Industry Guide
Commercial Insurance for Manufacturing Companies
Manufacturing accounts are among the most complex and highest-premium commercial insurance risks in the P&C market. They combine significant workers compensation exposure from machinery operations and repetitive motion, large property values anchored by expensive production equipment, and products liability exposure for the goods they sell or incorporate into other products. A manufacturing submission done correctly requires detailed, accurate underwriting information across multiple lines — and getting it wrong creates audit liabilities, coverage gaps, and client disputes at claim time.
Coverage manufacturers typically need
Commercial General Liability (with Products)Manufacturers need the products-completed operations portion of their CGL rated carefully. A product defect claim — particularly for items used in food, automotive, medical, or construction applications — can produce catastrophic losses far exceeding the GL base limit.
Workers' CompensationManufacturing has some of the highest WC injury rates of any commercial sector. Payroll must be broken out by class code — machine operators, assemblers, material handlers, and clerical staff all carry significantly different rate factors.
Commercial PropertyFactory buildings, production equipment, raw materials inventory, and finished goods inventory are all significant property exposures. Equipment breakdown (boiler and machinery) coverage is essential — a single failed press or CNC machine can halt production for weeks.
Commercial AutoForklifts used on public roads, delivery trucks transporting finished goods, and vehicles used by sales representatives all require commercial auto coverage. Hired and non-owned auto should be confirmed as well.
Commercial UmbrellaGiven the severity potential of products liability claims — especially for manufacturers whose products are incorporated into third-party products — umbrella limits of $5M to $25M are common for manufacturing accounts.
Inland Marine / Equipment FloaterCovers production equipment, molds, dies, tooling, and specialty machinery while in transit or at off-site locations including contract manufacturers or repair facilities.
Risks unique to manufacturing operations
Products liability is the defining risk for most manufacturers. When a product causes injury, property damage, or economic loss — whether through a design defect, a manufacturing defect, or inadequate warnings — the manufacturer bears primary liability. The severity potential is enormous: a single defective component incorporated into thousands of vehicles, appliances, or medical devices can produce a multi-claimant event with losses in the tens of millions. Standard GL policies include products-completed operations coverage, but limit adequacy and the specificity of the products description are both critical to ensuring coverage applies when it matters most.
Equipment breakdown and production interruption is a risk unique to manufacturing that property underwriters often overlook. A single failed hydraulic press, industrial boiler, or CNC machine can halt an entire production line. Equipment breakdown coverage (sometimes called boiler and machinery or mechanical breakdown) is separate from the commercial property policy and covers the cost to repair or replace mechanical and electrical systems that fail due to internal causes — not just insured perils like fire or storm. For manufacturers with mission-critical equipment, equipment breakdown should be considered mandatory.
Environmental and pollution liability is a growing concern for manufacturers that use chemicals, solvents, adhesives, coatings, or produce waste byproducts. Standard CGL policies contain an absolute pollution exclusion that can eliminate coverage for contamination claims arising from manufacturing operations. Manufacturers that store chemicals on-site, discharge treated wastewater, or handle regulated waste streams should be evaluated for a separate pollution liability policy — particularly if they are near residential areas or waterways where third-party contamination claims are more likely.
Supply chain and contingent business income exposure is increasingly relevant for manufacturers that depend on a limited number of suppliers for critical raw materials or components. A fire at a sole-source supplier, or a customs disruption affecting imported inputs, can halt production even when the manufacturer's own facility is undamaged. Contingent business interruption coverage addresses this exposure and should be discussed with any manufacturer that relies on a single source for key materials.
ACORD forms for manufacturing submissions
Manufacturing submissions to admitted and E&S markets typically require five ACORD forms. The quality of the products description on the ACORD 126 is the single most important factor in determining whether underwriters engage seriously or decline to quote. Specificity matters enormously.
ACORD 125Commercial Insurance Application
Required for every manufacturing submission. Captures entity structure, ownership, locations, nature of operations, prior loss history, and SIC code. The operations description must be specific — "plastic injection molded components for automotive OEMs" is better than "plastic manufacturer."
ACORD 126Commercial General Liability Section
Captures GL and products-completed operations (PCO) classification codes, annual gross sales, payroll, and the products description. The PCO exposure section is critical — underwriters need to know specifically what is manufactured, who buys it, and what it is used for.
ACORD 127Commercial Auto Section
Required when including commercial auto. Captures the vehicle schedule, driver roster, use of vehicles (delivery, service, sales), and whether hired and non-owned vehicles are used. Manufacturers with delivery fleets need this completed accurately.
