Learn how vitamins, nutraceuticals & dietary supplements manufacturers insurance helps dietary supplement industry manufacturing businesses protect themselves against the many complex risks they face every day. Whether your business is large or small, or you make one or many products - you need the right commercial insurance program to protect you.
Vitamins, Nutraceuticals & Dietary Supplements Manufacturers Insurance
Vitamins, Nutraceuticals & Dietary Supplements Manufacturers Insurance. Vitamins, dietary supplements, and nutraceuticals are all the rage in health and wellness. They can provide a great deal of benefits, from improving a person's general health to boosting athletic performance and aiding in weight loss.
They can produce over-the-counter drugs such as vitamins, energy drinks and weight loss products. Products are made from a variety of raw materials which may be organic, chemical, or synthetic. Processes may include aeration, blending, crushing, filtering, freezing, heating, mixing, molding, pressurizing, or washing. The end product may take a variety of forms such as capsule, jelly, liquid, pill, powder or spray. Cleanliness, purity, and the proper mix of ingredients are critical.
However, despite the benefits that vitamins and nutritional and dietary supplements can provide, there are risks associated with manufacturing and distributing these products. These products contain a variety of ingredients. These ingredients may not provide the benefits that they say they will, or worse, they could end up causing an injury or an illness. In these situations, third parties that use these products could take legal action against the company that manufactured or distributed them. The cost of these legal claims, defense fees, and judgments can cause financial devastation for a company.
For all of the reasons listed above, it's important for manufacturers and distributors to protect themselves. vitamins, nutraceuticals & dietary supplements manufacturers insurance can offer the protection that is needed for many legal claims that may arise.
What Type of Insurance Do Vitamins, Nutraceuticals & Dietary Supplements Manufacturers Need?
Commercial general liability insurance is one of the most basic insurance policies available, and it's a policy that all business owners should have - including those who work in the vitamin, nutraceuticals, and dietary supplement industry.
This type of insurance policy is designed to protect a manufacturer from financial losses that are associated with any legal claims that they are held liable for. This includes personal injury, property damage, and injuries that are associated with advertising claims. A commercial general liability insurance policy will cover the following:
- Bodily Injury - Should someone sustain a bodily injury as a result of a product you are selling - a vitamin that causes an adverse reaction or a supplement that plays a role in the development of a disease, for example - commercial general liability insurance will cover the costs associated with the damage, including medical bills, legal fees, and any moneys that are awarded to the person who files a claim against you.
- Premises Liability - Whether you are a manufacturer or a distributor of vitamins, nutraceuticals, or dietary supplements, it is likely that you operate your business out of a warehouse or a storefront. Should someone sustain an injury on your property, such as a slip and fall, commercial general liability insurance will provide the coverage that is necessary for any medical bills, legal fees, and other damages.
- Advertising Injuries - Should a product you manufacture or sell claim it will do something, but fails to and as a result, causes personal injury, you could be sued. For instance, if a dietary supplement claims that it will aide in weight loss, but rather causes weight gain, there is a chance that you could be looking at legal claims. A commercial general liability insurance policy will also protect you from the costs that are associated with such claims, including legal fees and moneys that may be awarded to the party who sues you.
Worker's Compensation - This important coverage provides income loss protection and medical bill coverage for workers who are injured or become ill due to a work-related peril. And in most states - for any employees that are not owners - this coverage is mandatory. Check with your broker to make sure your manufacturer business is in compliance.
Commercial Auto - A business auto policy covers cars, vans, trucks, trailers, and tow trucks, among other vehicles, that might be used in your business. It provides liability overage if you or someone working for you causes or is involved in an accident. The limits you need for your policy should be based on your state's requirements at a minimum, then at the level of assets that you need to protect in a worst-case scenario.
Types Of Claims The Vitamin, Nutraceuticals, And Dietary Supplement Industry Could Face
Third party bodily injury claims, judgements and defense costs can be financially destructive to a company. Though it is virtually impossible to state all of the different types of incidents that could arise that would result in someone filing a claim against your business, below are some of the claims that you could end up facing in this industry:
- Tampering of a product
- Improper directions printed on labels
- Selling expired products
- Adverse side effects that are unknown
- Improper purification of ingredients
- Falsifying ingredients in a product
- Product recalls
These are just some of the claims that have been made against the supplement industry. In the past, those who have filed such claims have been awarded millions of dollars in retribution. As you can imagine, companies that endure such claims can face serious financial hardship. For these reasons, it is important to protect yourself with a vitamins, nutraceuticals & dietary supplements insurance policy.
