This guide cuts through the jargon to lay out exactly what type of insurance a manufacturing company needs and how to match it to your operations. We’ll explain in plain language:
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There are two key types of insurance for manufacturers: General Liability and Product Liability. Most manufacturers also need to customize their policy to fit their product risks and meet retailer, distributor, or OEM contract requirements using these:
- Higher limits (aka more coverage for bigger business or contracts)
- Add-on protections: Product Recall, Workers Comp, Commercial Property, Inland Marine, Errors and Omissions, Cyber Liability, Commercial Auto, and Surety Bonds
- Contract endorsements: Worldwide Coverage, Primary and Non-Contributory, Waiver of Subrogation, and 30-Day Cancellation Notice
What Is Manufacturing Insurance?
Manufacturing insurance protects your business from the financial fallout of accidents, defects, or damage tied to the products you make. If your business causes somebody to get hurt or causes property damage, your manufacturing policy can cover some or all of the related costs
This coverage helps you stay compliant, protects your revenue, and ensures that operations continue to run smoothly. From there, optional coverages and endorsements can be added to tailor your policy to your exact needs and risks. Here’s how it all fits together.
Core Coverages in Manufacturer Liability Insurance
Every Insurance Canopy manufacturer policy starts with General Liability Insurance and Product Liability Insurance.
Think of insurance like a suit of armor. All manufacturers need general and product liability in the same way most armor comes with a breastplate and a helmet (everyone has a heart and a brain to protect). Here’s why these two coverages are a manufacturer’s base requirement for safe operations.
General Liability Insurance
General liability covers physical injuries, property damage, and advertising mistakes that harm others due to your day-to-day operations. It helps if someone slips during a plant visit, your equipment damages a client’s property, or a competitor claims your marketing crossed a line.
There’s a reason most manufacturing contracts require it. General liability is your safety net for the normal legal risks of running a business and interacting with clients. Just about every responsible business, manufacturing or otherwise, has it because just about every business needs it.
Product Liability Insurance
Product liability covers claims from injuries or property damage caused by products you make, assemble, or import. Whether it’s a packaging defect, faulty component, or labeling error, this coverage helps pay for costs like legal fees, medical bills, and settlements.
Most retailers, distributors, and marketplaces (like Amazon) require product liability insurance before they’ll list or sell your goods. If general liability is protection for running a business, think of product liability as protection specifically for the products you make or import.
Customizing With Add-Ons & Optional Coverages
Add-on coverages guard your business against less common, but costly, risks that some manufacturers face, but others don’t. Things like downtime, recalls, and missed contracts don’t just hurt production, they cost margin. The right coverage helps protect both in the situations that apply to you.
Here’s the bottom line: not every manufacturer needs every coverage. Policies that include every possible add-on are the reason some manufacturing insurance gets so expensive. Instead, we keep many protections optional to let you customize your policy with what you need (without extras you don’t). Here’s what’s available and who might want it.
Product Protection & Continuity
- Product Recall Insurance: Helps cover expenses if a batch defect or contamination forces a recall. It includes communication, shipping, and disposal costs, so you can respond quickly and protect your brand’s reputation.
- Errors & Omissions (E&O) Insurance: Also called professional liability, this protection covers professional and design mistakes that cause someone else a financial loss. It’s especially important if you provide custom components or formulations.
- Commercial Property Insurance: Protects buildings, tools, and inventory you own from damage caused by fire, theft, or other events covered by your policy. This is for property that never leaves (or can’t leave) your base of operations.
- Inland Marine Insurance: Covers materials, tools, or goods in transit or at off-site job locations. This is for property that moves around, including raw materials and mobile equipment.
Workforce & Operations Protection
- Workers Compensation Insurance: Covers employee injuries or illnesses that happen on the job. This helps you stay compliant with state laws (most states require it for employers) and care for your team.
- Commercial Auto Insurance: Covers company vehicles you own for injuries, damage, and risks of the road when they’re used for work (for example, on deliveries, supplier visits, or transport between facilities).
- Hired/Non-Owned Auto Insurance: Covers vehicles you don’t own but that are used by your employees for your business (for example, employees using their own cars or rented vehicles for deliveries).
Data & Contract Protection
- Cyber Liability Insurance: Helps protect your business if a data breach, ransomware, or other cyberattack disrupts operations. It can cover investigation, recovery, notification, and other legal costs. If you collect or store client data, you may be legally responsible for keeping it safe from hackers, so this coverage is crucial for many manufacturers.
- Commercial Surety Bonds: Pays back a client if your employee steals from them. Some clients or government contracts may require these. (If you need a bond, it should be clearly requested in your contract.)
