Manufacturing Insurance for Machinists in Calgary
When you fabricate parts or manufacture products and send them on to the next step in the supply chain, there are a lot of things that can potentially go wrong between your loading bay and the end-user—and you could be held liable in the event that your goods or services cause bodily injury, property damage or even environmental harm. Comprehensive manufacturing insurance is critically important regardless of what you happen to be manufacturing, but machinists are exposed to unique risks on a regular basis that many other types of manufacturers don't have to worry about. The way you choose to operate your machine shop is unique, which is why you need specialized machine shop insurance. Calgary machine shop owners can get a custom policy that is designed to protect against all the perils they are most likely to encounter by speaking with an experienced Krywolt Insurance broker.
What is Calgary Machine Shop Insurance?
Machine shop insurance is a type of manufacturing insurance that focuses specifically on the insurance needs of machine shop businesses. Some parts of it are designed to protect you against paying out of pocket should someone make liability claims against you, so you're able to recover related attorney fees, settlement costs, medical expenses, repair or replacement for damaged property, and more. Other elements can include coverage for disasters that render your commercial property unusable, mechanical equipment breakdown exposures, product recall expenses, and more, depending on how your individual Calgary machine shop insurance policy is written.
Who Needs Machine Shop Insurance?
If you operate a machine shop, it's very important to invest in Calgary machine shop insurance so you can get the peace of mind that comes with knowing your business won't be ruined by unexpected financial losses. That includes machine shops that work with metal, plastic, or composites, whether you're producing finished goods or fabricating components, and whether you are making simple mechanisms or high-tech parts. It doesn't matter how cautious you are or how carefully you do everything by the book—some perils simply can't be avoided. Paying staggering costs out of pocket in the event of a lawsuit or disaster isn't possible for most business owners, and such an event could cause catastrophic damage to your professional and personal finances if you aren't protected by the right machine shop insurance coverage.
What is Included in Calgary Machine Shop Insurance?
There is a wide variety of Calgary machine shop insurance coverage available, so no two commercial insurance policies are exactly alike. Here are a few of the coverage types that are either necessary components of business insurance or well worth considering as additions to your policy.
Commercial General Liability (CGL)
Commercial general liability is a basic part of business insurance coverage that is intended to protect you from financial loss in the event that someone makes a third-party claim against you for bodily injury, property damage, or personal harm. Your insurance carrier will provide funds to cover legal defense and settlement costs, medical bills, and the cost of repair or replacement for damaged property.
Suppose a potential client comes into your business facility to negotiate a contract or inspect your operation and injures themselves by tripping over a shop vac on the floor. In that case, they could sue you to recoup the cost of their medical bills and rehabilitation expenses. If you're covered with commercial general liability as part of your Calgary machine shop insurance, you can get financial assistance for legal defense fees and the cost of the settlement against you, should the lawsuit be successful.
Commercial Property Insurance
Whether you're in charge of a huge facility or a cozy little shop, your business operation is dependent on you having access to the space that has been specifically tailored to accommodate your manufacturing processes. But catastrophic damage or loss caused by fire, natural disasters, or theft will leave you out in the cold with no way to repair your facility and get your machine shop up and running again unless you have commercial property coverage on your Calgary machine shop insurance.
Commercial property insurance falls into one of two categories: all-risk or named perils. All-risk coverage protects you against a wide range of common or likely perils, except the ones that are specifically excluded in your policy. On the other hand, a named perils policy offers financial protection against the specific risks that are listed in your Calgary machine shop insurance policy—also known as the "named perils." The question of whether all-risk or named perils is better for your particular circumstances is determined by a range of factors. Speak to your Krywolt Insurance broker about business insurance services so they can ensure you have the right type of commercial property insurance for your particular needs.