Dietary Supplement Manufacturing's Perils And Risks
Property exposure consists of an office, production plant, and warehousing of raw materials and finished goods. Ignition sources include electrical wiring, heating and cooling equipment, overheating of production machinery, buildup of static electricity, escape of fumes from storage tanks, and refueling of forklifts. The large draft spaces in storage warehouses can contribute to the spread of a fire.
Flammable lubricants and cleaning agents may be stored on premises. Some chemicals and final products may be spoiled by temperature change, humidity, dust or other factors. Due to the sterile conditions that must be maintained throughout the manufacturing process, even a small fire can result in a total loss to stock. Raw ingredients and finished stock are expensive, and may be targeted by thieves who anticipate profits from black market sales.
Business interruption exposure can be high because a large loss can result in lengthy downtime for repairing or replacing production equipment.
Equipment breakdown exposures include breakdown losses of processing systems, heating and cooling equipment, electrical control panels, and other apparatus. Breakdown and loss of use to the production machinery could result in significant loss, both direct and indirect, such as, time element.
Crime exposures are chiefly from employee dishonesty and theft of money and securities. The black market for pharmaceuticals, particularly controlled substances, makes many drugs and/or their raw ingredients targets for theft. Employees may act alone or in collusion with outsiders in stealing money, raw materials, trade secrets, or finished stock. Background checks should be conducted on all employees. There must be a separation of duties between persons handling deposits and disbursements and handling bank statements.
Inland marine exposures include accounts receivable if the manufacturer offers credit to customers, computers (which may include computer-run production equipment), goods in transit, and valuable papers and records for customers' and suppliers' information as well as quality control testing results. Goods in transit may be damaged by fire, theft, collision and overturn, spillage, contamination or aerosol explosion. Some products require shipment in refrigerated vehicles to prevent spoilage.
Premises liability exposures are normally low to moderate unless aerosols are manufactured or stored on premises. Although tours may be conducted, access by visitors is usually limited and controlled due to the need for a sterile environment. Visitors may be injured by slips, trips, or falls, or may be exposed to toxic or caustic chemicals. Fumes, spills, or leaks from tanks may cause serious injury or property damage to neighboring properties.
Products liability exposures are severe due to the potential for bodily injury, including sickness and death, to consumers of finished products. Quality control at all phases of the operation from product development to packaging is critical to reduce the exposure to injury. Significant injuries or damage may follow from improper processing or mixing of ingredients, improper storage, during transport or even inappropriate packaging and labeling.
Packaging should include information addressing possible side effects and inform consumers of action that should be taken in the event of an allergic reaction. Lack of compliance with government regulations and controls may dramatically increase hazards, and may also make defense of claims difficult. There should be a plan for recalling defective products.
Environmental impairment exposures are very high. Sudden or cumulative discharges of chemicals may contaminate air, surface or ground water, or soil. Disposal procedures must adhere to all EPA and other regulatory standards. Processes themselves may cause thermal or noise pollution. If there are underground tanks, a UST policy will be required.
Business auto exposure may be very high if the manufacturer transports raw materials or finished products. Refrigerated trucks used for this purpose as well as the transport of other drugs sensitive to temperature changes should be well maintained to prevent overheating and explosion.
Workers compensation exposures may be high. Injuries from production machinery are common, as are burns, cuts, slips, trips, falls, hearing loss from machinery noise, and back injuries from lifting. Employees should be provided with safety training and protective equipment. Ergonomically designed workstations can prevent repetitive motion injury. Aerosol containers may explode and injure workers.
Ingredients may be toxic and/or caustic, with a high potential for injury to eyes, lungs, or skin. Workers must be made aware of the potential side effects, including long-term occupational disease hazards, so they can be aware of warning symptoms and obtain treatment as early as possible. Drivers of forklifts and vehicles may be injured in accidents.
Vitamins, Nutraceuticals & Dietary Supplements Manufacturers Insurance - The Bottom Line
We hope this article on vitamins, nutraceuticals & dietary supplements manufacturers insurance has been informative. Protecting your income, productivity, and assets is paramount to the success of your business. Work with your broker to get the best value for your money on coverage that fully protects you from all potential perils.
Further Reading On Manufacturing & Product Liability Insurance
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