Manufacturing and Machine Shop Insurance

 

 

Due to their high concentration of property values, manufacturers and machine shops face greater risk of business interruption than other industries.  Having an insurance and risk manager to assist in determining the value of a potential interruption caused by a physical loss is a great benefit.  

My prior work experience in the public accounting field allows greater insight and more accurate calculations of the cost of risk and the necessary costs to restore clients’ operations.

 

Work in process – your profit on the shelves.

During the process of manufacturing, there are factors of overhead and profit attached to each product as it travels through the plant. Many times, these products are partially completed and stored on a shelf awaiting final assembly.  Having an insurance advisor who doesn’t understand the capitalization of inventory or the proper valuation of in-process inventory after a loss will cost you thousands of dollars.  I work with my clients to determine the value of all inventory, from raw goods to work in process to finished goods.

 

The global reach of products.

To remain competitive, manufacturers and machine shops are doing more work with overseas companies than ever before.  I have found many shipping agreements provide no coverage for inventory that leaves foreign shipping docks until it lands in North America.  I work with several insurance carriers to provide proper coverage at a competitive price.  If you need international liability policies, I have markets that provide them. Most of my international insurance experience is with US companies doing business in Hong Kong and China.  

Many Ocean Marine Cargo policies cover physical loss of the inventory and can include war and business interruption due to civil unrest at a foreign or domestic shipping yard.

 

Manufacturing and Design.  What caused the accident?

There is a fine line between a design defect and a faulty product in the market place.  Most general liability insurance policies exclude professional services such as design and professional recommendations.  

I provide Manufacturing Errors & Omissions coverage with General Liability coverage on all of my manufacturing and machine shop clients liability policies to remove this coverage gap.

The Ford Pinto was known for a design defect because the engineers put the gas tank in the rear of the car, barely protecting it from a rear end collision.  Ford paid many claims through their manufacturing E&O  coverage, not their standard general liability.  Has your business made some design changes to a product?  Are you covered? 

 

Lock out – Tag out.  How proper planning saves lives and limbs.

Lockout-Tagout is nothing more than a reliable means of communicating to others in your facility that a piece of machinery is not operating and needs to remain off.  A majority of non-lifting injuries in machining are caused by not interrupting all power sources or not discharging all sources of stored energy to the machine before repair and maintenance operations begin.

I assist my clients in assessing and creating a formal OSHA lockout-tagout training program and machine specific EDPs.  If you are interested in knowing more about the process, send me an email. 

 

Lift index.  Quantifying the danger of a pull or strain accident.

There is a mathematical calculation that measures the risk of a lifting injury for a specific work activity.  After observing and taking on site measurements, I provide my clients the NIOSH Lift Index Calculation.  If the index indicates that the activity will most likely lead to an injury, we look at factors such as repetition, reach, twisting and distance of lift to reduce the index factor and the probability of injury.