4 major risks in manufacturing
The manufacturing industry is booming, adding 29,000 jobs in just one month. But as we’ve seen insuring thousands of manufacturing operations, with the good comes the bad. Risk is a normal part of the manufacturing industry.
by Mita Biswas
Business Insurance Account Executive at State Auto Insurance
The manufacturing industry is booming, adding 29,000 jobs in just one month. But as we've seen insuring thousands of manufacturing operations, with the good comes the bad. Risk is a normal part of the manufacturing industry.
People working in manufacturing might face dangers every single day. Safety and risk management should always be top of mind so that both you and your company are protected.
From importing risk to dust exposure, risk management is vital to your company's bottom line. It's also critical for the people involved so they can stay healthy. I've covered some of the major risks in manufacturing below. In my role, I see every day how insurance helps these businesses thrive as part of an overall risk management program.
Foreign suppliers and importing risk
Importing goods from foreign countries bring challenges, like products liability exposure and uncontrolled inspection practices. There are political and environmental challenges with different countries and cultures. And, foreign currency exchange rates can change at any time.
While there are some U.S. resources in place to ensure the safety of goods, they're limited. You have to be extra vigilant when it comes to monitoring and protecting your products and investments.
Major machinery fails
You know that when a piece of machinery fails, it can be out of commission for weeks or longer. That means lost production time and the cost to repair or replace. The right insurance can get you back up and running so lost time and the impact to your business is minimal.
We've all heard the horror stories of products being recalled after they've been sold in the marketplace. The costs can be huge - lost products and legal defense. Product recall (or product withdrawal) insurance comes in two main forms.
Product withdrawal expense pays for losses that directly affect the manufacturer. An example is the expense to pull back the affected product and cost to notify the public.
Product withdrawal or product recall covers losses to customers or others who are injured by a defective product.
Workers can be injured numerous ways: working on equipment, lifting and moving product. Asthma and dust exposures are also major risks with serious consequences. An injured employee may be out of commission for days or weeks, and sometimes permanently, leaving you with less people to get the job done. This can have a big impact on your production and delivery schedules.
This is just an overview. Each of these risks comes with multiple levels of challenges to overcome. Now that you've read this, the very next thing you need to do is review your insurance. Make sure you're working with an agent who knows the ins and outs of your business and can truly advise you on the best way to manage the risk in your manufacturing operation.
This article first appeared on LinkedIn Pulse.