Manufacturing Insurance & Loss Control

In the complex manufacturing industry, there are common risks that require comprehensive insurance coverage. Investing in commercial insurance is a crucial step in ensuring the longevity of your business operations, but there are also proactive steps you can take to prevent loss. For example, a strong loss prevention program within your manufacturing facility can benefit your employees and the company.  

This article explores expert recommendations from Cory Eickholt, Director of Loss Control at Central Insurance, on protecting your property, assets, and employees. 

How to Protect Your Property 

Eickholt identifies potential fires and roof damage as the two most common—and dangerous—threats to a manufacturing building. Here, we outline some fire safety tips and provide steps to protect your commercial building’s roof from damage. 

Fire Safety 

Fires are one of the greatest hazards a manufacturing facility can face. Below, we break down some fire safety information that manufacturers need to know.  

Common Causes of Fires in Manufacturing Facilities 

Electrical panels are some of the most common fire hazards in manufacturing facilities. Electrical distribution and lighting equipment were the leading cause of structure fires in industrial properties, while heating was the primary cause of fires in manufacturing facilities.  

To prevent fires from these systems, ensure your electrical panels are regularly assessed, and consider installing monitoring panels with infrared thermal imaging cameras to identify hot spots.  

The Importance of Maintaining & Assessing Fire Protection Systems  

Sprinklers should be able to handle the structure and occupancy they are protecting. When it comes to manufacturers, sometimes sprinklers aren’t enough. Fire suppression systems can provide specialized protection for things like paint or powder coating that is highly flammable.  

“A lot of times, especially if we’re dealing with paint, flash fires are very much a hazard that needs to be controlled,” Eickholt says. Flash fires occur when flammable materials ignite. These fires spread rapidly and can damage a large area in a short amount of time. Ensure your fire protection systems are equipped to extinguish this type of fire quickly. 

Other Ways to Limit the Spread of Fire 

Alongside the maintenance of your sprinkler and fire suppression systems, there are additional steps you can take to limit the risk of fire on your property. According to Eickholt, these include: 

• Make sure flammables are stored correctly  
• Provide proper ventilation in these storage areas  
• Distribute fire and smoke alarms throughout your facility 
• Dispose of soiled rags or other waste products that could increase fire load  
• Keep evacuation routes unobstructed 
• Ensure facility occupants know what to do in case of a fire emergency 

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Roof Safety 

Protecting your roof requires proactive attention to the structure. 

Be sure to clear gutters and inspect the roof regularly for potential leaks to help ensure the structural integrity of the building. 

“Roof maintenance is huge because we want to make sure everything inside the facility is properly protected,” Eickholt says. “Manufacturers can have big exposures when it comes to wind, hail, and storms, so it’s vital their roof is in top shape to withstand those elements.” 

He continues to explain that the age of the roof is a great indicator of a roof’s overall state, but other factors can indicate a repair is needed. Look for visible damage, sagging, mold, or rot. Even an increase in energy bills can signal insufficient roof insulation.  

Did You Know: The average life expectancy of a roof is 15 to 25 years.  

Roof maintenance is not merely about protecting the physical structure but also safeguarding everything within. A well-maintained roof protects against potential damage to machinery, raw materials, products, and the people inside. 

How to Protect Your Assets 

Proper maintenance of your fleet vehicles and manufacturing equipment is pivotal to risk mitigation and loss control. Prioritizing proper maintenance ensures equipment longevity and protects against unforeseen breakdowns that can impact business revenue by stalling the production process.  

Here, Eickholt outlines some of the best ways to protect the most at-risk assets in a manufacturing facility.  

Protecting Your Equipment 

Equipment maintenance involves staying current on maintenance schedules and practices to prevent equipment breakdown. Be sure to set a schedule for regular assessment of machine functionality and keep extensive documentation of evaluations and maintenance procedures for your records. 

“If there would be an incident and you had the proper maintenance records, it’s much easier for you to show your business insurance carrier that you did your due diligence to maintain the equipment,” Eickholt says. 

Fleet Safety 

From reducing Workers’ Compensation claims and vehicle maintenance to exonerating operators and lowering your insurance premiums, integrating fleet safety controls is a crucial step for manufacturers.  

Here, we break down some of the most basic fleet safety procedures that will protect your vehicles, your products, and your drivers: 

1. Integrate Basic Driver Safety Training: Ensure drivers are equipped with fundamental safety practices, emphasizing defensive driving techniques. 
2. Leverage Video Safety: Use dash cams and other telematics to capture real-time footage, aiding in dispute resolution and liability assessment. Dash cam technologies can monitor speed, seat belt usage, and overall vehicle handling to ensure drivers are up to standard. 
3. Provide Distracted Driver Courses: Offer specialized courses addressing the perils of distracted driving, promoting heightened awareness among employees. 

Did You Know: Drivers spend an average of 1:38 minutes on their phones per hour. 

4. Identify Indicators of a Good Driver: Look for attributes such as a clean driving record, adherence to safety protocols, up-to-date documentation, and a commitment to ongoing training. 
5. Regular Vehicle Maintenance: Conduct regular inspections, including tire checks, brake system evaluations, and routine servicing to prevent breakdowns and keep your drivers safe. 

Technology is a valuable ally when enhancing your business’s risk management. Utilizing tools like Central’s risk management platform provides manufacturing and construction businesses with a toolkit of resources such as safety videos, blogs, and bulletins. 

How to Protect Your Employees 

Protecting your physical structures and equipment is important, but a desire to protect employees should be at the heart of all loss control for manufacturing companies. 

This aspect of loss control is so crucial that insurers considering writing Workers’ Compensation coverage with a manufacturer will often evaluate their workers’ safety practices, ensuring the company is taking the necessary steps to protect their people.  

According to Eickholt, two of the most common aspects of worker safety a loss control representative might evaluate include: 

• Comprehensive training programs, which provide in-depth onboarding and training designed to reduce early accidents among new hires. 
• Proper personal protective equipment (PPE), including protective wearables like eyewear or foot protection, and optimized workstation ergonomics. Using PPEs is not only compliant with safety regulations, but it also fosters an environment where employee well-being is prioritized at every level. 

Employee Training 

Training on equipment usage and safety is non-negotiable. Beyond enhancing operational efficiency, it’sa proactive measure to minimize potential risks and accidents on the job. 

Documentation of employee training history becomes an equally crucial asset, as these records outline your commitment to safety and serve as a valuable resource in potential liability scenarios. 

For Example: If you have an employee operating a loader on a site, you should ask yourself: Have they gone through the proper training? How long were they trained? Were they trained with someone who’s experienced? Has this training been thoroughly documented? Insurers look at things like this when determining any red flags associated with the equipment or its operations when determining fault. 

Machine guards are considered the first line of defense against equipment hazards. These guards might include the implementation of engineering controls such as light curtains and proper guarding mechanisms that can prevent unwanted contact with machinery. 

With thorough training, these guards keep workers safe even in the face of a slip-up. Pre- and post-inspections of equipment and their guards can pinpoint issues before they become a problem during operation. 

Learn More About Loss Control with Central 

Follow these expert tips from Central to protect your employees, facility, and products. For more advice on how to protect and insure your business, explore our other helpful blogs.