Insurance for manufacturers 

Manufacturing is an important part of the New Zealand economy contributing significantly both to local communities and to nationwide economic output. 

For manufacturing businesses in New Zealand, meeting the needs of a rapidly changing and highly competitive market can be challenging. New Zealand manufacturers in the food, beverage, textile and furniture industries can face specific risks associated to assets and operations. 

Key assets in a manufacturing business might consist of machinery, equipment and premises. For small to medium sized businesses an interruption that affects key assets can be costly.

Business interruptions can be caused by accidents, damage to manufacturing equipment or premises, unexpected events like fire or floods and natural disasters. 

Call TOWER on 0800 379 372 to talk to a business specialist and get a free review of your current business insurance. Alternatively click here to request a quote.

Business Interruption Insurance

Business interruption insurance can lessen the impact of these events on the business by providing cover for certain circumstances in which normal business operations can’t continue because of damage to the business’ assets. This means that while your operations might have stopped or been slowed down, the insurance can cover losses caused by such events. 

For example;

• A specialist piece of machinery essential to the production process of a bottling plant is severely damaged by a sudden power surge. With the machine out of action it means that production can not continue. Sourcing replacement parts and repairing the machine takes several weeks, during which time the company earns no revenue yet still has overheads and bills to pay. In this situation business interruption insurance covers the loss of profits incurred by the business. 
• Manufacturing at a small clothing manufacturer is interrupted by a severe storm which damages the roof of the property. As a result the roof leaks which causes damage to the ceiling, walls and floor coverings. The property needs repairs to get it back up to working standard. During this time the company’s business interruption insurance covers the loss of profits while the repairs are made.
  

Business Assets Insurance

Business assets insurance is also important in the manufacturing industry to protect assets from physical damage caused by unforeseen events like fires, floods, earthquakes and events like theft or burglary. While business interruption insurance covers the business for loss of profit, asset insurance covers the cost to repair or replace machinery or equipment, and damage to product or stock. 

For example;

• A water pipe bursts in a warehouse containing a range of food products ready for distribution. Much of the stock is water damaged and unusable. The company’s business asset insurance covers the market value of the stock. 
• A fire is accidentally set in a rubbish bin located outside a furniture manufacturing warehouse. By the time the fire brigade arrives there is extensive damage to the building and the stock. The company’s business asset insurance covers the cost to fix the damage to the building and the market value of the stock. 

Manufacturers may also benefit from taking out liability cover. General or public liability provides cover should your business damage someone else’s property – often considered important in the manufacturing industry. If your company has employees, then you’ll also want to think about employers liability insurance. And last but not least, is statutory liability which is also worthwhile cover for manufacturers. 

Business Checklist

Find our if your current business insurance is really what you need - go through our 10 point checklist for manufacturers here >>

Call TOWER on 0800 379 372 to talk to a business specialist and get a free review of your current business insurance. Alternatively click here to request a quote.