Why Manufacturers Need Tailored Insurance to Stay Protected and Compliant
The manufacturing industry plays a vital role in Australia’s economy, supplying essential goods across sectors from food and beverage to industrial equipment. But while the sector is known for its productivity and precision, it's also exposed to a wide range of risks that can disrupt operations, impact cash flow, and even lead to legal consequences.
Off-the-shelf insurance policies often fall short when it comes to protecting manufacturing businesses. With complex processes, expensive machinery, and strict compliance requirements, manufacturers need cover that’s built around the specific way they operate.
Here’s why tailored insurance is essential for manufacturing businesses, and the key covers to consider.
Key Risks Facing Manufacturing Businesses
Every manufacturing business is different, but some common risks include:
Operational disruption, such as machinery breakdown, fire, or storm damage
Workplace injuries in environments with heavy equipment or manual handling
Third-party liability, especially for product faults or accidents on site
Supply chain delays that impact delivery obligations
Cybersecurity threats, as more manufacturers adopt digital systems, automation, and online platforms
Even one of these events can result in unexpected costs, missed deadlines, and reputational damage.
Why Tailored Insurance Matters in Manufacturing
Manufacturing is not a one-size-fits-all industry. Insurance policies that work for a standard office or retail business often won’t offer the right protection for a production facility.
Whether you manage a small local operation or a growing business with national contracts, your insurance needs to reflect the way you work, from machinery and raw materials, to compliance obligations and workforce risks.
Types of Insurance Manufacturing Businesses Should Consider
1. Public and Products Liability Insurance
This cover protects your business if someone is injured or their property is damaged due to your operations or products. You may be held liable, even if the fault was due to a third-party supplier. Legal costs of defending such actions will also be covered. The policy can also be extended to include third party financial loss claims arising out of Errors or Omissions related to your products, as well as Product Recall Expenses.
2. Workers’ Compensation Insurance
Manufacturing sites have a higher risk of injury than many other industries. Workers’ compensation is a legal requirement, and it’s crucial to have the right cover in place to protect both your employees and your business in the event of a workplace injury.
3. Cyber Liability Insurance
As more manufacturers use connected systems, smart machinery, and cloud-based platforms, cyber risk is growing. A cyber attack can lead to downtime, data loss, and supply chain disruption. Cyber insurance helps cover the costs of response, recovery, and reputational repair.
4. Equipment and Machinery Breakdown Insurance
If your production line comes to a halt due to equipment failure, the cost can be substantial. Machinery breakdown insurance covers the cost of repairs or replacements, and can also include business interruption cover to protect income lost during downtime.
5. Management Liability Insurance
This cover protects business owners and directors from legal claims related to management decisions. It can include cover for employment disputes, breaches of workplace health and safety regulations, and claims made by regulators or shareholders. Legal costs of defending such actions will also be covered.
Why Compliance Should Be Part of Your Risk Strategy
In manufacturing, compliance isn’t just about ticking boxes. Regulatory breaches can lead to fines, project delays, and reputational damage. Insurance alone won’t prevent non-compliance, but it plays a key role in your overall risk strategy.
At AB Phillips, we work with manufacturing clients to help align their insurance coverage with their compliance obligations. This includes ensuring they meet legal requirements around workers’ compensation, product liability, and safety reporting, and that their cover keeps pace as operations grow or change.
Final Thoughts
Manufacturing businesses face a unique set of challenges that require more than standard insurance. With tailored cover, you can reduce risk, stay compliant, and protect what matters most, from your equipment and employees to your products and reputation.
If you’d like to review your current insurance or learn more about options tailored for the manufacturing industry, contact AB Phillips for a personalised quote and expert advice.