Manufacturing & Production Insurance
Industrial-strength insurance for NZ manufacturers and producers
New Zealand manufacturers and producers — from food processors and timber mills to engineering workshops and electronics manufacturers — operate with high capital asset values, complex supply chains and significant product liability exposure. A single product recall or equipment failure can halt production for weeks, with catastrophic financial consequences. Tailored manufacturing insurance addresses the full lifecycle of risk, from raw materials through to delivery of finished goods.
Get a QuoteRecommended Insurance for Manufacturing & Production
Public Liability Insurance
Protect your business from third-party injury and property damage claims.
Learn moreEmployers Liability Insurance
Cover for employee claims that fall outside ACC — protecting employers from personal liability.
Learn moreStatutory Liability Insurance
Cover for unintentional breaches of New Zealand law — including regulatory investigations and fines.
Learn moreBusiness Interruption Insurance
Replace lost income when an insured event forces your business to slow down or close.
Learn moreCommercial Property Insurance
Protect your business premises, contents, and assets from damage and loss.
Learn moreKey Coverage for Manufacturing Businesses
- Product Liability Insurance — covers injury or property damage caused by your products after they leave your premises
- Commercial Property Insurance — covers your factory, plant, equipment and raw material stocks
- Machinery Breakdown Insurance — covers sudden and unforeseen mechanical or electrical failure of key plant
- Business Interruption Insurance — replaces lost production income during repair or replacement periods
- Employer's Liability Insurance — covers WorkSafe-related claims and worker injury litigation
- Statutory Liability Insurance — covers regulatory investigations and fines under the Health and Safety at Work Act
Unique Risks for Your Industry
- →Product defects causing consumer injury or property damage
- →Product recalls — voluntary or mandated by regulators
- →Machinery failure halting production lines
- →Raw material contamination affecting the production batch
- →Supply chain disruption and consequential loss claims
Typical Premium Range
$5,000 – $50,000+ per year depending on plant value, product type and export markets
Premiums vary significantly based on your revenue, number of employees, claims history, specific activities and chosen cover levels. These figures are indicative guides — get a tailored quote for accurate pricing.
Insurance for Manufacturing and Production Businesses
Manufacturers and producers — food processors, timber mills, engineering workshops, electronics manufacturers, and pharmaceutical producers — face a distinctive and often complex set of insurance exposures. High capital asset values, product liability across extended supply chains, machinery-dependent revenue, and WorkSafe NZ's presence in every factory create a risk profile that demands specialist insurance structuring.
Product Liability: Your Biggest Exposure
When a product you manufacture causes injury or property damage after leaving your control, you face product liability claims. Product liability is typically included as part of a public liability insurance policy and covers consumer injury from defective products, property damage caused by faulty products, and claims from distributors and retailers.
Product liability claims can be catastrophic. A single food contamination incident or mechanical failure in an industrial component can generate claims in the millions. The liability attaches to you regardless of whether the defect arose from your process or a component supplier — you may have recovery rights against suppliers, but the initial claim comes to you.
Product Recall
Standard product liability insurance covers third-party claims but typically does not cover the cost of recalling the product itself. Specific product recall insurance covers the direct costs of withdrawing and replacing defective products: logistics, destruction, replacement, regulatory notification, and crisis communications. For food, pharmaceutical, and consumer goods manufacturers, this extension is essential.
Protecting Your Factory: Commercial Property
Commercial property insurance covers your factory buildings, machinery, raw materials, work-in-progress, and finished goods against fire, natural disasters, theft, and accidental damage.
Underinsurance is the most common issue in manufacturing property insurance. Building costs and machinery replacement values have increased significantly. A factory costing $2 million to build in 2015 may cost $3.5 million to reinstate today. Ensure your sum insured reflects current reinstatement values — use a professional valuation every 3–5 years.
