Learn how sporting goods manufacturers insurance helps sporting goods & pottery 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.
Sporting Goods Manufacturers Insurance
Sporting Goods Manufacturers Insurance. Sporting goods manufacturers produce a wide variety of items for the pursuit of athletic activities, including archery, auto racing, baseball, basketball, bowling, boxing, camping, climbing, cycling, fencing, fishing, football, golf, gymnastics, hiking, hockey, horseback riding, hunting, martial arts, parachuting, racket sports, rugby, shooting, skateboarding, skating, skiing, snowboarding, soccer, track and field, and water sports. They may produce exercise equipment or playground equipment, or protective safety items such as ear coverings, face guards, helmets, or life jackets.
Items produced may be made of cloth, metal, plastic, rubber or wood, or any combination of these materials. Operations for cloth items include cutting, sewing, and assembly. Metal items may be cast, drawn, extruded, punched, or cut from sheets, then joined with seams, rivets, hinges, or screws. There may be some soldering or spot welding. Raw plastic, which can be in powder, liquid, flakes, or pellets, is blended or mixed with a wide range of additives, resins, colorings, and catalysts, heated, then molded, formed, or extruded into an end product which is buffed and finished with paint or lacquer.
As natural rubber contains latex, a substance that can cause severe allergic reactions, most rubber items are now made of synthetic, petroleum-based materials. When natural rubber is used, the latex is imported in prevulcanized sheets that can be shredded and heated into liquid or semi-liquid form, then processed using extrusion, injection molding, or compression molding into an end product. Wood items are cut, sanded, painted or varnished, and assembled.
Each process should be individually reviewed. Because of the varieties of materials and processes involved, the different phases of manufacture may be carried out in different locations or different countries.
As a sporting goods manufacturer, you love what you do. From athletic equipment to protective gear, you produce a wide range of products for the sports industry. It’s also likely that you work with a variety of clients, ranging from sports teams to wholesale distributors. The very essence of your business makes it possible for athletes to enjoy playing and competing in sports.
However, while your work is certainly rewarding and you provide an invaluable service to the clients that you produce sporting goods for, there are a number of liabilities that are associated with operating your business. In order to protect yourself and your livelihood, carrying the right type of sporting goods manufacturers insurance is vital to your success.
Why Insurance Is Needed For Sporting Goods Manufacturing
Despite your best efforts to ensure that your sporting goods manufacturing business runs as smoothly as possible, there’s still a chance that something could go awry. The equipment that you use to create the items you produce could malfunction and injure an employee. A client could file a lawsuit against you, citing negligence on your behalf. Your commercial property could be damaged in storm or your inventory could be stolen.
If situations like these – or others – should arise, you could be looking at very hefty bills. The costs of repairing your commercial building, replacing your inventory, and covering the expense of medical and legal bills can be exorbitant. Unless you have a lot of money saved (and even if you do), these costs could be crippling, and could ultimately end up causing you to go bankrupt. There’s even a chance that you could lose your business.
In order to safeguard yourself from significant financial losses, it’s imperative that you carry the right type of insurance. In the event that the unforeseen does happen, your insurance provider will help to cover the cost of any damages so that you don’t have to end up footing the entire bill yourself. Ultimately, sporting goods manufacturers insurance can protect you from losing your entire business.
What Types Of Insurance Should Sporting Goods Manufactures Carry?
There are a number of insurance policies that manufacturers of sporting goods should carry. The specific types of coverage you should carry depends on the unique circumstances of your business. However, the following types of sporting goods manufacturers insurance coverage are highly recommended, no matter what the specifics of their company may be:
- Commercial General Liability – This type of insurance coverage protects you from claims that may arise as a result of the operations that are associated with your business. These claims may include any injuries that a third-party may sustain on your property and the costs of the resulting medical care; for example, if a vendor slips and falls while making a delivery, commercial general liability insurance would help to pay for the medical care that the individual requires, as well as any legal action that he or she may take.
- Commercial Property – This coverage protects not only the physical structure that your business operates out of, but it also protects the contents inside of it; your equipment and inventory, for example. For instance, if a tree falls on your property during a storm and damages the building as well as some of the machinery, commercial property insurance would help to cover the cost of repairing or replacing the damages. It also covers acts of vandalism and theft.
- Product Liability – Regardless of your efforts to ensure that you are producing the highest quality products, there is still a risk that something could go wrong. In the event that there is a defect with a product that you produce, your clients could file a lawsuit against you. In this type of situation, product liability insurance would protect you from the costs that are associated with legal action.
These are just some of the forms of sporting goods manufacturers insurance coverage that are recommended for sporting goods manufacturing.
