General liability insurance is a crucial part of any manufacturing business. It helps cover common risks such as third-party injuries, property damage, and advertising claims. However, general liability insurance often has exclusions that can leave businesses vulnerable to certain risks. Let's explore a few manufacturing risks that general liability exclusions do not cover, helping you understand what protections you may need beyond this standard coverage.
One of the most critical risks not covered by general liability insurance is product liability. If a product you manufacture causes harm to a customer or their property, the cost of defending a lawsuit and any resulting damages is not covered under general liability insurance. To protect your business from these types of claims, you will need product liability insurance specifically designed to cover manufacturing defects, design flaws, or improper labeling.
While general liability insurance covers injuries that occur to third parties, it does not cover injuries sustained by your employees. Employee injuries that occur on the job should be covered by workers' compensation insurance, a separate policy. Workers' compensation provides benefits, including medical expenses and lost wages, to employees who are injured while performing work-related duties.
If your manufacturing business offers consulting or design services, general liability insurance typically does not cover errors or mistakes in your professional services. For example, if an engineer makes an error in the design of a product or a consultant provides incorrect advice that leads to a financial loss for a client, you would need professional liability insurance to cover these types of claims.
General liability insurance protects against property damage to third-party property, but it does not cover damage to your business property. In the event of a fire, theft, or other incident that damages your business property, you will need property insurance to cover the costs of repairs or replacement. This includes equipment, machinery, inventory, and the building itself.
Manufacturers are often involved in processes that can have an impact on the environment. General liability insurance does not cover damage caused by pollution or other environmental risks. For example, if your manufacturing process leads to soil or water contamination, you would need ecological liability insurance to protect your business from the costs associated with cleaning up pollution or defending against environmental claims.
While general liability exclusions may limit the coverage offered by standard policies, understanding these exclusions and addressing the gaps is key to protecting your manufacturing business. By obtaining the necessary supplementary coverage, such as product liability, workers' compensation, and environmental liability, you can ensure your business is fully protected from a wide range of risks. At Knight Insurance Services, we help businesses assess their risks and find the right insurance solutions to cover those gaps.
For more information on how to protect your manufacturing business from these risks, contact us today at (818) 662-4200 for expert advice and comprehensive insurance solutions.
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