Manufacturing Insurance in Ontario

Who it’s for

Metal fabricators, machine shops and welding shops
Food and beverage producers, from commercial kitchens to small processing plants
Custom shops: cabinetry, millwork, signs, furniture and printing
Contract manufacturers making products under someone else's brand
Businesses that both make and install, sell or distribute their products
Owners whose building is held in a separate holding company

What it covers

There’s no single “manufacturing policy.” It’s a set of coverages put together around how you make and sell things. For most small and mid-sized manufacturers, that means:

Property: your building (if you own it), machinery, tools, tooling and moulds, and leasehold improvements.
Stock: raw materials, work in progress and finished goods, including stock in transit or at a customer’s location where needed.
Equipment breakdown: sudden mechanical or electrical failure of machines, compressors, boilers, refrigeration and electrical panels. Standard property coverage doesn’t include this.
Business interruption: the income you lose and ongoing expenses you still pay while you’re shut down after an insured loss, including a breakdown if it’s arranged that way.
General and product liability: claims that your premises, your operations or your products caused injury or damage to someone else.
Commercial auto: delivery vans, pickups, trucks and trailers.

Depending on the shop, you may also need product recall coverage, cyber coverage (production systems are often connected), and coverage for customers’ property in your care, such as material sent to you for machining or finishing.

What it doesn’t cover, and common gaps

Breakdown not added. A burnt-out motor on your main CNC machine isn’t a property loss without equipment breakdown coverage.
Business interruption that’s too short. Replacing a specialized machine, or rebuilding a plant, can take far longer than owners expect. If the coverage period ends before you’re running and have your customers back, the money stops.
Your own product. Liability coverage responds to injury or damage your product causes. It generally won’t pay to replace or redo the defective product itself, or to recall it.
Customers’ property. Material or parts a customer ships to you for work may not be covered unless the policy addresses it.
Undisclosed exposures. Selling into the U.S., making parts for vehicles or aircraft, or adding a new product line all need to be disclosed. If the policy describes a different business from the one you run, a claim can be in trouble.
Values that haven’t kept up. Machinery and building costs change. Underinsured values can trigger a co-insurance penalty on a claim.

Where your business and family policies overlap

Most small and mid-sized manufacturers are owner-run, and the business and the family are closely tied.

The building in a holding company. Many owners hold the plant in a holdco and lease it to the operating company. The holdco needs coverage for the building and its rental income; the operating company needs coverage for its equipment, stock, improvements and lost income. Both need liability. If it’s all on one policy in one name, a claim can get complicated.
Equipment and stock at home. Say you run a small custom furniture shop and keep a few machines or finished pieces in your garage at home. Your home policy likely covers business property only to a small limit, if at all.
Work vehicles at home. A pickup or van registered to the company but parked in your driveway and driven by family members on weekends needs to be set up correctly on the commercial auto policy.
Product liability and your personal assets. If you’re operating as a sole proprietor or partnership, a product claim can reach what you own personally. Even with a corporation, how your umbrella and liability limits fit together matters.
Umbrellas. A personal umbrella usually excludes business activity. A commercial umbrella usually doesn’t cover the family cars or cottage. Both may be needed, and the limits should be decided together.

Steve sets out the whole picture, operating company, holdco, vehicles, home and umbrella, so each policy knows what the others are covering.

How Steve works on this

Steve starts with a walk through your operation, in person or on a call: what you make, how it’s made, who buys it and where it ends up. That’s what underwriters need to understand, and getting it right on the application matters. He explains the policy in plain terms, shows you where it falls short (breakdown, recall, U.S. sales, interruption period), gives you options and tells you what he’d recommend. Through Moller Insurance, he works with more than 20 insurers, which helps when a shop has an unusual process or product. At renewal, he calls to talk through new equipment, new products, new customers and changes in revenue.

If you’d like a second set of eyes on your current program, book a review.

Common questions

Isn't product liability just part of general liability?

Usually, yes, it's part of the CGL policy. But for a manufacturer, the details matter more: where your products are sold, whether any go to the U.S., whether you make components for someone else's product, and whether recall costs are covered. Those answers change which insurers will write you and how.

Does my policy cover a machine that breaks down?

Not under standard property coverage. Mechanical or electrical breakdown of machinery, compressors, boilers or electrical systems is covered under equipment breakdown insurance, which is usually added to the property policy. For most manufacturers it's one of the most important coverages.

What happens if a key machine is down for weeks?

Equipment breakdown can include coverage for the income you lose while the machine is being repaired, and for extra costs like rush shipping parts or renting a replacement. Check that your business interruption coverage actually applies to breakdowns, not just fires.

Is a product recall covered?

Usually not by a standard liability policy. The costs of pulling your own product off the market are generally excluded. Recall coverage is a separate policy and worth discussing, especially for food producers and component makers.

Do I need different coverage if I sell into the U.S.?

Often, yes. Products sold into the U.S. can face a different legal environment, and some insurers restrict or price U.S. sales differently. It needs to be disclosed accurately on your application.