Protecting yourself and your business from liability is a very valid concern.
After all, your clients rely on your advice and the products that you manufacture. That is why owners of sheet metal companies can be sued for fraud and negligence in performing their 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 understand the risks that come with having a sheet metal shop:
Whether you are building custom duct work or metal panels, we're here to help. Regardless of your profession - sheet metal worker, maintenance worker, or installation worker - we look forward to talking with you.
Types of exposure that sheet metal shops need protection from:
Property exposures: Your concerns come from fires started at your operation. Your office, shop, yard, or warehouse has plenty of raw materials and finished goods. Now think of all of the things that could potentially ignite a fire:
- Production machinery
- Electrical panels
- Sparks from welding, grinding, or lathes
- Metal dust
- Spray painting
What can you do? First and foremost, your oil, lubricants, solvents, and degreasers may be flammable and so must be separated and stored away from the sparks that could ignite them. Dispose of all greasy oily rags to prevent a fire. Be sure to use spray booths that contain explosion-proof electrical components.
Equipment breakdown exposures: You have special equipment to do your work. Much of it may be computerized - for instance, you might have computerized equipment to do laser scroll cutting of sheets of metal. If your production equipment is down you can't fulfill your customer orders. Talk to your agent about the equipment that you use in your operations.
Crime exposures: Employee dishonesty can cost you hundreds of thousands of dollars. Set up a system to do background screening BEFORE you hire employees. It also makes sense to separate the duties of receiving payments, making bank deposits, and disbursing funds. It makes sense to install video cameras and an alarm system.
Inland marine exposures:
- Accounts receivable for credit extended to your clients.
- Computers: This includes computers that bill and maintain inventory. It also includes any computer-run machinery.
- Contractors' equipment and installation exposures if work is done at your client's location.
- Goods in transit: This includes any large sheets of metal that can be damaged during loading or unloading, especially in windy weather.
- Valuable papers and records.
Premises liability exposures: Do not permit clients to enter your work area to prevent customer injuries. Do you install the products you manufacture? Then you risk property damage claims. Stock stored in the yard could make kids want to climb the fence to play. Your neighbors may complain about any fumes, dust, and noise from the metal work.
Products liability exposures: This depends on what kind of products you are manufacturing. If the product is used for roofing or another protective function, failure may result in a lawsuit.
Environmental impairment exposures: If you are using chemicals, paint, and solvents, they can contaminate the earth, air, and water. Stick to the federal and state guidelines for waste disposal.
Automobile liability exposure: Do you have trucks that pick up raw materials and then deliver finished products to your customers?
Do you have sales people that use company vehicles? Do regular background checks on all drivers. Have a written procedure for using these vehicles after hours and allowing family members to use them.
Workers' compensation exposures: This can be quite high. Employees might be tempted to remove safety guards on machinery if they have to work quickly. Accidents happen when workers rush to meet deadlines. People can lose a finger or a hand on a cutting machine. It is also easy to get cuts from sharp metal edges. Your employees can get eye injuries due to metal shavings and skin irritations due to chemicals.
Teach your employees safe lifting habits to prevent back injuries. We encourage workers to wear safety glasses. They shouldn't wear jewelry or loose-fitting clothes that could easily get caught in a machine. Finally, we encourage your workers to rotate through different production stations to avoid repetitive strain injuries.
Here's the minimum recommended sheet metal company insurance coverage:
- Business Personal Property
- Business Income with Extra Expense
- Equipment Breakdown
- Employee Dishonesty
- Accounts Receivable
- Goods in Transit
- Valuable Papers and Records
- General Liability
- Employee Benefits Liability
- Environmental Impairment Liability
- Umbrella Liability
- Hired and Nonownership Auto Liability
- Workers' Compensation
Other sheet metal contractors' insurance coverage to consider:
- Contractors' Equipment and Tool Floaters
- Installation Floater
- Employment-related Practices Liability
- Business Auto Liability and Physical Damage
- Stop Gap Liability