Endorsements for Contract Compliance
- Amendment of Coverage Territory (Worldwide Coverage): Extends your protection overseas to products sold internationally
- Primary and Non-Contributory Endorsement: Ensures your policy responds first to a covered claim when required by contract
- Waiver of Subrogation: Prevents your insurer from seeking recovery from your client after paying a claim
- 30-Day Cancellation Notice: Alerts business partners if your coverage changes or ends
- Additional Insureds: Adds people or companies you do business with for coverage under your policy if they’re named in a lawsuit due to your actions
In a nutshell: Endorsements and add-ons modify your coverage, how it applies, and who gets it. Some may be very important for your product, others not so much. They can also add specific wording to your policy to meet contract standards, which can save you from legal and audit headaches later.
Coverage Snapshot: Which Coverages Do I Need in My Industry?
Different products and industries create different manufacturing risks (and therefore need different kinds of coverage). For example, a food producer faces contamination risks that a metal fabricator doesn’t, while a cosmetic lab has to consider labeling and ingredient safety.
This quick reference chart shows how manufacturers in different industries can modify the same core coverage with add-ons to fit their operations.
| Manufacturing Type | Core Coverages | Most Popular Add-Ons |
|---|---|---|
|
Food & Beverage |
General Liability Product Liability |
Product Recall Inland Marine Workers Comp |
|
Cosmetics & Skincare
|
General Liability Product Liability |
Errors & Omissions Cyber Liability Product Recall |
|
Wellness Supplements |
General Liability Product Liability |
Product Recall |
|
Metalwork & Fabrication
|
General Liability Product Liability |
Commercial Property Inland Marine 30-Day Cancellation Notice |
|
Electronics & Components
|
General Liability Product Liability |
Errors & Omissions |
|
Plastics & Packaging
|
General Liability Product Liability |
Inland Marine Waiver of Subrogation |
|
Textiles & Apparel
|
General Liability Product Liability |
Workers Compensation Commercial Property Primary & Non-Contributory |
Pro Tip: The coverages listed above are the most likely to fit a business in your industry, so they make a good starting point. To decide what you need:
- Start with your contracts and identify what’s required.
- Think about the risks associated with your production process, materials, and distribution model.
- Match them to the add-ons that cover each risk.
Need help? Insurance Canopy’s licensed customer service agents can match you with exactly what you need.
Food & Beverage
Core Coverages
General Liability
Product Liability
Most Popular Add-Ons
Product Recall
Inland Marine
Workers Comp
Cosmetics & Skincare
Core Coverages
General Liability
Product Liability
Most Popular Add-Ons
Errors & Omissions
Cyber Liability
Product Recall
Wellness Supplements
Core Coverages
General Liability
Product Liability
Most Popular Add-Ons
Product Recall
Errors & Omissions
Cyber Liability
Metalwork & Fabrication
Core Coverage
General Liability
Product Liability
Most Popular Add-Ons
Commercial Property
Inland Marine
30-Day Cancellation Notice
Electronics & Components
Core Coverages
General Liability
Product Liability
Most Popular Add-Ons
Errors & Omissions
Cyber Liability
Worldwide Coverage
Plastics & Packaging
Core Coverages
General Liability
Product Liability
Most Popular Add-Ons
Inland Marine
Waiver of Subrogation
Textiles & Apparel
Core Coverages
General Liability
Product Liability
Most Popular Add-Ons
Workers Compensation
Commercial Property
Primary & Non-Contributory
How Much Coverage Is Enough?
Insurance Canopy manufacturing business insurance starts with $1 million of per occurrence coverage and a $2 million aggregate limit. That’s the industry standard that meets most contract and retailer requirements for small to mid-size manufacturers.
But one size doesn’t fit all when it comes to insurance for manufacturers. Just like your coverages, add-ons, and endorsements, your limits should match your needs.
The right limits for you are based on your operation’s scale, contract size, and growth plans. If you’re starting to take on new distribution channels, expanding production, or signing larger vendor agreements, it might be time for higher limits.
Small Manufacturer
Typical Limits
$1M per occurrence / $2M aggregate
Fits You If
You sell locally or through a few retailers.
