Machinery and equipment are the backbone of manufacturing operations. Ensuring these assets are properly insured protects against financial losses from breakdowns, accidents, or unexpected events. Selecting the right insurance requires a comprehensive understanding of your operation’s specific needs and potential risks.
Coverage Options for Manufacturing Equipment
- Equipment Breakdown Insurance
- Covers repairs or replacements due to mechanical or electrical failures.
- Includes damage to boilers, presses, or CNC machines.
- Property Insurance
- Protects against physical damage from fire, storms, or vandalism.
- Covers the cost of replacing permanently installed machinery.
- Inland Marine Insurance
- Provides coverage for equipment transported between locations.
- Ideal for mobile machinery or tools used at various job sites.
Additional Considerations
- Replacement Cost vs. Actual Cash Value: Decide whether the policy should cover the cost of a new replacement or the depreciated value.
- Downtime Coverage: Add business interruption insurance to cover lost income during repairs.
- Preventative Maintenance Clause: Many insurers require proof of regular maintenance to validate claims.
Tips for Selecting the Right Policy
- Conduct a thorough inventory of all equipment, noting its value, age, and usage.
- Work with an insurance provider experienced in manufacturing policies.
- Regularly review and update coverage as new equipment is acquired or existing machines are upgraded.
Insuring machinery and equipment is an essential step in safeguarding a manufacturing operation. With the right policies in place, manufacturers can focus on production without worrying about the financial impact of unexpected disruptions.
