Here at InsuranceHub, we love working with machine shop owners.
Whether you are a traditional job shop that does low volume high-quality work, or a shop handles high-volume work, we are here to help you. You have worked hard at building up your local business, haven't you? It is only right that you are justly concerned about protecting yourself from liability. After all, your clients rely on your advice and the work that you do for them. That is why machine shop owners can be sued for fraud and negligence in performance of duties.
What would you do if you were hit with a liability suit for more than your current insurance covered?
Thankfully, here at InsuranceHub we have experience helping machine shops with equipment like yours:
- Metal lathes
- Milling machine
- Machining centers
- Multitasking machines
- Drill presses
- Grinding machines
- Machinery and equipment for deburring, heat treating, electroplating, or painting.
Many of these tools are controlled by CNC and are very expensive to replace or repair, aren't they? What would you do if your industrial and commercial machining machinery was out of order or damaged by a fire?
Types of exposure that machinist shops need protection from:
Property exposures: Your office, production plant, and storage warehouse are all risk. Potential ignition sources include your sparks from grinding or lathing, production machinery, electrical panels, and . This is why it is imperative to practice good house keeping routines. Think about all of the potential fire hazards like the greasy and oily rags that your machinists use to clean the machinery!
Equipment breakdown exposures: If your equipment and machinery isn't working, then you will miss deadlines and lose customers! Talk to your agent about investing in an equipment breakdown policy.
Crime exposures: We encourage all of our clients to do back ground checks on all employees. Unfortunately, employee dishonesty is your biggest concern here. Temptation to steal high-tech parts or exotic metals can be a concern. We encourage having different employees to accept payments, disburse cash or balance bank statements. Finally we suggest monitored security systems and a video camera system.
Inland marine exposures:
- Do you offer credit to your customers? Then your accounts receivable is at risk.
- If you are machining your customers parts and products then you have a Bailees customers exposure.
- You have a computer risk with your computers that transact business, maintain inventory and operate your machinery.
- Are you delivering your clients finished products? Then you have a goods in transit exposure. Your biggest concern is fire, theft, collision, overturn, and water damage.
- Valuable papers and records. Keep copies of paperwork and computer files off site.
Premises liability exposure: This can be higher than usual if you have customers that need to be on site to for quality control purposes. Although they aren't your employees, they face the same on the job hazards your workers do. You also can be creating nuisance hazards for your neighbors with fumes, dust, and noise from your metal work.
Products liability exposure: This can be high if the final product is a critical part or system. Another concern you may have is whether you can handle the customer's specifications and the underwriters specs. We suggest having contracts that spell out your responsibilities, their responsibilities plus quality standards.
Additional exposures for machine shops:
Environmental impairment liability exposure: This can be a major concern due to ground, air, and water contamination from the chemicals, paint, and solvents that you use. Make sure that you STICK to federal and state guidelines in properly disposing of wastes.
Automobile exposure: Do you pick up raw materials, customers' property for your to work on or deliver finished product to the customers? TRAIN your drivers on how to safely load, unload and secure the goods during transport. Take the time to do MVR checks on all drivers on a regular basis.
Workers compensation exposure: This can be high. Many of your projects are bid with a deadline. Workers that are working with deadlines and penalties can rush and have accidents. Rushing can TEMPT workers to take safety guards off of machinery causing accidents that cause cuts and amputations.
Teach safe lifting techniques to prevent back injuries and hernias. Provide personal protection gear like safety glasses to prevent eye injuries from metal shavings. Design work stations ergonomically to prevent repetitive stress injuries.
Other machinist shop insurance coverage to consider:
- Employment-Related Practices Liability
- Business Auto Liability and Physical Damage
- Stop Gap Liability
Minimum recommended machine shop insurance coverage:
- Business Personal Property
- Business Income with Extra Expense
- Equipment Breakdown
- Employee Dishonesty
- Accounts Receivable
- Bailees Customers Floater
- Goods in Transit
- Valuable Papers and Records
- General Liability
- Employee Benefits Liability
- Environmental Impairment Liability
- Umbrella Liability
- Hired and Nonownership Auto Liability
- Workers Compensation