Property exposures consist of offices, plant, and warehouse or yard for storage of raw materials, components, and finished units. Ignition sources include production machinery, heating systems, welding and spray painting. There may be fuel tanks on premises to fill tanks for testing. Bottlenecks in the assembly process may result in a high concentration of values of partially completed units, affecting both property valuation and business income. There may be a substantial exposure to loss of income resulting from damage to dependent properties such as key suppliers or customers.

Hazards may increase substantially without controls in place for the separation of exposures such as welding and painting from storage of combustible parts. Some phases of the operation may be highly susceptible to damage by dust (as in electroplating and spray painting) or moisture. Property stored in the open may be subject to loss by wind or hail.

Equipment breakdown exposures include malfunctioning production equipment, dust collection and ventilation systems, electrical control panels and other apparatus.

Crime exposure comes from employee dishonesty and theft as component parts and finished items are high in value. Employees may act alone or in collusion with outsiders in stealing money, raw materials or finished stock. Lack of control over pre-employment background screening and separation of duties increases the exposure. The manufacturer should have security methods in place to prevent theft.

Inland marine exposures include accounts receivable, computers, goods in transit, and valuable papers and records. The primary perils are fire, wind, hail, theft, collision, and overturn.

Occupiers’ Liability exposure is normally low as access by visitors is limited. If tours are given or if outsiders are allowed on premises, visitors may be injured by slips, trips, or falls. If stock is stored in the open, it becomes attractive to trespassers, particularly children. Fumes and noise may pose a nuisance hazard to neighboring properties.

Off-premises liability exposures come from exhibitions or demonstrations either at retail locations or at fairs or conventions. If salespersons demonstrate or show machinery to customers by operating it at a fair or exhibition, the likelihood of loss increases.

Products liability exposure is high due to the nature of the equipment and the high potential for bodily injury to users. This equipment is designed for heavy use on rugged terrains. Operations may be far away from rapid-response emergency services. Safety devices must be installed in such a way that they are not easily bypassed or damaged. The possibility of serious injury is high, whether it is from product malfunction or improper use.

Warning labels regarding dangers of personal injury are important, but provide only limited defence, especially in the case of inherently dangerous products. Sharp-edged parts could break off and cause severe injuries. Malfunction in the wiring could present a fire or an electrocution hazard, and rupture in the fuel lines or gas tank could result in an explosion.

Construction machinery tends to have a long period of use. Older equipment made before improved safety features were introduced may still be in use.

Environmental impairment exposures can range from moderate to high depending on the operations involved. Most construction machinery manufacturers will have fuel tanks on premises and may require a UST policy. Raw plastics are flammable and may be toxic, the catalysts may be caustic, and the final product is usually not biodegradable. Metal contaminants may come from the chemicals, paints, and solvents used. Vapours, fumes and air pollutants, waste water and by-products disposal are concerns which must be evaluated and controlled. Disposal of plastics, chemicals and flammable liquids must adhere to federal and provincial guidelines.

Automobile liability exposure can be high if the manufacturer picks up raw materials or components or delivers finished goods to customers. Transportation of oversized equipment increases the exposure due to the possible failure to secure the load properly, and equipment failure, especially tie-downs and hitches. Manufacturers generally have private passenger fleets used by sales representatives. There should be written procedures regarding the private use of these vehicles by others.

The drivers’ age, training, experience, and records, as well as the age, condition, and maintenance of vehicles, are the main items to consider.

Workers compensation exposures are moderate to high. Injuries from production machinery are common, as are minor cuts and burns; slips, trips and falls; foreign objects in the eye; back injuries from lifting; and repetitive motion losses. Metalworking can result in injuries from cuts, amputations, burns from welding and heated metal. Eye injuries due to exposure to dust and metal may occur, while respiratory problems may occur from spray-painting operations and the solvents used. Plastic parts will have similar exposures plus a potential for burns from heated machinery plus eye and skin irritation from chemicals and resins. There must be a strong safety program in place that involves substantial monitoring and training. Since testing and demonstrations may take place, there can be over-the-road exposures for non-sales employees.