Equipment Breakdown Insurance
Machinists need far more than just basic hand tools to do their jobs effectively and safely. There's simply no way to carry out business operations at your machine shop without your essential machine tools and other equipment. This is why it can feel like the end of the world if you have a piece of specialized equipment shudder to a stop just when you're ramping up production to fill a significant contract. Equipment breakdown insurance is well worth considering for your Calgary machine shop insurance because it covers replacement or repair costs for equipment that has broken down because of damage related to motor failure, power surges, or operator error. For example, if you opened up your shop one morning and discovered a boiler had exploded during the night, causing damage to your facility. Your commercial property insurance would cover the damage to the facility—but repair or replacement of the boiler itself would be handled under your equipment breakdown insurance.
Professional Liability Insurance
You occupy an important position in the supply chain for the items you produce, and that means it's well worth considering the addition of professional liability coverage to your Calgary machine shop insurance package. Professional liability, which is also known as errors and omissions insurance, offers you liability protection against the costs associated with being sued for allegedly failing to provide a product or service as promised, professional negligence, breach of contract, bad advice and more. This is a particularly important coverage if you provide design services or offer professional advice to your clients, such as advice on the best way to incorporate a component you fabricate into a more complex product.
Product Liability Insurance
Product liability coverage is a specialized type of commercial general liability insurance that provides financial assistance for expenses that result from harm caused by one of your goods or components. Product liability claims can be related to injury and illness caused by defects in design or the manufacturing process. They may also be related to problems such as labels that are inaccurate or misleading or noncompliance with advertising regulations or because you failed to warn a consumer how to use a product. Suppose you fabricate a defective component that causes a disruption to a manufacturing partner's product line, and as a result, they fail to meet their contractual obligations to suppliers. In that case, you could be liable for damages, but your insurance provider will help cover those expenses if you have product liability insurance on your Calgary machine shop insurance policy.
Pollution Legal Liability
Some parts of the manufacturing processes used in a machine shop have the potential to create environmental hazards. Environmental liability is a complementary addition to your Calgary machine shop insurance if you work with chemicals, solvents, or paint that can cause damage to the ecosystem if they are accidentally released into the air, soil or water. Pollution legal liability coverage applies to both sudden disasters like a chemical spill and gradual damage caused by an issue like a slow leak that is allowing contaminants to seep into groundwater. In scenarios like that, you could be liable for astronomical clean-up costs, property damage, bodily injury claims, and more that are associated with a polluting event that caused environmental harm. It can also apply to legal defense costs if legal action is brought against you because you caused ecological damage.
Cargo Insurance
When running a business that involves shipping products, whether locally or internationally, it's essential to evaluate the options for cargo coverage as part of your machine shop insurance policy. It's crucial to understand that unforeseen events can occur during the transportation process, and cargo insurance provides protection against potential financial losses resulting from damage or loss of cargo. When it comes to machine shop insurance in Calgary, cargo coverage is a critical consideration in safeguarding your business's assets.
Cargo insurance can be categorized into two main types: inland and marine. Inland cargo insurance pertains to goods transported over land by truck or train. However, it is important to note that most standard inland policies do not cover goods crossing a border and are primarily designed for domestic deliveries within Canada. On the other hand, marine cargo insurance provides coverage for shipments transported across water by ship or airplane. This type of insurance encompasses a wider range of risks, such as sinking, ship collisions, piracy, loading and unloading damage, and various other potential circumstances. It is worth mentioning that cargo insurance differs from freight insurance, as cargo insurance protects the shipper or cargo owner, while freight insurance safeguards the carrier or freight forwarder.
Additional Coverage for Calgary Machine Shop Insurance
- Commercial Auto Insurance
- Business Interruption Insurance
- Systems Breakdown Insurance
- Product Recall Coverage
- Cyber Liability Insurance
- Crime Insurance
- Employee Dishonesty Coverage
- Employment Practices Liability Insurance
- Accounts Receivable Coverage
- Stock and Inventory Insurance
Is It Mandatory to Have Machine Shop Insurance in Calgary?
