Steel is the world’s most used metallic construction material thanks to its strength in relation to weight and price. Steel is used in a wide variety of applications, from buildings, vehicles, infrastructure, machinery, and medical instruments, to household appliances.
Steel products manufacturing is a complex and high-stakes industry, requiring careful attention to detail in production and risk management. Ensuring that steel manufacturing facilities are adequately protected involves securing a range of commercial insurance policies that address property, liability, worker safety, and even emerging threats like cyber risks. For steel manufacturers, understanding these insurance options can mean the difference between navigating disruptions smoothly or facing significant financial and operational setbacks.
This article will delve deeper into the essential commercial insurance coverages steel product manufacturers need to protect their operations fully, including expert guidance from Erika Melander, director of manufacturing underwriting at Central Insurance.
Property and Business Interruption Protects Your Metal Manufacturing Facility
A steel products manufacturer could suffer many different loss scenarios, which is why it’s important to work with an insurance provider like Central. Central understands the unique risks of the manufacturing sector and provides comprehensive property and business interruption coverage.
Commercial property insurance is essential for metal manufacturers, covering damage to the physical building and equipment, while business interruption coverage protects against financial losses when operations are halted. For instance, a fire in a production facility or a weather-related disaster, such as a tornado, could temporarily shut down operations. Business interruption coverage ensures your company can meet customer contracts and maintain financial stability during such periods.
Equipment breakdown is a separate property insurance extension specific to mechanical breakdowns, like a short-circuited fuse. “It doesn’t happen that often but it’s really important coverage to have in a steel products manufacturing facility, where every piece of equipment is going to be extremely valuable,” Melander explains.
She also recommends manufacturers operating in older buildings consider Ordinance or Law coverage, which addresses the additional costs of bringing a damaged building up to current codes after an incident.
Learn more: Meet Erika Melander, Director of Manufacturing Underwriting
Steel Products Manufacturers Need Long-term Protection
Steel products are often used in long-lasting applications such as buildings, machinery, and automobiles. As a result, the potential for future claims can span decades, which is why general liability insurance is critical for these durable goods manufacturers, as it protects your business from claims of injury or damage to property.
“A key aspect that cannot be emphasized enough is to work with an insurance carrier that has longevity and strong financial stability to address claims 50, 60, or 70 years from now,” Melander offers. “Steel is commonly used when durability is needed and if there’s an alleged issue with the steel’s performance, having a carrier that knows and understands your customers, industry, and applications is important to effectively and efficiently handle a claim.”
Steel manufacturers producing building materials should also consider the financial implications of product defects. For example, inaccurately cut or sized rebar could further affect an entire construction project. Errors & Omissions (E&O) insurance protects manufacturers from financial losses associated with these types of errors, safeguarding their reputation and helping mitigate the financial impact of any mistakes.
Workers’ Compensation is Vital for Manufacturing Facilities
Manufacturing facilities are inherently hazardous environments, making Workers’ Compensation insurance a vital part of any risk management plan. An operation positioned to keep employees safe through strong safety protocols and a proactive safety culture can help minimize incidents.
“Employees overriding safety safeguards is a significant challenge in the steel products manufacturing industry,” says Melander. “Failing to follow lockout/tagout procedures is a common cause of Workers’ Comp accidents.”
It’s recommended to conduct weekly safety meetings, cross-train employees in different areas of the facility, ensure safety signage is visible, and provide adequate personal protective equipment (PPE) that’s used regularly to reduce the risk of workplace injuries in a manufacturing facility.
Why Cybersecurity and Cyber Liability Insurance Matter for Steel Manufacturers
Cybersecurity may be a low priority for many steel manufacturers, but it should be considered. These companies are often easy targets for cyber threats because they don’t handle sensitive customer data like credit card information and, as a result, may take minimal steps to protect their operations.
Melander adds that Central’s Cyber Suite coverage provides protection against cyberattacks, including ransomware that can halt production and compromise essential data. Even former employees with access to outdated passwords can threaten a company’s operations by overriding specifications or deleting important documents if proper cyber protections are not in place.
Central’s Extensive History In the Manufacturing Industry
Steel manufacturers often choose insurance carriers based on relationships, not just price. Working with a carrier that understands the specific risks of the steel manufacturing industry is crucial. Companies need a partner who can guide them through the claims process in a way that protects their brand and reputation. Central Insurance offers some of the broadest coverage forms in the marketplace, with the needs of manufacturers in mind.
Central Insurance’s deep roots in the manufacturing industry, dating back to 1884, give it unique expertise in the sector. Steel manufacturers can feel confident that Central understands their specific risks and is committed to providing comprehensive protection for their operations. In a field as dynamic and high-stakes as steel manufacturing, having a knowledgeable insurance partner can make all the difference in navigating the industry’s complexities and ensuring long-term success.
Work with a Trusted Expert in Commercial Insurance
We invite you to learn more about our coverage for steel product manufacturers or start a conversation with your local Central agent. Our hand-picked independent agent partners will provide all the insight you need to ensure you have the right policy for your manufacturing business.
