There are many types of manufacturing facilities that must be operated according to standards to ensure they are safe. Depending on the types of products manufactured, there are always risks associated with the operation. Every manufacturing facility needs a well-planned risk management strategy to address the different situations that occur as a result of the manufacturing process. Although this will help reduce risk a great deal, there is never a guarantee that accidents cannot occur. Manufacturing insurance is designed to give manufacturing companies the protection they need when the precautions they take aren’t enough.
The reason that many manufacturing facilities fail to reach their maximum productivity level is their lack of understanding that productivity and safety are dependent on each other. Putting a risk management strategy in place and having appropriate manufacturing insurance will result in their keeping safety incidents to a minimum and having financial coverage when incidents do occur.
Creating an Effective Risk Management Strategy
Just as different manufacturing businesses operate differently, they also have a different approach to risk management. Those who have successfully implemented risk management into their operation to make it more productive and safe are likely to start by assessing the likelihood of diverse events for assets and operating procedures and then continue with assessing the impact of these adverse events. Next, they will rank the risk for adverse events in these areas and then create a closed loop process to mitigate the risk in each area. This basic structure incorporates identification, quantification and mitigation.
Backing up Your Strategy with Manufacturing Insurance
Nearly every manufacturer needs insurance regardless of the products they make. There are laws imposed on the need for manufacturers to carry insurance that may vary on a state-by-state level. Even in those situations where the rules and regulations are limited, manufacturers should consider their risk potential when determine the degree of manufacturing insurance they need to protect them. Insurance can cover the cost of equipment repairs and replacement, damage to the facilities, or for medical liability in case employees are injured on the job.
General liability is a type of insurance that protects the manufacturer when an injury takes place on their property and they are found to be at fault. Lawsuits can be devastating to your business if you do not have the protection you need to cover any losses that may be awarded. General liability should be the basic part of your coverage that is included in addition to that which applies to your specific risks.
Value of Insurance Your Business
When accidents occur, it can have an impact on your manufacturing business at any level. Loss of equipment or employees can lead to downtime that has a significant impact on your bottom line. Lawsuits or excessive damage to the facility could cause you to lose your business altogether. Understanding your risk and having the manufacturing insurance to cover your losses can often be the difference between a business that fails and one that is both safe and productive.