How much does manufacturing insurance cost?

Manufacturers pay an average of $50 per month, or $600 per year, for general liability insurance.

This policy provides financial protection for third-party bodily injuries and property damage, along with advertising injuries. It'll cover your legal costs if a client slips in a puddle in your factory and suffers a concussion, or breaks their smartphone in the fall.

General liability insurance usually includes product liability insurance, which covers lawsuits related to your products. For instance, a customer could have an allergic reaction to an undisclosed ingredient in a food product, or a defective sink fixture could leak and damage a customer's floor.

This is the average general liability insurance policy for manufacturers who buy from Insureon:

Insurance premium: $50 per month
Policy limits: $1 million per occurrence; $2 million aggregate

The per-occurrence limit is the maximum your insurer will pay for a single incident, while the aggregate limit is the maximum your insurer will pay on any insurance claims during your policy period, typically one year.

Among manufacturers that purchase general liability with Insureon, 50% pay less than $50 per month and 33% pay between $50 and $100.

General liability insurance costs depend on your risk of a customer lawsuit, which increases with the amount of foot traffic at your office or factory.

When this policy includes product liability insurance, high-risk products—such as cannabis or pharmaceuticals—can drive up costs as well. Other businesses you contract with, such as wholesalers and distributors, may ask you to carry a certain amount of this coverage to mitigate their own risks.

Other factors can also affect your insurance rates, such as the size of your business, your claims history, and any endorsements you might add, such as an additional insured.

Policy limits determine how much your insurer will pay on covered claims. These amounts are flexible, though suppliers and vendors might require you to carry a specific amount of coverage.

Most manufacturers (87%) choose general liability policies with a $1 million per-occurrence limit and a $2 million aggregate limit. As your small business grows, you may need to expand your policy limits.

As with other types of business insurance, you can opt for a higher deductible or lower coverage limits to save money on your policy.

The average cost of a business owner’s policy for manufacturers is $126 per month, or $1,517 per year.

A business owner's policy, or BOP, bundles general liability coverage with commercial property coverage to cover both third-party risks and your business property. It typically costs less than purchasing each policy separately.

A BOP protects against customer injuries and property damage, along with damage to your office, facility, and inventory. Because of its increased coverage and affordability, it’s the policy most often recommended by Insureon’s agents.

This is the average BOP for manufacturing businesses that buy from Insureon:

Insurance premium: $126 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500

Small, low-risk businesses are often eligible for a business owner's policy. You can customize your policy by adding endorsements, though they will increase the cost.

For instance, you may want to add business interruption insurance in case a natural disaster, vandalism, or other covered property claim causes a disruption that forces you to temporarily close your business, or equipment breakdown coverage to cover replacement costs if critical machinery malfunctions unexpectedly.

Among manufacturing companies that purchase a business owner’s policy with Insureon, 41% pay less than $100 per month and 28% pay between $100 and $200 per month.

Insurance costs for factories increase with the size of the building and the value of your inventory. Your industry risks, years in operation, the building's condition, and your claims history will also affect your premium.

Because it includes both policies, the risk factors that affect both general liability costs and commercial property insurance costs affect your business owner's policy premium. Other factors include your business's location, the number of employees you have, and your business operations.

For manufacturing companies, workers’ compensation insurance costs an average of $154 per month, or $1,852 per year.

This type of insurance covers medical expenses when an employee is injured on the job. It also provides disability benefits while they're recovering and unable to work.

To comply with your state’s requirements and avoid penalties, manufacturers typically must purchase this coverage for their employees. It's also recommended for sole proprietors, as health insurance plans can deny claims for medical bills that are related to your job.

Most workers' comp policies include employer's liability insurance, which covers the cost of lawsuits related to employee injuries. There's usually no limit to how much a workers' comp policy can pay for employee benefits, though it depends on state laws.

Among manufacturers that purchase workers’ comp insurance with Insureon, 33% pay less than $100 per month and 24% pay between $100 and $200 per month.

The cost of workers' compensation depends on the number of employees at your business and the type of work they do, among other factors. A larger workforce brings a higher rate of worker injuries, which is why bigger businesses tend to pay higher premiums.

Factory workers and office workers are assigned different class codes used to determine premiums. It'll cost more to insure a factory worker who works with chemicals all day, giving them a higher risk of physical injury, than a clerk who works at a desk.

It's important to classify your employees correctly to make sure you're paying the correct rate. You can save money on workers' compensation coverage by comparing rates from different insurance companies and focusing on workplace safety, among other strategies.

Manufacturers pay an average of $254 per month, or $3,042 annually, for commercial auto insurance.

Most states require this coverage for vehicles owned by a business. For personal, rented, and leased vehicles used by your business, look to hired and non-owned auto insurance (HNOA) instead.

A commercial auto policy provides financial protection in the event of an accident involving your delivery truck or other business vehicle. It can help pay for property damage, medical costs, and legal expenses.

The cost of commercial auto insurance depends on several factors, including your policy limits, the coverage options you choose, the value of the vehicles, where they are driven, and the driving records of anyone permitted to drive.

Learn more about how small business owners can save money on commercial auto insurance coverage.

Manufacturing businesses pay an average of $102 per month, or $1,224 annually, for commercial umbrella insurance or excess liability insurance.

This policy boosts the protection of your general liability insurance, commercial auto insurance, and employer's liability insurance. When a claim exceeds the limits of the underlying policy, umbrella insurance activates to provide coverage.

Manufacturers may need this type of insurance if a landlord, distributor, or wholesaler requires liability coverage in excess of $2 million. You must have a certain amount of underlying coverage before you can purchase umbrella insurance.

For example, a wholesaler might require you to have $3 million in general liability coverage before they'll sign a contract with your business. In that case, you could carry $2 million in general liability insurance along with a $1 million umbrella policy.

Umbrella insurance is usually available in $1 million increments. The amount of coverage you buy is one of the biggest factors that determine how much umbrella insurance costs.

Small businesses, including manufacturers, pay an average premium of $145 per month, or $1,740 annually, for cyber insurance. You might also see this policy called cyber liability insurance or cybersecurity insurance.

Cyber insurance can help your business recover financially after a data breach or cyberattack. It can help pay for customer notification costs, fraud monitoring services, and other costs necessitated by state data breach laws.

The cost of cyber insurance depends on the amount of personal information handled by your manufacturing business, such as customer credit card numbers, along with the number of employees who can access that information.