The manufacturing industry represents nearly 11 percent of the U.S. economy. According to the National Institute of Statistics of the U.S. Department of Commerce, manufacturing companies contributed $2.3 trillion, or 10.8 percent, to U.S. Gross Domestic Product in 2021.
The 2022 Assurex Manufacturing Benchmark Report collected information on the purchasing decisions of over 1,200 of their individual manufacturing clients and offers an abundance of useful information for members of this critical industry segment.
Highlights: Aggregate Data
The nature of manufacturing has increased reliance on technology in recent years, particularly with automated systems, CAD/CAM manufacturing, and robotics. As the exposure has increased, cyber insurance has become more prevalent in the manufacturing industry. We collected data from 1,246 manufacturing firms regarding cyber insurance. Alarmingly, only 54% percent of those firms purchase some form of cyber insurance. As cyber crime rates continue to rise and impact all industries, it will be imperative for organizations to procure adequate cyber coverage moving forward.
Manufacturing companies rely more on owned or leased property than most other businesses. Manufacturing companies require at least one location and some level of equipment to produce products. In addition, they typically purchase insurance coverage for equipment breakdown, business interruption, and extra expense coverage. Property insurance is typically defined by total insured value, i.e., the sum of the building, equipment, and income values of property that companies chose to insure.
The companies involved in our survey carry a wide range of property insurance, with limits ranging from less than $1 million to over $600 million. Twenty-two percent of the companies in our survey purchased property insurance limits in excess of $40 million, with 8 percent purchasing at least $100 million of coverage. Twenty-seven percent carry limits less than $3 million, and 51 percent purchased between $3 million and $40 million of coverage.
Directors and Officers
Directors and officers (D&O) liability coverage protects the personal assets of directors, company officers, other employees and the entity itself from allegations of mismanagement. We received information on the purchase of D&O coverage from 269 manufacturing entities in our survey. This constitutes just over 22 percent of the firms in our survey, which is consistent with other surveys that we have performed.
Of the manufacturing firms in our survey that purchase D&O insurance coverage, 55 percent purchased only a $1 million limit. Thirty-one percent purchase limits of $2 million or $3 million. Only 14 percent of the firms purchasing the coverage report limits of $5 million or more.
Want To Learn More?
Our complete 2022 benchmark report includes aggregate as well as focused data, including insights on the furniture/wood, machinery/equipment and metal manufacturing segments. In addition to the full report, be on the lookout for a new, three-party blog series taking a deeper dive into each of these three industry segments.
Reach out to a trusted URA partner today to request the full report and to learn more about its findings.