Sporting Goods Products Manufacturing’s Perils And Risks
Property exposure consists of an office, production area, and warehouse for raw materials and finished goods. Ignition sources include electrical wiring, heating systems, and production machinery. Different hazards arise depending on the processes used for items made of cloth, metal, plastic, rubber and wood. Dust from textiles, fabric coatings, cutting, sanding, buffing, and polishing may present an explosion hazard. Metalworking may include soldering or welding that may generate sparks.
These operations should be conducted away from combustibles. Flammable liquids, glues, paints, and varnishes should be kept to a minimum in the processing area and stored in approved containers in isolated areas. Hazards increase in the absence of controls, such as dust collection systems or booths with UL-approved fixtures for spray painting. Machinery needs proper maintenance to prevent overheating and wear. If plastics or rubbers catch fire, they will produce an oily black smoke that can be very difficult to extinguish. Poor housekeeping, such as failure to collect and dispose of scraps on a regular basis, could contribute significantly to a loss.
Unless disposed of properly, greasy, oily rags (such as those used to clean the machinery) can cause a fire without a separate ignition source. Sprinklers may be advisable. Appropriate security controls must be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.
Equipment breakdown exposures include malfunctioning production equipment, dust collection and ventilation systems, electrical control panels and other apparatus. These should be properly maintained. A lengthy breakdown to production machinery could result in a severe loss, both direct and under time element.
Crime exposures are from employee dishonesty or theft of higher-valued stock. Employees may act alone or in collusion with outsiders in stealing money, raw materials 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. There should be security methods in place to prevent theft.
Inland marine exposures include accounts receivable if the manufacturer offers credit, computers (which may include computer-run production equipment), exhibitions, goods in transit, and valuable papers and records for customers’ and suppliers’ information. Backup copies of all records should be made and stored off premises. Goods in transit may be damaged by fire, collision, overturn, theft, and water damage.
Premises liability exposure is usually moderate to low due to limited access by visitors. If there is a showroom, factory outlet, or retail operation, visitors may be injured by slips, trips, or falls. Fire, fumes, dust, and noise from woodwork or metal work could pose a nuisance hazard to neighbors.
Products liability exposure varies by type of sporting equipment manufactured and its end use. Items such as balls or golf clubs present a lower exposure, while protective equipment such as face guards, helmets, or life jackets can result in severe injury or death if the product should fail. Sharp edges can result in cuts and other injuries. Paints, lacquers, and some types of metal may be toxic. Some people are highly allergic to natural rubber latex.
There should be adequate warnings and age-appropriate information regarding potential hazards, as well as product recall procedures. Products must comply with all governmental regulations, guidelines and standards.
Environmental impairment exposure is high due to possible contamination of ground, air and water from chemicals and toxic lubricants, solvents, and paints used in the manufacturing process. Raw materials may be toxic and flammable. Fumes and improper disposal of scrap can result in air, ground, or water contamination. Disposal procedures must adhere to all EPA and other regulatory standards.
Automobile exposure may be high if the manufacturer transports raw materials or finished products. Manufacturers generally have private passenger fleets used by sales representatives. There should be written procedures regarding the private use of these vehicles by others. Drivers should have an appropriate license and an acceptable MVR. All vehicles must be well maintained with documentation kept in a central location.
If the chemicals used to finish and coat fabrics are transported by the manufacturer in tanker trucks, drivers of these vehicles must have a Hazardous Material Endorsement on his or her Commercial Driver Licenses and be trained to contain spills.
Workers compensation exposures can be high. Skin and eye irritations are common, and continued exposure can result in serious lung and respiratory problems. Injuries from production machinery are common, as are burns, cuts, slips, trips, falls, foreign objects in the eye, hearing loss from machinery noise, overheating and exhaustion in high temperatures, and back injuries from lifting. Employees should be provided with safety training and protective equipment. Woodworking can result in injury from cuts, amputations, exposure to dust, and respiratory problems from spray-painting.
Should a fire occur, fumes and smoke from molten plastic or rubber are very dangerous. Repetitive motion injuries can result from the ongoing use of machinery. Workstations should be ergonomically designed. The high volume required for production schedules may lead workers to remove guards on the machinery, or to postpone maintenance and repair. Workers must be made aware of the potential side effects of the ingredients they work with, including long-term occupational disease hazards, so they can recognize symptoms and obtain treatment as early as possible.
Safety consciousness and commitment of management, especially in the form of ongoing enforcement and awareness programs, are important considerations.
Sporting Goods Manufacturers Insurance – The Bottom Line
We hope this article on sporting goods manufacturers insurance has been informative. To find out about other forms of insurance you should invest in and how much coverage you should carry, speak to a reputable insurance broker.