Factory Insurance

Get reliable manufacturing coverage tailored for you by BrokerLink.

Running a factory is often about keeping your machines running smoothly, your production on schedule, and your product's quality right where it needs to be. But with high-value machinery, potential fire hazards, and workplace safety requirements, one unexpected incident can throw a serious wrench in your operation. That’s where factory insurance comes in to help you protect your business from equipment breakdowns, property damage, liability claims, and more.

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What is factory insurance?

Whether you’re producing artisan chocolates, weaving textiles, shaping metal parts, mixing chemicals, or packaging goods for shipment, running a factory often means that you're juggling a lot all at once. Factory insurance, also known as manufacturers' insurance, is a specialized type of commercial insurance package built specifically for manufacturing operations. It's designed to help protect your equipment, buildings, and products under one tailored, comprehensive package.

This insurance package should cover both property risks, like fire, theft, or storm damage, and operational risks, such as machinery breakdowns or product liability claims. This way, if your production line grinds to a halt, a batch gets contaminated, or a customer claims your product caused damage, you'll have the backup you'll need.

Who we help

Running a business is hard work, but BrokerLink simplifies insurance, letting you focus on your business with coverage tailored for any size or industry. Secure your business with us today.

BrokerLink works with factories of all shapes, sizes, and specialties across Canada.

Textile and clothing factories
Paper and printing factories
Automotive parts manufacturers
Wood processing and pulp mills
Food and beverage manufacturers
Metal fabrication and machining shops
Packaging and labelling companies
Plastic and chemical manufacturing plants
Electronics and electrical manufacturing plants

Why do you need factory insurance?

Running a factory means dealing with big responsibilities and even bigger risks. A fire, major machinery breakdown, production delay, worker injury, or lawsuit can throw your operations into chaos and hit your finances hard. In Canada, factories are also expected to meet strict regulations, from worker safety requirements (e.g., WSIB, WCB, etc.) to environmental containment rules and fire code compliance.

Just one incident can have massive consequences. Imagine a critical piece of equipment breaking down in the middle of a production run, forcing a week-long shutdown. That could easily mean a six-figure revenue loss, not to mention missed deadlines and unhappy clients. In fact, a 2023 ABB survey found that unplanned downtime costs Canadian industrial businesses an average of $242,000 per hour.

Factory insurance helps you mitigate risk by covering property damage, liability claims, equipment breakdowns, business interruption, and more, so you can get back to business faster when the unexpected happens.

Types of coverage for factory owners in Canada

Business insurance isn’t legally mandatory in Canada, but for most factory owners, it’s still essential. The right coverage can help you meet contract requirements, regulatory requirements, and even secure financing. Beyond the basics, there are plenty of add-on protections that can save you from the kind of risks you may see coming until they’re right in front of you. Here’s what we suggest for a comprehensive factory insurance policy.

Recommended

Additional

Commercial property insurance can help protect your building, equipment, raw materials, and finished goods from covered risks like fire, theft, vandalism, and certain weather events.

If a covered loss like a fire, flood, or windstorm forces you to pause operations, business interruption insurance can help replace lost income and cover ongoing expenses until you’re back in business.

Factories rely on specialized machinery, and sudden mechanical or electrical equipment failure can halt production instantly. Equipment breakdown insurance can help cover repair or replacement costs to get you back up and running again.

Commercial general liability insurance can help protect you if your factory’s operations accidentally cause injury or property damage to a third party. It can cover medical expenses, property repairs, and your legal defence.

If you use vehicles for deliveries, distribution, or transporting raw materials, you’ll need to have commercial auto insurance. It’s mandatory for all commercial vehicles in Canada.

Factories often store and use hazardous materials, which can create costly cleanup liabilities. Pollution (or environmental) liability insurance can help if your operations accidentally cause environmental damage, such as chemical spills, airborne emissions, or wastewater contamination.

If a product you manufacture causes injury or property damage, product liability insurance can help cover lawsuits, settlements, and legal costs. Some general liability insurance policies also come with a basic level of product liability protection, but you may wish to add more.

If you need to recall goods due to defects, contamination, or safety hazards, this can help cover the costs of removing, replacing, and disposing of the affected items, plus any public relations efforts.

If a critical supplier fails to deliver due to an insured event, this coverage can help offset lost revenue or increased costs of sourcing replacements.

Also known as errors and omissions insurance, this can help protect your business if your design, advice, or engineering work causes financial loss to a client.

With automated production systems and customer data storage, cyberattacks can be a major issue for factories. Cyber insurance can help protect you against these types of threats, including data breaches, ransomware attacks, and cyber fraud.

If a customer fails to pay for goods or services due to insolvency, bankruptcy, or protracted default, trade credit & non-payment insurance can help you absorb the loss.

Crime insurance can help protect you and your business against financial losses caused by employee theft, fraud, or forgery. It can cover both internal and external criminal acts.

Employment practices liability insurance can help protect against claims of wrongful termination, discrimination, harassment, or other employment-related disputes.

Umbrella insurance boosts the limits of your other liability policies, giving you extra protection for large insurance claims.