for SME Businesses
Chemical Manufacturing Insurance
Chemical manufacturing insurance is a specialist form of business insurance designed for chemical manufacturers, protecting them against a wide range of risks associated with chemical production. This can include cover for property damage, liability claims, employee injuries and environmental damage. It’s essential for businesses operating in the chemical sector due to the increased risk exposures presented when working with handling hazardous materials and the regulatory and risk management surrounding this.
What Does Chemical Manufacturing Insurance Cover?
Chemical manufacturing insurance typically covers the claims arising from the key risks associated with chemical production. It can provide protection for property damage, third-party injury, employee injury and pollution or contamination incidents. Additionally, businesses can extend cover to include optional add-ons for specific risks, such as product recalls or cyber-attacks.
Core Cover Types
Public Liability Insurance
Protection against third-party injury or property damage caused by the business’s operations. Essential for businesses engaging in activities that could cause harm to the public.
Product Liability Insurance
Protection against claims arising from defective products that cause injury or damage. Crucial for manufacturers of chemicals, as defects or contamination in the product can lead to claims with significant financial losses.
Employers Liability Insurance
Legally required for businesses with employees under UK law. Covers workplace injuries to employees. This is particularly important where employees are working with chemicals or hazardous materials.
Environmental & Pollution Liability Insurance
Covers pollution, contamination and environmental damage caused by the business’s activities. Essential for manufacturers handling hazardous materials, as it protects against the substantial costs of pollution cleanup, legal fees and third-party claims.
Business Interruption Insurance
Covers the loss of income if operations are halted due to an insured event, such as a fire or equipment breakdown. Important for chemical manufacturers to ensure they can recover financially in the event of an operational stoppage, minimising downtime losses.
Property & Equipment Insurance
Covers your business against damage or loss to physical assets, including buildings, equipment and stock.
Public Liability Insurance
Protection against third-party injury or property damage claims.
Product Liability Insurance
Protection against claims for injury or damage caused by a product.
Employers Liability Insurance
Protection against claims from employees for work related injury or illness.
Environmental Liability Insurance
Protection against claims from environmental damage, pollution & contamination.
Business Interruption Insurance
Protection against loss of income & operating costs after unexpected disruption to business activities.
Property & Equipment Insurance
Protection against the loss of or physical damage to your physical assets.
Optional Cover & Policy Extensions
Chemical manufacturers can also consider optional policy add-ons to further tailor their cover to meet specific needs.
- Product Recall Insurance: Covers the costs and losses associated with recalling defective products that pose a safety risk to consumers.
- Directors & Officers Liability Insurance: Protection against claims alleging wrongful acts, errors or omissions committed by directors or officers in their managerial or executive roles.
- Professional Indemnity: Protection against claims if advice, design or consulting services are provided.
- Cyber Liability Insurance: Protects against the risks of cyber-attacks, including data breaches or disruptions to manufacturing systems.
- Stock & Machinery Breakdown Insurance: Covers the cost of damage to essential stock or machinery used in the manufacturing process.
- Motor, Fleet & Goods in Transit: Protection where vehicles and transport form part of your operations.
If you’re looking to compare chemical manufacturing insurance options or would like assistance, we’d be happy to help. We can arrange a quotation and help you compare options based on your requirements.
Common Exclusions and Important Considerations
It’s crucial for chemical manufacturers to understand the exclusions and limitations within their policy to avoid any surprises in the event of a claim. Standard chemical manufacturing insurance policies may exclude:
- Pollution: unless specifically covered by a separate pollution liability endorsement.
- Product recall: unless specifically covered.
- Work outside policy terms: some policies may exclude risks arising from work outside the agreed operational scope.
Manufacturers should carefully disclose all their business activities, policy requirements and thoroughly understand the policy limitations to ensure no compromise in cover.
Who Needs Chemical Manufacturing Insurance?
Chemical manufacturing insurance is designed for businesses operating in the chemical industry, ranging from chemical plants to small niche manufacturers. It’s particularly important for:
- Chemical manufacturers: companies involved in the production of chemicals, agrochemicals, detergents, disinfectants, washroom chemicals, concentrates, private-label products, small-batch chemicals and other related products.