There are no mandatory business insurance requirements in Alberta, so your machine shop business is not obligated to have insurance coverage. That being said, it would be incredibly reckless to run a machine shop without the protection of a robust Calgary machine shop insurance policy. There's no doubt that eventually, the cost of going without insurance will be far, far higher than the amount you have to pay for your premiums.
Regardless of how cautious you are, it's impossible to prevent everything that could go wrong in relation to your machinist business, from litigation and product recalls to severe damage caused by fire or flood. Keep in mind that you could also have legal action brought against you for allegations that are not true and be forced to defend yourself in court. Random mishaps and unfortunate mistakes could end up costing you your livelihood if you have to cope with unexpected financial losses and don't have financial support from your machine shop insurance provider.
There's another potential pitfall that comes with forgoing machine shop insurance in Calgary—some clients will refuse to work with a machinist who doesn't have machine shop insurance and take their money to your competitors instead. Let the dedicated team of brokers at Krywolt Insurance advise you on the comprehensive insurance protection you need so you don't have to sacrifice the business you've poured your heart into.
What Influences the Risk Evaluation of My Products?
When determining your eligibility for certain Calgary machine shop insurance products and the rates for that coverage, insurance companies carry out a risk assessment of your products’ liability exposure by evaluating criteria such as:
- Your quality standards
- If you import materials or components from other countries, and if so, where they come from
- Whether the materials you use in your manufacturing processes are potential hazards
- The safety procedures you have in place
Another factor that may significantly impact your product risk evaluation is if you are fabricating critical components of a system for something like an automobile or medical equipment. The brokers at Krywolt Insurance have the experience and expertise to guide you through the risk evaluation process and find the best possible coverage options for your Calgary machine shop insurance.
Are Product Liability and Product Recall Coverage the Same Thing?
At first glance, they might seem to be more or less the same, but product liability and product recall insurance provide coverage for different types of expenses. Product liability coverage on your Calgary machine shop insurance is meant to provide financial assistance with expenses that arise from legal claims alleging your goods caused injury or damage, was labelled incorrectly, or did not comply with advertising regulations. That could include legal defense fees, settlement costs, and other related expenses.
If it is found that your goods did indeed cause or were subjected to the issues listed above, it could trigger a product recall. Your product liability coverage protects you against financial losses from lawsuits, but it doesn't apply to the massive expenses that come with a product recall, including:
- Retrieving products from suppliers or retailers
- Rehabilitating products, so they are appropriate for sale if it's possible to do so
- The financial loss of products that can't be rehabilitated
With product recall coverage, machine shops in Calgary can get back to business as soon as possible with financial support from their insurer to pay expenses related to the logistics of a product recall.
Is Stock and Inventory Covered by Commercial Property Insurance?
Yes, your stock and inventory is included in the contents coverage part of your commercial property insurance to a degree—but if you keep a lot of raw materials and finished products on your commercial property, the contents coverage on your Calgary machine shop insurance may not be adequate to protect you against loss. When your manufacturing process is complete, you still have to consider the storage of your finished products and raw materials. These components represent a significant investment in your business. In the unfortunate event of a fire that damages your facility, your commercial property insurance will provide some assistance in recovering and rebuilding. However, the value of the lost stock and inventory will likely surpass the basic limits of your machine shop insurance policy. That is why it is essential to have stock and inventory insurance. This additional coverage enables you to replace damaged, destroyed, or stolen materials and stock, minimizing disruption in your supply chain. With this support, you can quickly get back to business.
Where Can I Get a Good Rate on Calgary Machine Shop Insurance?
Don't leave yourself unprotected from paying out of pocket to mitigate the many potential risks that can befall you over the course of your business operations. Call 403-475-5434 to speak with a qualified commercial insurance specialist at Krywolt Insurance and get the Calgary machine shop insurance coverage you need to sleep easily at night knowing you're safe from financial losses.
