Specialized Types Of Property Insurance Factories Might Need

Factories invest a lot in their physical assets, and they need to protect those assets whenever possible. While commercial property insurance provides general protection for property, there are more specialized types of property insurance that factories may also need depending on their situation.

Flood Insurance for Unusual Water Activity

Flood insurance covers water-related damage that's caused by nature (and not by broken plumbing). This includes floods, which is where the insurance's name comes from, but it also can include mudflows, mudslides, and abnormal wave patterns. All of these risks are excluded from basic commercial property insurance policies.

Therefore, your factory should purchase separate flood coverage if the factory is at a significant risk of being damaged by unusual water activity. Factories in flood plains, on the coastline, and along rivers should all have this coverage in place. Additionally, those that are on dry land which is protected by levees should have coverage too in case the levees burst.

Earthquake Insurance for Ground Tremors

Like floods, earthquakes are commonly also excluded from the risks that basic commercial property insurance protects against. If your factory is at risk of being damaged during an earthquake, you should get this coverage. The insurance is widely needed in some regions of the country, but it's rarely purchased in other places where ground tremors are uncommon.

Equipment Breakdown Insurance for Malfunctions

While commercial property insurance protects equipment from damage that's caused by covered perils, the insurance's protections don't extend to regular breakdowns and malfunctions. Equipment breakdown insurance, however, does protect against unexpected malfunctions of covered equipment.

Should a covered piece of equipment breakdown, even if the malfunction is due to user error, equipment breakdown insurance will pay to have the equipment repaired. The insurance will cover repairs during normal business hours as well as work that must be done during evenings, nights, and weekends, which is important if your factory runs its machines around the clock.

Because of the protections it provides, equipment breakdown insurance isn't the cheapest form of property insurance. You probably don't want to get it for every piece of equipment that your business has because doing so would be costly. You should, however, protect the most essential machines with this coverage.

Inland Marine Insurance for Shipments

Commercial property insurance will protect finished goods while they're housed on your factory's property, but this insurance won't cover goods that are shipped to customers. Inland marine insurance, in contrast, covers goods while they're being sent to customers. 

If your factory sends large shipments of products to customers, inland marine insurance will make sure those shipments are properly protected.

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