ACORD 130Workers Compensation Application
Required for WC. Payroll must be broken down by NCCI class code — this is especially important for manufacturers where machine operators (e.g., 3400-series codes) carry substantially higher rates than clerical or warehouse employees.
ACORD 140Property Section
Captures building value, business personal property (BPP), equipment and machinery values, raw materials, and finished goods inventory. Equipment breakdown coverage is added here. Business income / extra expense limits need to reflect the potential shutdown time if key equipment fails.
Key underwriting questions for manufacturers
→What specifically is manufactured — describe the product, materials used, and the manufacturing process
→Annual gross sales, separated into finished goods vs. raw materials vs. contract manufacturing services
→Percentage of sales from domestic markets vs. exported internationally, and top countries of export
→Whether any products are sold to other manufacturers for incorporation into their products (component part exposure)
→What end-use industries purchase the products — food, automotive, medical/pharma, construction, consumer goods
→Total payroll by NCCI class code — machine operators, assemblers, material handlers, warehouse, drivers, clerical
→Equipment replacement cost value — documented per machine or as a total schedule if multiple locations
→Whether any hazardous materials are used, stored, or produced as byproducts (environmental/pollution exposure)
→Prior products liability claims in the past 5 years — claim type, cause, and amount paid or reserved
→Whether ISO 9001, AS9100, IATF 16949, or other quality management certifications are held
→Any product recalls in the past 5 years — voluntary or regulatory, and whether recall expense coverage exists
→Distribution channels — direct to end user, through distributors, through wholesalers, via retail channels
→Whether the company designed the product or is contract manufacturing to a client-supplied design
→Presence and specifications of any molds, dies, tooling, or unique equipment owned by the manufacturer
→Whether any production occurs at subcontractors or contract manufacturers, and how quality is controlled there
→Total square footage of manufacturing floor, warehouse, and office space across all locations
→Sprinkler systems, fire suppression, and alarm systems in the facility — type and coverage area
→Business continuity plan — could production move to another facility if the primary plant were destroyed
Common submission mistakes for manufacturing accounts
Undervaluing production equipment and machinery
Manufacturing equipment is routinely underinsured because owners report depreciated book value rather than replacement cost. A CNC machining center with a book value of $40,000 may cost $180,000 to replace new. Equipment breakdown coverage is also frequently omitted — yet a single failed transformer, compressor, or production press can halt all manufacturing for weeks, producing enormous business income losses in addition to the repair cost.
Omitting or underestimating products-completed operations exposure
Many manufacturing submissions are completed with minimal detail on the products section of the ACORD 126. Underwriters need to know what is made, what it is made of, who buys it, and what it is used for. A manufacturer of metal brackets sells to the construction industry — very different from one that sells to the aerospace industry. When PCO exposure is inadequately described, underwriters either decline or quote with restrictive exclusions. Products claims in manufacturing are frequently severe and can involve multiple claimants.
Misclassifying payroll by workers comp class code
WC payroll allocation errors are common on manufacturing submissions. Machine operators working with stamping presses, lathes, or conveyor systems carry much higher WC rates than assemblers or warehouse workers — and both are far higher than clerical. When all payroll is lumped under a single class code, the insured is either overpaying (if clerical is rated at machine-operator rates) or has a significant audit liability at year-end. Accurate classification requires identifying each employee's actual job duties.
Not disclosing international sales or exports
Many domestic manufacturers also export products — directly or through distributors — without disclosing this on the GL application. International exposure creates products liability claims under different legal systems, often without the benefit of U.S. litigation procedural protections. Many standard CGL policies limit or exclude coverage for claims arising outside the U.S. and Canada. Failure to disclose export revenue can void coverage for a products claim originating overseas.
Failing to address raw materials and finished goods inventory separately
A manufacturer holds both raw materials (purchased inputs) and finished goods (completed products awaiting shipment) at any given time. These have different values, different spoilage characteristics, and different vulnerability profiles. Submitting a single "inventory" BPP value without separating the two prevents accurate valuation and makes it difficult to confirm whether stock throughput or inland marine coverage is also needed for goods in transit.
How AgencyAssist helps
Manufacturing accounts require information across GL with products, WC, commercial property, commercial auto, and often umbrella — all with their own ACORD forms and distinct underwriting questions. AgencyAssist collects all required information through a single structured client intake link and maps the responses to the completed ACORD 125, 126, 127, 130, and 140 simultaneously. Products descriptions, payroll breakdowns by class code, equipment schedules, and prior loss summaries are all captured and formatted for submission. The complete package is generated automatically and is ready to send to multiple carrier markets.
Complete manufacturing submissions in one workflow
One intake link. All required ACORD forms generated automatically.