Machinery Breakdown: Revenue-Critical Cover
Machinery breakdown insurance covers sudden and unforeseen mechanical or electrical failure of plant and equipment — distinct from wear and tear, which is excluded. Key extensions:
- Increased cost of working: Extra costs to maintain output during breakdown (outsourcing, overtime)
- Deterioration of stock: Perishable stock lost due to refrigeration failure
Business Interruption: Protecting Revenue During Recovery
Manufacturing businesses cannot simply relocate during a claim. Production-line reinstatement, machinery lead times, and supply chain disruption mean recovery takes longer than most businesses estimate. Business interruption insurance replaces lost production revenue and covers fixed ongoing costs during recovery.
For manufacturers with specialised machinery, a 24-month indemnity period is typically the minimum. Consider contingent BI cover for losses arising when a key supplier suffers an insured event — a fire at a sole-source component supplier can halt your production even if your premises are undamaged.
WorkSafe NZ and Statutory Liability
Factories carry significant health and safety risk. Statutory liability insurance covers WorkSafe investigation and prosecution defence costs, fines under the Health and Safety at Work Act 2015 (where legally insurable), and investigations under the Resource Management Act and Hazardous Substances and New Organisms Act.
Employers liability insurance covers hearing damage from industrial noise, respiratory conditions from chemical or dust exposure, musculoskeletal injuries from repetitive tasks, and mental health claims linked to high-pressure production environments.
Export Markets and Territorial Coverage
If you export to Australia, the UK, Europe, or the United States, your product liability coverage must extend to those jurisdictions. US and Canadian product liability litigation can generate claims that dwarf those in NZ. If you export to these markets, discuss territorial coverage requirements with your broker explicitly.
Directors and Officers in Manufacturing Companies
Manufacturing businesses often carry significant debt and have complex governance structures. Directors and officers liability insurance protects your leadership team from personal liability arising from lender and creditor claims, shareholder disputes, environmental compliance failures, and WorkSafe officer prosecution under the HSWA.
Typical Premium Ranges
- Small manufacturer (< $2M revenue): $5,000 – $15,000 pa
- Medium manufacturer ($2M–$10M revenue): $15,000 – $50,000 pa
- Large manufacturer (> $10M revenue): $40,000 – $150,000+ pa
- Food manufacturer (product recall): Add $3,000 – $15,000+ for product recall cover
Manufacturing & Production Insurance — FAQs
What is the difference between product liability and public liability for manufacturers?
Public liability covers injury or damage that occurs at your premises or because of your operations, while product liability covers injury or damage caused by your products after they have left your control. For manufacturers, both are important — public liability covers the factory environment, while product liability covers claims arising from defective products in the hands of consumers, wholesalers or retailers. Most combined business policies include both.
What does a product recall cost and does insurance cover it?
Product recalls can be enormously expensive — a single voluntary food recall in New Zealand can cost hundreds of thousands of dollars in logistics, destruction, notification and regulatory compliance. Standard product liability policies cover third-party claims but typically do not cover the recall costs themselves. Specific product recall insurance or a product recall extension must be added to cover the expense of withdrawing and replacing defective products.
Does machinery breakdown insurance cover wear and tear?
No. Machinery breakdown insurance covers sudden and unforeseen breakdown of plant and equipment — such as a motor burning out or a gear failure — but does not cover gradual deterioration, wear and tear, or damage from lack of maintenance. Regular preventive maintenance records are important both to keep machinery operational and to ensure claims are not declined due to neglect.
We export products to Australia — does NZ product liability cover overseas claims?
NZ-issued product liability policies can often be extended to cover products exported to Australia and other markets, but you should confirm the territorial scope with your insurer. Australian product liability claims can be filed under Australian consumer law, and coverage must explicitly include Australian jurisdiction. Some international markets, particularly the US and Canada, may require separate policies or specific high-limit cover.
How is business interruption calculated for a manufacturer?
For manufacturers, business interruption is typically calculated on gross profit or turnover lost during the indemnity period, plus any increased costs of working to maintain production (such as outsourcing or expedited parts). The indemnity period — how long the policy pays out — should reflect the realistic time to repair or replace key machinery and resume full production. Underestimating this period is a common mistake.
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