Insurance Challenges and the Heavy Manufacturing Industry
We’ve seen and written about the impact of the COVID-19 pandemic on many industries, the heavy manufacturing industry included. In the beginning of 2020, production fell, there was a decline in demand, a drop in employment and major disruptions to supply chain. The industry has started to rebound, but there is another issue that needs addressing – a lack of interest from insurance carriers to take on risks presented by the heavy manufacturing industry.
The heavy manufacturing industry faces varied exposures from operations to employees to customers. In addition to a commercial general liability (CGL) policy, heavy manufacturing businesses require additional insurance coverage to protect themselves including:
- Business Income & Extra Expense to cover overhead during suspended operations
- Commercial Auto Insurance to cover your business’ auto, leased and rented vehicles
- Commercial Property Insurance to cover business property and equipment
- Directors and Officers Liability (D&O) to cover defense costs and damages from claims
- Employment Practices Liability (EPLI) to cover claims and lawsuits from employees
- Product Recall Insurance to cover costs from a recall
- Umbrella/Excess Liability to cover catastrophic losses
- Workers’ Compensation to cover expenses from employee injuries
We recently gave a summary of the Q4 2020 Council of Insurance Agents & Brokers Commercial P/C Market Survey. We saw that underwriting capacity issues continue for the most troubled lines including Umbrella, D&O, Commercial Property and Commercial Auto.
These capacity issues apply heavily to the heavy manufacturing industry. Earlier this year, the Business Insurance Team read an article in Leaders Edge written by president and CEO at Pennsylvania Lumbermens Mutual Insurance Company. In it, the author talked about addressing these issues. It starts with rethinking manufacturing risk – a combination of adequate rates, risk mitigation practices from the insured and risk management practices from the carriers.
Overall, creating a culture of safety help manufacturers protect against any disruptions and high costs that can come from the absence or loss of critical employees. It’s important to conduct regular job safety analyses, assess risks and make safety improvements. Especially with more challenging operations, carriers respond positively when we can proactively demonstrate what steps are being taken to mitigate risk.
With all of this in mind, we continue to work with clients to find the best policy to meet your needs at the best rate, without sacrificing necessary coverage or insurer services. In addition, we are a full-service multi-line brokerage meaning we can provide expertise in specific areas of loss control, loss prevention, safety, employee training and risk benchmarking.
If you are in the heavy manufacturing industry and would like some help or more information, contact the R&K team here or by calling (800) 242-4433.