- Contract manufacturers: businesses that produce chemicals on behalf of other companies.
- Toll manufacturers: businesses that process raw materials or semi-finished goods provided by other companies for a fee, without taking ownership of the final product.
- Distributors and wholesalers: companies distributing chemicals to retailers or other manufacturers.
- Companies handling hazardous materials: manufacturers working with volatile or hazardous substances that require specific cover due to the associated risks.
If your business falls within these categories or if you’re unsure whether your current policy provides the appropriate cover, we can assist with arranging insurance cover specific for your needs.
Key Benefits of Chemical Manufacturing Insurance
Chemical manufacturing insurance offers numerous benefits to businesses operating in this high-risk industry:
- Financial Protection Against Common Risks: Protects businesses from significant financial loss following claims due to accidents, product defects or environmental damage including legal fees and compensation costs.
- Peace of Mind: Helps businesses feel secure knowing they have cover for unforeseen events when operating in high-risk environments.
- Legal and Regulatory Compliance: Ensures that businesses meet legal and contractual insurance requirements.
Why is Chemical Manufacturing Insurance Important?
Chemical manufacturing businesses face significant risks that can lead to financial loss, legal claims or reputational damage. The importance of this insurance lies in:
- Risk Mitigation: Protecting against financial loss due to accidents, product defects or regulatory breaches.
- Legal Protection: Cover for legal costs and compensation claims arising from workplace injuries, third-party damage or product-related incidents.
- Business Continuity: Ensuring that the business can continue operations without severe financial strain in the event of a claim.
Without adequate insurance, manufacturers expose themselves to the risk of significant financial consequences, which could jeopardise long-term business stability.
Where Can Chemical Manufacturing Claims Arise?
Claims in the chemical manufacturing industry can arise from various incidents, including:
- Workplace Injuries: Injuries resulting from chemical exposure, equipment malfunction or handling accidents.
- Environmental Contamination: Chemical spills or other environmental damage caused by manufacturing activities.
- Product Defects: Faulty products that lead to consumer injury or property damage.
- Contractual Breaches: Failure to meet contractual insurance requirements leading to claims from clients or partners.
What Does Chemical Manufacturing Insurance Cost?
The cost of chemical manufacturing insurance depends on a range of factors, including:
- Business Size & Scale: Larger businesses with greater revenues and physical assets, including buildings, plant, equipment and stock typically face higher premiums.
- Risk Profile: The type of chemicals manufactured, the scale of operations and the associated risks influence pricing.
- Cover Limits: Higher limits of indemnity, particularly for product liability or environmental risks, result in higher premiums.
- Claims History: A history of claims or incidents may lead to higher premiums.
Pricing can vary considerably depending on these factors, so it’s crucial for businesses to fully disclose their specific risk profile to get an accurate quote.
Regulation & Compliance for Chemical Manufacturers
Chemical manufacturers are subject to a range of regulations aimed at ensuring the safety of employees, consumers and the environment. From chemical safety and health regulations to environmental laws and transportation guidelines, adherence to these standards is essential for the continued success of chemical manufacturers.
Key regulations include:
- Chemical Safety: REACH, COSHH, CLP Regulation and the Seveso III Directive ensure safe production and handling of chemicals.
- Environmental Protection: The Environmental Protection Act 1990, Water Resources Act 1991, Environmental Permitting Regulations, Waste Framework Directive, Industrial Emissions Directive and other local regulations require businesses to minimise environmental impact.
- Health & Safety: Compliance with the Health and Safety at Work Act, Dangerous Substances and Explosive Atmospheres Regulations and other safety regulations is mandatory.
- Transportation Regulations: ADR Regulations, IMDG Code, RID Regulations and ICAO Technical Instructions set out the regulations for transportation of hazardous materials and chemicals.
Why Choose David J Miller Insurance Brokers?
At David J Miller Insurance Brokers, we can help chemical manufacturers with the unique challenges faced when arranging insurance. We can provide tailored insurance solutions with access to specialist insurers to ensure your business is adequately protected. With over 50 years of experience and a reputation for trust, we offer personal service and practical assistance in the event you need to make a claim.
