Machine shop owners face hazards every day because of the continuous risks in the work environment. Operating high-voltage machinery increases the risks and could lead to an arc flash. The machinery must be maintained and monitored at all times. Any failure to mitigate known risks places the business owner and their workers in dangerous situations. Company policies can provide guidelines for protecting the workers, the owner, and the property. However, even the most stringent policies won’t cover the unexpected. An insurer can conduct a complex risk assessment and show the business owner what policies could help them. Proper insurance is the best way to protect the company fully.
The Primary Function of Machine Shop Coverage
Machine shop insurance provides coverage for mechanical failures and breakdowns. These events could prevent the company from operating and serving clients. This generates a loss of income for the business owner. The policy covers mechanical failures and breakdowns providing funds to get repairs or replace the equipment altogether. It offers protection for computers and software used by the business owner and their workers. The insurance covers any conditions that could generate a loss of income or business for the company. Business owners can visit an insurer to find out more about insurance for your machine shop now.
Proper Coverage for the Commercial Property
The business owner needs commercial property insurance to protect their machine shop. The coverage protects against fires, natural disasters, and explosions in the workplace. However, there are clauses in the policy that dictate how much coverage is available for workplace disasters and guidelines the owner must follow. For example, high-voltage environments require frequent machine maintenance to test for arc flashes. The maintenance staff must use lock out tag out protocol for any machinery that could cause an arc flash. This prevents workers from using the machinery until proper repairs are completed or the machine is replaced.
The property coverage also protects all items stored in the property. If any machinery or equipment is damaged because of a covered event, the property owners receive replacement funds for these items. The owner needs true replacement options for the property and their equipment inside the commercial property. The terms of the policy define how much the property owner receives if the property is a total loss.
Worker’s Compensation Coverage
Employers must have worker’s compensation after hiring over one employee. The insurance provides coverage for medical expenses and gives the workers replacement wages while they are out of work. The human resources manager completes all claims for injured workers according to the guidelines. Insurers recommend company safety policies that address conditions that cause worker-related injuries. Conducting a risks assessment helps the owner address risks and ensures they have enough worker’s compensation coverage. With worker’s compensation, the owner could avoid a lawsuit by providing benefits to injured workers.
Commercial Auto and Cargo Coverage
Work automobiles require commercial auto and cargo coverage for the business. If the workers use vehicles to acquire supplies or to deliver products to clients, the business owner needs coverage to prevent financial losses. The amount of coverage depends on whether they have an existing loan on the vehicles. If they want comprehensive and collision coverage without auto financing, the owner can compare rates and cover their assets fully.
They’ll need coverage for their products, too. The insurance helps them prevent financial losses if an accident happens. The coverage provides funds to offset the loss of their cargo and enables the business to continue operating. The loss of cargo could generate customer loss if the business owner promised the product by a specific deadline. However, the coverage prevents the financial impact of these losses.
Product Recall and Liability Coverage
Creating products for release to the public requires the machine shop owner to follow strict guidelines. If they create machines and equipment, the owner and their workers must follow all Federal Trade Commission guidelines and regulations. Manufacturing products could present a risk of consumer-related injuries. Product liability coverage is a must for any companies that create its own products. The FTC’s Bureau of Consumer Protection can take action against the machine business if several customers sustain injuries because of the products. They issue a product recall if the agency believes the products are dangerous.
A product recall causes immediate damage to the business and their credibility. The blow could cause customer loss and a serious financial loss for the company. Proving that the products aren’t dangerous could be their saving grace. However, the company will need a defense attorney, and the legal fees are costly. The insurance coverage provides payments for legal fees and helps the business offer a settlement to keep the incident out of the press.
Coverage for Excess Perils
Extra insurance coverage is necessary if the commercial property is in a flood or earthquake zone. A greater risk of these perils requires a supplementary policy to prevent extensive damage. These perils aren’t covered under a standard commercial property policy if the location is a designated flood or earthquake zone.
General Liability Coverage
General liability coverage provides coverage for lawsuit damages. When operating a machine shop, there are several circumstances that could lead to a visitor-related injury. If the workers cause property damage, the client could see damages. If the business is in breach of contract, the client could file a legal claim.
Additional Coverage for Criminal Acts
Break-ins could happen to anyone, and business owners are at a greater risk. Coverage for break-ins gives the business owner funds to repair their property if the damage resulted from the crime. It replaces doors, windows, locking mechanisms, and even the security system if it was damaged.
Machine shop owners must follow every precaution to prevent property damage and personal injuries. Enforcing worker safety policies lower risks to workers. Extra measures to protect visitors can lower risks and prevent financial losses. However, even the most attention-oriented business owner can overlook a hazard. Proper insurance coverage protects them from serious risks and losses. Reviewing policies for a machine shop helps the owner get the coverage they need.