Mid-Size Manufacturer
Typical Limits
$2M per occurrence / $4M aggregate
Fits You If
You distribute regionally, sell online, or work with multiple partners; a contract requires specific limits or language
Large Manufacturer/OEM Supplier
Typical Limits
$2M per occurrence / $4M aggregate + endorsements or umbrella coverage
Fits You If
You supply national brands, export products, or fulfill OEM/private-label contracts; contracts require proof of extended coverage
| Business Size | Typical Limits | Fits You If |
|---|---|---|
|
Small Manufacturer |
$1M per occurrence / $2M aggregate |
You sell locally or through a few retailers. |
|
Mid-Size Manufacturer
|
$2M per occurrence / $4M aggregate |
You distribute regionally, sell online, or work with multiple partners; a contract requires specific limits or language |
|
Large Manufacturer / OEM Supplier |
$2M per occurrence / $4M aggregate + endorsements or umbrella coverage |
You supply national brands, |
Coverage isn’t about buying more, it’s about buying smart. Our goal is to help manufacturers stay compliant without paying for coverage they don’t need. Insurance Canopy offers the limits and add-ons you need now and makes it easy to upgrade your policy as your business grows.
How to Prove Coverage: Get a COI in 4 Steps
Once your manufacturing liability policy is active, you’ll need to show proof of coverage to clients, distributors, or retailers before you can start a contract. That proof comes from a Certificate of Insurance (COI) — a summary that verifies your active policy, coverage limits, and any required endorsements.
Insurance Canopy makes it easy to get compliant COIs whenever you need them. Here’s how.
1. Gather your details
Have your business name, policy number, and contract requirements ready. Know what your client expects for a minimum limit and endorsements to save yourself time and get the right info on your COI the first time.
2. Check whether your client needs to be an additional insured
Many contracts require you to add a retailer, distributor, or OEM as an additional insured. You can add additional insureds to your policy at any time through your user dashboard.
Go to “Download Documents” and select “Proof of Insurance” to download your COI. Make sure to add any necessary endorsements before downloading your COI to ensure it includes all of the important
4. Send your COI before deadlines
Submit your COI to your client or retailer before onboarding or renewal deadlines. Most manufacturers can get an Insurance Canopy COI within 24 hours of applying for coverage.
Haven’t bought a policy yet?
Buy your manufacturing liability insurance through Insurance Canopy first and include any add-ons you need in your application. We’ll email you a copy of your COI, usually within a day, or you can update or download it anytime through your user dashboard.
Quick Wins to Lower Your Risks
Insurance for manufacturers protects you when things go wrong. Risk management limits the chance that they ever will. A few easy, proactive steps can reduce your chances of a claim or make the claim process go more smoothly if you do have an accident.
These habits build trust with your clients, keep operations flowing, and show that you run a safe, quality-focused business:
1. Keep written quality controls
Document every process that affects your product’s safety or performance, from ingredient sourcing to final inspection. Written quality control and batch traceability make it easier to spot issues early and support your defense during a claim.
2. Maintain vendor and supplier agreements
Require vendors to carry their own liability coverage and list your business as an additional insured when appropriate. Clear contracts prevent disputes and ensure everybody shares responsibility if something goes wrong.
3. Review labels, warnings, and instructions for accuracy
Update warnings and instructions any time your process or materials change. Even small edits protect your customers and your reputation.
4. Log and review incidents
Keep an internal record of product issues, near misses, and customer complaints. Regularly reviewing that data helps you spot trends, improve quality, and demonstrate due diligence to insurers or auditors.
5. Reassess coverage before growth spurts
If you’re scaling production, entering a new market, or taking on a major contract, check your coverage limits before you expand. Insurance Canopy’s licensed customer support agents can help you update your policy to keep pace with your business.
Small, consistent improvements go a long way. Every process you refine and every record you keep strengthens your business and helps you run your production line responsibly.
Keep Growing & Making Confidently
The right insurance helps you protect the work, relationships, and reputation you’ve built. Start strong and stay that way by customizing your policy as you grow. Get a quote from Insurance Canopy today for coverage that’s ready for whatever’s next.
Coverage Built for the Way You Work
FAQs About Manufacturers Insurance
What’s the difference between product liability and manufacturers E&O?
Product liability covers injuries or property damage caused by a defective product. For manufacturers, errors & omissions insurance (E&O) covers financial losses your clients suffer because of your mistake in design, specs, or process (even if nothing is physically hurt or damaged).
Do we need recall coverage?
If your products could be recalled because of contamination, labeling errors, or defects, recall coverage is worth adding. It helps pay for communication, shipping, and disposal costs so you can fix issues quickly without derailing production or damaging your reputation.
Do importers need product liability insurance?
Yes, importers and private-label brands can be held liable for defects or damages under U.S. product laws, even if goods are made overseas. That means importers often need the same level of product liability protection as a manufacturer.
Read more about common product business struggles like this one and how to get insurance that classifies your business and risks correctly.
How do I add a retailer as an additional insured?
You can request a Certificate of Insurance (COI) listing your retailer, distributor, or OEM as an additional insured through your Insurance Canopy user dashboard. Make sure to include any other required endorsements (like a waiver of subrogation or primary and non-contributory endorsement) when you update your COI.