How to Get a Chemical Manufacturing Insurance Quote
Getting a quote for chemical manufacturing insurance is straightforward. Simply contact our team. We’ll take the time to get to know you, your business and understand your specific requirements and from there we’ll help you compare options to find the most suitable cover for your business.
Summary: Insurance for Chemical Manufacturers
Chemical manufacturing insurance is essential for businesses in the chemical industry, providing cover for risks like product defects, environmental damage, workplace injuries and business interruption. This insurance is crucial for maintaining compliance, managing risks and ensuring business continuity. At David J Miller Insurance Brokers, we have access to specialist insurance underwriters for chemical manufacturers which can provide cover tailored to meet your needs.
Chemical Manufacturing Insurance FAQs
What does chemical manufacturing insurance cover?
Chemical manufacturing insurance can cover risks such as product liability, environmental damage, public liability and employee injury.
What insurance do chemical manufacturers need?
Chemical manufacturers typically need product liability, public liability, employers’ liability and environmental liability insurance.
What insurance cover is essential for a chemical manufacturing business?
Essential cover includes product liability, public liability and employers’ liability to protect against common claims.
What cover limits are recommended for chemical manufacturers?
Cover limits should align with business size, risk profile and contractual limits where required, with £5 million being a typical minimum for public liability and product liability and £10 million for environmental liability.
How do chemical manufacturing risks affect insurance premiums?
Higher-risk operations, such as those dealing with hazardous chemicals, lead to higher premiums.
Do chemical manufacturing businesses need liability insurance?
Yes, liability insurance is essential to protect against claims for injuries or damage caused by chemicals or products.
Do chemical manufacturers need environmental liability insurance?
Environmental liability insurance is not mandatory but most consider it crucial for businesses that handle chemicals that may cause environmental damage.
Does a chemical manufacturer need professional indemnity insurance?
Professional indemnity insurance is necessary where businesses provide consultancy, advise or design services.
What is the difference between professional indemnity and public liability insurance for chemical manufacturers?
Professional indemnity covers advice, design or consultancy services, while public liability covers third-party injury or property damage.
What is the difference between product liability and public liability insurance for chemical manufacturers?
Product liability covers injury or damage caused by products, while public liability covers third-party claims for injuries or damage unrelated to products.
What is product recall insurance and do I need it for my chemical manufacturing business?
Product recall insurance covers the costs of recalling defective products; it’s highly recommended for chemical manufacturers.
Does a chemical manufacturer need cyber insurance cover?
Yes, given the rise of cyber-attacks, manufacturers should consider cyber liability insurance to protect their data and disruption to their operations.
What are the benefits of using an insurance broker for chemical manufacturing insurance?
An insurance broker helps find tailored cover, compare options and can help you meet regulatory and contractual requirements.
How can I make a claim under my chemical manufacturing insurance?
To make a claim, contact us directly and we will provide notify the claim to insurers.
How much does chemical manufacturing insurance cost?
Premiums vary based on factors like business size, risk profile, cover limits and claims history.
How can I get a quote for chemical manufacturing insurance?
Contact us for a quote. We’ll discuss your needs and help you find suitable cover for your business.
What information do you need for a quote?
We’ll need details about your business operations and processes, the chemicals you work with and produce, your business risk profile and cover preferences.
What are the common exclusions in chemical manufacturing insurance?
Common exclusions include pollution and product recall both of which can be added where requested.
What types of chemical manufacturing operations can you insure?
We can insure all types of chemical manufacturing businesses, from small operations to larger-scale facilities handling hazardous chemicals.
Do you cover transportation of hazardous chemicals?
Yes, transportation of hazardous chemicals can be arranged with the right policy.
What happens if there’s a product recall?
Where covered, product recall insurance helps cover the costs and losses of recalling and replacing defective products.
Can you cover research and development activities?
Yes, R&D activities can be covered where disclosed to and agreed by insurers.
Can you cover chemical manufacturing startups?
Yes, we can arrange insurance for startups in the chemical manufacturing sector.
Can you provide cover for chemical storage facilities?
Yes, we can arrange cover for chemical storage facilities, including environmental and property damage risks where required.