your manufacturing facility. You have very little fire damage, but smoke has reached every corner of the plant, and fire sprinklers have added to the mess. Now, your facility is filled with smoke- and water-damaged products that can’t be sold – at least not as planned.
In these cases, a “fire sale” may be appropriate. Your property insurance company may consider these items a total loss. However, it may also want to attempt to sell them at salvage prices in order to recoup some of the losses that they have to pay out to you.
But do you want your visibly damaged, branded goods sold at a discount store? A brands and labels endorsement to your business property policy allows you to take control of this process and avoid any damage to your brand that could result. It allows you to remove your label or brand from damaged goods or mark them “salvage” and reimburses you for the costs associated with this process. This endorsement may also allow you to direct how and where the goods will be sold.
Protect Your Employees With Workers’ Compensation Insurance
Your footwear manufacturing plant can be a dangerous place for your employees, as they work with cutting and sewing equipment as well as hand tools and other specialized equipment. Your employees might be susceptible to cuts, pokes, crushed fingers or limbs, and repetitive motion injuries.
Excessive employee injuries and illnesses can be financially devastating for your business. Workers’ compensation insurance provides insurance coverage when accidents happen at 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 provides death benefits for a worker’s dependents if there is a fatality.
In addition to purchasing workers’ compensation insurance, you need safety programs and employee training that helps keep employee injuries to a minimum and your workers’ compensation claims and costs under control.
If You Ship Goods Overseas, You Need Cargo Insurance
Any importer or exporter who buys or sells goods overseas needs protection from huge financial losses should those goods be damaged or lost while in transit. If your goods are damaged during transit, you may lose no matter which side of the transaction you are on.
Cargo insurance covers the loss and/or damage of cargo while it is in transit by sea, air or land. It is often referred to as ocean cargo insurance, as in many cases the primary form of shipment is by boat. Cargo insurance can be standardized for all of your shipments or customized for every shipment you make or receive.
Footwear Manufacturers Need Tailored Coverage
How can you find tailored footwear manufacturing insurance? Talk to an independent insurance agent in the Trusted Choice® network who has experience working with manufacturers. Manufacturing insurance is complex and highly technical. You should work with an agent who can obtain proposals from multiple insurance companies that specialize in your industry.
Contact a Trusted Choice Agent for manufacturing insurance.