Manufacturing Insurance for Australian Manufacturers

Broad Risk is an Australian commercial insurance broker working with manufacturers that turn over $1M to $50M, with 5 to 100 staff across one to three sites. We start by laying out your whole risk, then show you the gaps in your current cover that matter to a manufacturer. Most of our manufacturing clients have never seen their insurance program set out that way.

We're based on the Gold Coast and work with manufacturers across Queensland, New South Wales and Victoria.

Who We Insure

We work with:

• Food and beverage processors.
• Metal fabrication and engineering businesses.
• Makers of building products and structural components.
• Plastics and packaging manufacturers.
• Machinery and equipment manufacturers.
• Consumer products businesses, including supplements and ingestibles.
• Importers and private-label brands, which Australian Consumer Law can treat as the manufacturer.

A typical client turns over $1M to $50M, employs 5 to 100 people, runs one to three sites and has assets of up to about $20M.

How We Review a Manufacturer's Insurance

1. We map every exposure across the business: plant, stock, products, suppliers, transport, people and premises.
2. We lay your current policies over that map.
3. We show you where they don't meet: gaps, sub-limits, exclusions and sums insured that no longer match the business.
4. We recommend what to fix first, then take it to insurers and specialist manufacturing underwriting agencies.

The Gaps We Find Most Often

Business interruption indemnity periods

This is the most expensive mistake we see in manufacturing insurance. A business interruption policy with a 12-month indemnity period stops paying after a year, but specialist plant can take 18 months to replace and recommission. For specialist plants, 24 to 36 months is usually the right period, depending on your equipment and suppliers.

Product recall is separate from products liability

Many manufacturers assume their products liability policy will pay for a recall. It doesn't. Products liability responds to injury or damage caused by a product. Recall costs need their own cover. The exposure most manufacturers haven't heard of is contingent recall, where a supplier's component is recalled and takes your product with it.

Importers and private labels carry the manufacturer's liability

If you import products or sell them under your own brand, Australian Consumer Law can treat you as the manufacturer. That means you can carry the liability for products you never made.

Machinery breakdown isn't automatic

Sudden mechanical or electrical breakdown usually isn't covered by a standard property or industrial special risks (ISR) policy. Machinery breakdown cover needs to be added as a section or taken out as a separate policy, depending on the insurer.

Plant values that haven't moved since purchase

If your machinery is insured at what you paid for it years ago, an average clause can reduce a claim in proportion to the shortfall. Our article on underinsured property shows how that works.

Cover a Manufacturer Usually Needs

The right mix depends on what you make, who you sell to and where. Most manufacturers need some combination of:

Cover depends on the policy wording, including its limits, sub-limits, excesses and exclusions.

Three Recent Client Examples:

1. A whole-of-risk review: We took a manufacturer's full insurance program and mapped every exposure across the business, from plant and stock to suppliers and transport. Laying the policies over that map showed gaps the owners didn't know they had.
2. $20k saved: A manufacturing client's premium had become hard to justify. We remarketed the policy to an underwriting agency that specialises in manufacturing. The cover stayed the same yet the premium came down by $20,000 a year.
3. Cyclone-exposed property in Far North Queensland: Cover for this building was hard to find at all. We placed it by structuring the policy with a cyclone sub-limit, and explained that trade-off clearly to the owner before it was bound. Being open about the terms meant the building was insured.

Past results are not indicative of future results. Each outcome depended on that business's risk, claims history and the market at the time.

Questions to Raise With Your Broker

• Do you have staff working in more than one state? Workers compensation is state-based, and cross-border workers are a common gap.
• Could you face a recall? The ACCC oversees product recalls under Australian Consumer Law. Check you have recall cover, not only products liability.
• Does your liability policy only cover pollution that's sudden and accidental? Gradual contamination may need a separate environmental policy.
• Are your sites exposed to cyclone or flood? Insurers now price by address, and flood is often sub-limited.
• Do you run your own trucks? Chain of Responsibility obligations under the Heavy Vehicle National Law can apply to you.

Why Manufacturers Work With Broad Risk

You deal directly with a senior broker, not a call centre. Broad Risk is a member of the Steadfast network and a Corporate Authorised Representative of Brindabella Insurance Brokers (AFSL 500149, ASIC register entry). Rated 4.9 on Google.

Frequently Asked Manufacturing Insurance Questions

Talk to Warren About Your Manufacturing Insurance

Email warren@broadrisk.com.au or call 0422 131 401 to arrange a no-obligation review of your program. You'll deal with a senior broker from the first conversation. Get started

About the Author

Warren Reid is the Director of Broad Risk Insurance Brokers on the Gold Coast, with 18+ years in commercial insurance broking. He works with manufacturers, wholesalers and transport businesses on their full insurance programs. Broad Risk Insurance Brokers is a Corporate Authorised Representative (AR 001305221) of Brindabella Insurance Brokers Pty Ltd (AFSL 500149) and a member of the Steadfast network.

General advice only. This information doesn't take into account your objectives, financial situation or needs. Read the Financial Services Guide before making a decision.