Manufacturer Insurance

Commercial Property and Inventory Valuation

Your building, your equipment, your raw materials, your finished goods inventory: commercial property insurance covers all of it against fire, theft, weather damage, and other covered perils. The critical detail most manufacturers get wrong is valuation. Replacement cost coverage pays to replace damaged property at current prices. Actual cash value coverage deducts depreciation. On a $2 million CNC machine that's five years old, that difference could be hundreds of thousands of dollars.

Work with your agent to conduct annual inventory valuations. Raw material costs fluctuate significantly, and being underinsured because your steel inventory doubled in value is a painful way to learn about coinsurance penalties.

Equipment Breakdown and Boiler Insurance

Standard property policies often exclude mechanical or electrical breakdown. Equipment breakdown insurance (sometimes still called boiler and machinery insurance) covers the repair or replacement of production equipment that fails due to electrical surge, mechanical breakdown, or operator error. For manufacturers running expensive, specialized equipment, this coverage is essential. A single motor failure on a production line can cost $50,000 to $200,000 in repairs and lost production time.

Business Interruption and Supply Chain Contingencies

Business interruption insurance replaces lost income and covers ongoing expenses when a covered event shuts down your operations. The key phrase is "covered event": if your property policy covers the peril that caused the shutdown, business interruption responds.

Contingent business interruption extends this to your supply chain. If your sole-source supplier has a fire and can't deliver critical components for three months, contingent BI coverage helps keep your business solvent while you find alternatives. Given the supply chain disruptions of recent years, this coverage has moved from "nice to have" to "must have" for most manufacturers.

Workers comp is mandatory in nearly every state for manufacturers, and for good reason. Manufacturing consistently ranks among the highest-risk industries for workplace injuries. Cuts, crush injuries, repetitive motion disorders, chemical exposure, and hearing loss are all common claims.

Your workers comp premium is driven by three main factors: your state's rate structure, your payroll by classification code, and your experience modification rate (EMR). That EMR is where you have the most control. A strong safety program, rapid return-to-work protocols, and proactive claims management can drive your EMR below 1.0, which directly reduces your premium. Conversely, a couple of serious claims can push your EMR above 1.0 for years.

One area where an experienced agency like Avery Insurance Agency adds real value is in reviewing your classification codes. Manufacturers often have employees misclassified under higher-risk codes than their actual duties warrant. A proper audit can save thousands annually. With over 125 years of advocating for clients, Avery's consultative approach is built around finding exactly these kinds of vulnerabilities.

Fleet Management and Hired/Non-Owned Auto

If you operate delivery trucks, service vehicles, or company cars, commercial auto insurance is required. Fleet policies cover liability and physical damage for owned vehicles. But here's what many manufacturers miss: hired and non-owned auto coverage. If an employee drives their personal car to pick up parts from a supplier and causes an accident, your business can be liable. Hired and non-owned auto coverage fills that gap.

For manufacturers running fleets of five or more vehicles, telematics programs and driver safety training can meaningfully reduce premiums. Insurers reward fleets that demonstrate lower risk through data.

Inland Marine for Goods in Transit



Despite the name, inland marine insurance has nothing to do with boats. It covers goods, materials, and equipment while they're in transit or stored at locations you don't own. For manufacturers shipping finished products to distributors, moving raw materials between facilities, or storing inventory at a third-party warehouse, inland marine coverage protects against loss or damage that standard property policies won't cover because the goods aren't at your insured location.

Getting the right coverage at the right price isn't about buying the cheapest policy. It's about structuring your program intelligently.

• Conduct annual risk assessments to identify new exposures and eliminate coverage you no longer need.
• Bundle policies through a single carrier or program to access multi-policy discounts, sometimes 10-15% off total premium.
• Invest in loss prevention because every dollar spent on safety training, equipment maintenance, and quality control reduces future claims and lowers your EMR.
• Review deductible structures since higher deductibles lower premiums, but only take on retention you can actually afford to pay.
• Work with a specialist because a generalist broker who mostly writes auto and homeowners policies won't understand manufacturing-specific endorsements, exclusions, or market options.

This is where working with an agency that takes a consultative approach to uncover vulnerabilities makes a measurable difference. Avery Insurance Agency builds tailored portfolios of coverage specifically designed around each manufacturer's unique operations, equipment, and risk profile.

How much does insurance cost for a small manufacturer? Annual costs typically range from $9,000 to $28,000 or more, depending on your revenue, number of employees, equipment value, and the types of products you manufacture.

Do I need product liability insurance if I make components, not finished goods? Yes. Even component manufacturers face product liability claims if their part contributes to a finished product failure. Your contract with the end manufacturer may also require it.

Can I reduce my workers comp premium without cutting coverage? Absolutely. Improve your EMR through safety programs, return-to-work initiatives, and proper employee classification. These steps directly lower your premium over time.

Is cyber insurance really necessary for manufacturers? Manufacturing is the top target for ransomware. If any part of your production relies on networked systems, cyber coverage protects against both the financial loss and the operational shutdown.

What's the difference between inland marine and commercial auto coverage? Commercial auto covers your vehicles. Inland marine covers the goods inside those vehicles, plus materials stored at locations you don't own.