The U.S. manufacturing industry is growing at a rapid pace, with smaller companies in particular ramping up production on a variety of goods, from auto parts to sporting goods to electrical equipment.

Small manufacturers, which are categorized as having fewer than 500 employees, represent 99% of all U.S. manufacturing enterprises and are the largest share of exporters, according to the Small Business Administration (SBA). More than $1 trillion in revenue is generated by small business manufacturing, with the average small manufacturer bringing in $5.4 million in revenue annually, SBA said.

The manufacturing segment is expected to continue growing as many manufacturers anticipate an increase in production and sales over the next 12 months, a recent survey from the National Association of Manufacturers found.

However, with this growth comes many challenges, such as:

• Retaining financial stability and performance following a product loss or recall

• Maintaining the brand reputation following a product loss

• Securing competitive insurance coverage for a new entity or new product

• Obtaining U.S. coverage for foreign manufactured products, either from a foreign parent or as a U.S. distributor thereof

• Dealing with social inflation, and the increasing number of large jury verdicts

• Negotiating adverse contract agreements

• Complying with state and federal regulations regarding product and environmental safety

• Maintaining operations and premises safety for workers and third parties

General liability insurance for manufacturers is a critical component for small manufacturers to do business and protect their bottom line. Securing coverage on an admitted basis can be challenging because of the broad exposures that manufacturers may face and a lack of underwriting data accessible to carriers. If admitted coverage is available, it is sometimes a slow process to quote and bind coverage, which can delay a manufacturer's ability to get their product to market quickly.

Already a competitive excess and surplus lines underwriter for manufacturers, Philadelphia Insurance Companies (PHLY) sought to provide a solution for small manufacturers by creating an admitted general liability policy that can be quoted and issued quickly for 20 different classes of business. The product features comprehensive general liability coverage with limits of $1 million per occurrence/$2 million aggregate.

PHLY expanded into additional state venues and product classifications after an encouraging response to the initial product offering. The product is now available in all states except New York and Louisiana.

Acceptable classes of business include:

• Auto Parts: Operating

• Die Casting

• Electrical Equipment and Parts

• Electrical Generating Machinery

• Engine and Turbine

• Instrument and Controls (Not Analytical)

• Machine Shops

• Machinery and Parts (Not Construction)

• Metal Goods

• Metal Works

• Plastic or Rubber Goods

• Pump and Compressors

• Sporting Goods

• Toys or Games

PHLY will also accept foreign manufactured products.

Other coverage features include:

• First dollar coverage

• Employee benefits liability coverage available

• Minimum premium starting at $3,000

• A dedicated team of underwriters with product underwriting expertise

• Access to product-specific risk management services

• Web-based risk management solutions, including free online interactive defensive driver training course and examination; regular e-flyer communications on current risk management topics; and a strategic partnership with a best-in-class vendor for discounted background and motor vehicle record (MVR) checks

PHLY is looking to expand the product to include additional coverages, states, and/or product classifications later this year. PHLY will continue to identify customer needs and challenges as its book of business develops.

Application Process

PHLY will need the following to begin the quoting process:

• Completed ACORD application

• PHLY Manufacturers Product Liability Supplemental Application or similar competitor application

• Currently valued insurance company loss runs for the current year plus four prior years

A dedicated team of Underwriters has been assigned to handle this business and you can expect a quote within two business days on average. If admitted coverage is not available, the account can receive a surplus line quote.

Learn More

With more boutique products being manufactured to meet specific needs, small manufacturers need a reliable insurer to protect their evolving exposures. Learn more about PHLY's admitted general liability manufacturing product by visiting our product page or contacting your PHLY representative today.