Factory Insurance - Factory Insurance or Traders Combined Insurance or Business Insurance, it will have a variety of different names, protects a companies business where there is usually an element of manufacturing involved. The insurer will need fairly detailed information from you to provide a factory insurance quote and will be particularly interested in the product that is being manufactured and its intended use.  As well as the Building itself, Fixtures & Fittings & Contents, cover can include Stock, Business Interruption and Machinery. You may also require Engineering Insurance if you have Lifting Equipment etc. The covers provided are usually Fire & Perils or All Risks; you will normally be given the option to choose. All Risks is the better cover but will cost more. 

When it comes to the Liability section of the Factory Insurance policy, the insurers will look closely at the manufactured product and its intended use as it is usual to include Products Liability cover.  The insurers will want to know if any products are exported with particular emphasis on products being exported to North America.  Full details of all Trade processes will also have to be provided so as the insurer can calculate if any are dangerous or indeed are likely to impact on employees or neighbouring business.  The sections of a Factory Insurance Policy are typically;

• Buildings - If you are responsible for insuring your Building, it should always be insured for it’s rebuilding cost. If you are unsure of it’s full rebuilding cost for insurance purposes, you should always take professional advice.

• Contents - Under Factory Insurance, General Contents would include Office equipment etc, your insurers may want to know the value of any Computer Equipment as this usually falls under the definition of target contents for rating purposes.

• Stock - When calculating your Stock Sum Insured, you should insure for the cost of replacement of all items without including any element of profit.
  Sometimes Theft cover is arranged as a separate peril to the usual perils for the above covers, always check to make sure it is included.

• Business Interruption - this is a very important section of a Factory Insurance policy, if you have a Fire or a Flood at your premises, your business could be severely disrupted, which may lead to a reduction in your profits and additional expenses.  You may need to close down production for a while or you may be able to perhaps set up on a temporally basis elsewhere. This section of the policy can sometimes include a “ suppliers” extension and you should consider how a catastrophe at a supplier would impact on your business particularly if you have received most of your goods or raw materials from one source.  This section of the policy will usually cover your loss of Gross Profit & any additional working expenses.  Although most insurance policies are for a twelve months period, you can select cover under this section for up to 36 months. Always consider how long you think it will take to get your business up and running again.

• Money - This is usually insured on an All Risks basis and will included cash, cheques, bank notes and other documents as well. The insurer will want to know what precautions you have against Theft and will probably want you to install a safe. If you carry more than a certain amount to the bank at any one time, they will want to know about the number of person escorting the money. It is usual that Personal Assault cover can be added to this section of the policy.

• Public Liability - This usually provides you with cover against insurance claims for sums that you would be legally liable for from any person excluding your employees.

• Products Liability - This is an extension of the Public Liability section of the policy and protects you against Legal Liability claims as a result of any product you manufacture being faulty or defective and causing injury or loss to any person or business.

• Employers Liability - This type of Insurance is compulsory for any company with employees, you need to display a certificate and retain expired certificates for a period of 40 years. This insurance protects employers for claims from employees who become injured as a result of their work, the cover will include, employee to employee cover.

• Legal Expenses - Business Legal Expenses cover is being seen as more and more important, a variety of covers are available, please refer to our section on Business Legal Expenses.

• Engineering Insurance - Certain types of plant have a statutory requirement to be inspected on a regular basis. In a factory, you may have a fork lift truck or other lifting equipment. The insurer will usually provide the inspection service to which they will add VAT and may provide optional insurance cover if you require it.

• Good in Transit - This section of the policy covers loss or damage to your Goods whilst being transported in a company vehicle. If you use a haulage firm to transport your goods, you should discuss insurance with them. This type of cover can be extended to include items sent by courier.

Other sections that can be added to this cover include Book Debts, Fidelity Guarantee and Credit Insurance

To provide you with an accurate quotation, expect the insurer or broker to ask you fairly extensive questions, this is a fairly complicated type of insurance and one where you will really need professional help. It is vital that the broker or insurer fully understands the nature of your business and all of your trade processes in order that they can make sure that you are insured accurately.