Insurance for Manufacturers
A machine shop, a cabinet maker and a brand that builds its own goods all ship things other people rely on. We look for coverage that follows your product out the door and keeps the floor running when something breaks.
Plants, shops and brands that make their own goods
This page is written for small and mid-sized manufacturers: contract machine shops and metal fabricators, food and beverage producers, furniture and cabinet makers, apparel and textile shops, plastics molders, electronics assemblers and brands that make what they sell. Beverage makers with a tasting room have their own page, insurance for wineries and breweries, and businesses that have products made overseas should read our guide to private label and importer liability.
Underwriters begin with the product itself. What you make, what it ends up inside, who uses it, which states and countries it ships to, how much of the work is done for other companies to their drawings, and what your quality records look like. A shop that machines brackets for furniture makers and a shop that machines parts for medical devices may run the same equipment and still get very different answers.
Product liability and California’s strict liability rule
California was early to hold makers responsible without proof of carelessness. In Greenman v. Yuba Power Products, decided in 1963, the state Supreme Court held that a manufacturer is strictly liable in tort when an article it places on the market, knowing it will be used without inspection, has a defect that injures someone.
General liability ordinarily insures the products-completed operations hazard, usually with its own aggregate limit, so check that limit against the contracts your customers send. Our product liability insurance page explains when a standalone policy fits better. Retailers and distributors that sell your goods often ask to be added through the ISO vendors endorsement, CG 20 15, which extends your policy to businesses selling your products; our guide to retailer vendor insurance requirements walks through those requests.
Proposition 65 warnings
California’s Office of Environmental Health Hazard Assessment explains that Proposition 65 requires businesses to warn Californians about significant exposures to chemicals that cause cancer, birth defects or other reproductive harm, including exposures from products they buy. The Attorney General enforces it, as can district attorneys, some city attorneys and any individual acting in the public interest, and OEHHA says penalties for failing to warn can reach $2,500 per violation per day.
For a manufacturer, the practical work is knowing which listed chemicals are in your materials, coatings and packaging, and keeping supplier declarations on file. Ask how your liability program responds to a Prop 65 notice, because a demand for penalties and new labels is a different matter from a claim that someone was hurt, and the answer belongs in your file before a notice arrives.
Machines, breakdowns and lockout rules
CNC machines, presses, compressors, ovens, kilns and refrigeration carry much of a plant’s value and most of its schedule. IRMI defines equipment breakdown insurance as coverage for loss from the mechanical or electrical breakdown of nearly any type of equipment, often including the income lost and the extra expense of keeping orders moving while repairs are made. A burned-out spindle motor or a failed control board is a breakdown, not a fire, and a standard property form usually excludes it.
Machines also drive the injury side. Cal/OSHA’s Title 8 section 3314 requires employers to develop and use a written hazardous energy control procedure, commonly called lockout/tagout, whenever employees clean, repair, service, set up or adjust machinery, and section 3203 requires a written Injury and Illness Prevention Program. Underwriters ask for both, along with machine guarding and forklift records.
Raw materials, finished stock and other people’s parts
A plant’s property schedule covers more than the building. IRMI describes the standard building and personal property form as reaching buildings, business personal property and personal property of others in your care, which matters to a contract shop holding a customer’s castings or a coater holding a customer’s parts. Raw materials, work in progress, finished goods, tooling, molds and dies all need values that match today’s prices.
Finished goods raise a valuation question. IRMI explains the selling price clause, also known as a manufacturer’s selling price endorsement, which values goods ready for sale at their sale price instead of what they cost to make, so the profit on a lost order is recovered too. Our commercial property insurance page explains replacement cost, business income and the earthquake and wildfire questions California plants face.
Suppliers, customers and lost income
Business income pays for lost profit and continuing costs while your own damaged plant is repaired. A fire at someone else’s plant can stop you just as surely. IRMI describes dependent properties coverage, once called contingent business income, as paying for lost income or extra expense caused by a covered loss at the premises of an organization you depend on, such as a key supplier or customer. A shop with one source for a critical resin, alloy or circuit board should name that supplier in the application.
Goods on the road and data on the network round out the picture. Commercial auto covers your trucks, and finished goods or customer parts in transit should be scheduled so they are covered away from the plant. Ransomware that locks production scheduling or machine programs is a cyber question, and our cyber insurance page covers what a policy pays for.
Workers’ comp and payroll classes on the shop floor
The Division of Workers’ Compensation states that every California employer with even one employee must carry workers’ comp. The WCIRB assigns manufacturing payroll by what the plant makes and how. Class 3632, Machine Shops N.O.C., covers machining done on a contract or proprietary basis when no other machining, manufacturing or assembly class describes it, while screw machine products, nuts and bolts, and new automobile parts each have their own classes. Office staff who never go onto the floor are classified separately.
Your claims history adjusts the price through the experience modifier, explained in our X-Mod guide. Loss runs that show how each injury happened, and what the shop changed afterward, give an underwriter a clearer picture than the totals alone.
What manufacturer insurance costs
Published industry figures give a starting point; they are not a Mithril1 quote. A national small-business marketplace reported in 2025 that manufacturers buying through it paid median premiums of about $50 a month, or $600 a year, for general liability, $126 a month for a business owner’s policy and $154 a month for workers’ comp, and that 87% chose limits of $1 million per occurrence and $2 million aggregate. Those figures describe small operations, and plants with heavy machinery, large payrolls or products used in vehicles, aircraft or medical devices pay far more.
Workers’ comp scales with payroll. The WCIRB’s advisory pure premium rate for class 3632 is $2.600 per $100 of payroll from September 1, 2026, so a machine shop with $400,000 of shop payroll starts at about $10,400 a year, before the insurer’s own expenses and your experience modifier are applied. Product liability scales with sales and with what the product does, and property with the value of the building, machines and stock.
Your premium runs higher with products that go into vehicles, aircraft, medical devices or children’s goods, large export sales, work to customers’ designs without written specs, older wiring and dust-heavy processes, and past product or injury claims. It runs lower with written quality control and lot tracing, supplier certificates on file, sprinklers and good housekeeping, documented lockout and guarding programs and a clean loss history. Contact us with your products, sales by market, payroll by department and property values, and we will request quotes that fit.
A few useful answers
Common questions
Does general liability cover a product we make that injures someone?
Usually, through the products-completed operations coverage built into most general liability policies, with its own aggregate limit. Check that limit against your largest customer contract, and add an umbrella if the contract asks for more.
A customer wants to be named on our policy for the parts we ship. What do we ask for?
If the customer resells your goods, the vendors endorsement, CG 20 15, is the usual answer. If it uses your parts in its own products, it often wants to be named as additional insured; send us the contract clause so the endorsement matches it.
Will property insurance pay for lost production when a key machine breaks down?
Usually not. A standard property form generally excludes mechanical and electrical breakdown, and equipment breakdown coverage is built for it and often includes the income lost while the machine is repaired.
What happens to our income if our only supplier has a fire?
Dependent properties coverage, once called contingent business income, pays for income lost when a covered loss at a key supplier’s or customer’s premises stops your work. Name the supplier when you apply.
Can a small manufacturer get product liability through Mithril1?
It can, when an insurer accepts the product, its uses, your sales and your claims history. We gather those details with you and request quotes from insurers that write your kind of product.