Ensuring your manufacturing business has the right insurance cover

Australia is home to more than 100,000 manufacturing businesses.

If yours is one of them, you’re probably familiar with the challenges that come with operating in this sector.

There’s no shortage of things that can go wrong and without the right insurance cover in place, it’s easy to end up out of pocket or, in a worst-case scenario, out of business.

These are some of the more common exposures manufacturing business owners need to safeguard against.

Product liability

If a customer suffers an injury to themselves or their property because of using or consuming your products, they may decide to seek compensation.

Product liability insurance can help cover those settlements and the costs associated with product recalls.

Errors and omissions extensions

Public and products liability wording can be extended to cover amounts that the insured becomes legally liable to pay as compensation for financial loss, arising out of a negligent act, error, or omission in connection with the business.

“Say, for example, you’ve fabricated a lift for a shopping centre and that lift proves to be faulty, tenants within the centre may claim they’ve suffered financial losses as a result,” Broker Technical Manager Michael White explains.

The nature of your business is an important factor to consider when determining the level of cover you’re likely to need.

“The nature of your business is an important factor to consider when determining the level of cover you’re likely to need”

Property and machinery damage

Property insurance can help you rebuild and re-open, should your premises be knocked out of action by a natural disaster, while machinery insurance can assist you to replace any plant that’s damaged or destroyed.

Food processing businesses that keep a significant volume of ingredients or stock in cold storage may wish to add machinery breakdown cover to their policies.

If equipment or parts aren’t available or need to be imported, the rectification process can be extremely protracted.

“Specialist machinery can’t be purchased off the shelf,” White says. “It could take months or even years before it’s delivered and then it may need to be commissioned by a representative from the supplier. It’s important business owners understand just how long it can potentially take before their lines are up and running again.”

Business interruption

Business interruption insurance can be critical for manufacturing businesses. Designed to help your enterprise keep operating after a catastrophic event, it can cover ongoing operational costs while you recover.

Business interruption insurance can also provide financial relief if supply chain disruption makes it impossible to obtain the materials needed in the manufacturing process.

“Without the right cover in place, a significant disruption to production could send your manufacturing business to the wall,” White says.

“Business interruption insurance is there to keep you ticking over financially until you’re able to recommence operations.

Injuries in the workplace

Regardless of the nature of your business, there’s always a risk of accidents and injuries in the workplace. Implementing stringent workplace health and safety procedures and ensuring all employees receive adequate training before setting foot on the factory floor can help you reduce it.

Your employees are entitled to seek compensation for any physical or mental injuries they incur while on the job. Should that occur, workers’ compensation cover can help you defray the cost.

Insurance for manufacturers in all sorts of times

If you haven’t reviewed your business insurance for a while, now is a great time to do so. A broker or adviser can help ensure you have the right cover for your specific business needs and circumstances.

Contact your broker or adviser today to discuss your manufacturing cover needs.


Important notice – Steadfast Group Limited ABN 98 073 659 677

This general information does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your insurance broker or adviser as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. These insurances are issued by various insurers and can differ.




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