Metal and steel manufacturers and fabricators encompass a broad range of businesses that may forge, spin, shear or braze metal into components used in construction projects or other products. Metal manufacturers engage in dangerous work with large, expensive and dangerous equipment – making the risk for employee injury, equipment breakdown, product defects, fire, weather and other types of interruptions a daily concern.
Employees of steel fabricators and other kinds of metal manufacturers face safety concerns every day as they weld and cast metal using heavy, expensive and dangerous industrial equipment. If you own or operate a metal or steel fabrication business, you need to understand all of the risks that are present and how to protect your business and your employees from devastating injuries, property damage and financial loss.
Here are some of the risks you might face every single day:
You need a comprehensive metal manufacturers insurance program in order to address these risks and more, depending on the specific needs of your business.
You can protect your operations, products and employees with a variety of metal manufacturers insurance policies tailored to your needs.
While metal manufacturers do not regularly have customers or the general public on their premises, every business needs general liability insurance for occasions in which the business is negligent, leading to 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.
Metal and steel fabricators might also have product liability exposures, like any manufacturer. 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.
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 never assume that the coverage is sufficient. 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. The coverage provided in your CGL policy may be sufficient, and if not, your agent can help you secure appropriate coverage for your business.
Metal manufacturers may have in place a variety of transportation arrangements as their products, equipment and other goods are moved from place to place. 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.
If your metal manufacturing business is also involved in trucking, fleet safety is paramount. Working together with your independent insurance agent and your insurance company, you can design and implement insurance and safety programs that keep your drivers safe, your cargo intact and your insurance rates under control. Employing only highly qualified drivers and requiring unfailing safety practices should be top priorities.
The nature of the metal manufacturing business is inherently dangerous. Not only do you face risks from working with and near large, dangerous equipment every day, but your plant and equipment are as susceptible to fire, theft, vandalism and natural disasters as any other type of business. 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 can provide 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 can also include business interruption coverage, or business income coverage, which 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). This coverage is invaluable if you are forced to close your doors for a period of time in order to make repairs. It pays for rent, employee salaries, lost income, relocation fees and more.
In addition, 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.
Determining how to best to cover all of your business property is essential. You need to work with an experienced independent insurance agent who can help you evaluate and calculate appropriate valuations for your plant and equipment and determine the right policy limits. An agent with experience writing metal manufacturer insurance can help you properly differentiate coverage for your building, heavy equipment and other contents.
Another major property concern for metal and steel fabricators is the potential for damage to your product as it is being transported from place to place. Your shipping contracts determine which party is responsible for a product as it is transported, and you may often need inland marine insurance. Inland marine insurance protects you from losses when cargo is damaged in transit. It covers a variety of shipping and transit situations including but not limited to the following:
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 metal manufacturers.
Another potentially devastating property risk for metal or steel fabricators 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. While the name evokes images of old, outdated machines, equipment breakdown insurance includes coverage for the latest technologies. 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 related to a breakdown of covered machinery or equipment. It may also cover related business interruption costs.
The safety of your employees should be one of your highest priorities. Metal and steel manufacturing facilities are dangerous places where workers come into contact with heat and welding tools; heavy machinery; and numerous dangers to fingers, toes, eyes and other appendages. Safety is paramount not only for your employees but also for your company’s financial viability.
Employers are legally and morally obligated to provide a safe workplace for their employees. But accidents happen everywhere. 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 provides death benefits for the worker’s dependents if there is a fatality.
No two states have exactly the same workers’ compensation laws. Each state’s statutes outline 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.
Almost every state requires employers to carry workers’ compensation insurance – with a few exceptions. This alone is a sufficient reason to have a workers’ compensation policy for your business. States levy heavy penalties for noncompliance with workers’ compensation laws.
Because the metal manufacturing industry is considered highly dangerous for employees, workers’ compensation is one of the most important aspects of your business insurance program. In addition, implementing safety programs and insisting on worker compliance is the only way to keep your workers’ compensation claims and costs under control. Find an experienced workers’ compensation insurance agent who has experience in the metal manufacturing industry in order to make sure you have the right coverage and safety programs in place.
Metal manufacturers face numerous risks to their business, from typical property and liability exposures to serious safety concerns. It is essential that metal and steel fabricators find and work with an experienced independent agent who specializes in manufacturing insurance and all of the safety concerns that come with the territory. Your agent will get to know your business as well as you do and can be your adviser and partner as you work to minimize and mitigate the risks you face.