Manufacturers across the country face myriad risks as the produce goods for consumer markets. To protect against product liability risks for manufacturing operations in the state, Utah manufacturers insurance is a valuable solution. Product liabilities are not the only risk facing manufacturers and wholesalers, however; the emerging threat of cybercrimes necessitates a new look at insurance protections. In this guide, we will explore the roles of both Utah manufacturers insurance and cyber liability policies to protect business interests from expensive losses.
Utah Manufacturers Insurance: An Overview
When goods are produced for consumer markets, manufacturers and wholesalers are exposed to a wide range of risks. These risks include aspects such as employment practices, business interruption, transportation, and employee injuries. Each of these risks require a comprehensive risk management solution that has Utah manufacturers insurance as its foundation.
Perhaps the most potentially damaging risk is that of product liability. If an end user were to be injured or killed as a result of the use of a manufactured item, the maker as well as wholesalers and retailers may be held liable for claims of:
- Defective products
- Inadequate safety warnings
- Substandard materials and manufacture
- Missing or insufficient safety features
- Poor or unsafe design of products
Manufacturers have a duty to design and produce products that are safe when used as they are intended. One consumer injury from a product’s design, construction, or sale can result in expensive lawsuits; without the right insurance protections, the manufacturers’ or sellers’ business assets are at risk of loss.
Cyber Crimes: An Emerging Threat in Manufacturing
Over the past decade, news media has been filled with stories of data breaches targeting hospitals, financial institutions, and Fortune 500 companies. These data breaches have accounted for billions of dollars in losses. Now, cyber criminals are broadening their attacks by targeting manufacturing and retail operations. Manufacturers around the world rely on computer systems to manage operations; these systems control everything from assembly processes to product design, sales, and financial management. If criminals were to gain unauthorized access to computer systems, the results can be financially devastating.
Several manufacturing firms have been the victims of highly-publicized cybercrimes. In one, hackers took control of a company’s computer-controlled furnace, resulting in millions of dollars of property damage. Another attack hijacked a Ukrainian manufacturer’s entire operating system environment, causing losses that affected a wide array of industries due to supply chain interruptions and failure of critical design and manufacturing hardware.
With the looming specter of cyber attacks on the horizon, safeguards are needed, and Utah manufacturers insurance may not be enough to protect business owners from crippling financial losses as a result of cybercrimes.
Protecting Manufacturers with Cyber Liability Insurance
Cyber liability insurance was created to address risk exposures posed by computer criminals, including the hijacking or theft of critical business information. A single data breach can cost a company millions of dollars in direct expenses; add in business interruption and reputational damage and the financial burden can be staggering.
For manufacturers and wholesalers, a cyber liability insurance policy typically provides both first- and third-party coverages. First-party coverages include data loss or destruction, distributed denial of service (DDoS) attacks, business interruption, and theft of sensitive business data. Third-party coverages protect against the possibility of regulatory penalties and fines for failing to secure business data. Many cyber liability policies also include specialized coverages, including reimbursement for:
- Forensic investigations
- Security audits
- Post-breach public relations
- Expenses associated with reputational harm
Cyber liability is a growing problem in the manufacturing sector. Unfortunately, few manufacturers and wholesalers have not adopted cyber liability insurance as a risk management tool. It is estimated that only about 5% of manufacturers in the United States carry cyber policies. Utah manufacturers insurance goes a long way toward protecting business interests, but it is not always enough to address all risk exposures in manufacturing and wholesaling. With the additional coverage provided by cyber liability insurance, manufacturers in the state of Utah can gain valuable protection against expected and unforeseen risks.
About BTC Insurance Services
Founded in 2011, BTC Insurance Services has proudly served Utah businesses with comprehensive and custom-tailored insurance coverages for a decade. We pride ourselves on fostering long-term client relationships with a personalized and hands-on approach, and have established a reputation built on quality and transparency. For more information about our products and services, we invite you to contact one of our reputable agents today at (855) 944-3457, or send us a message here.
