How to Protect your Factory from Financial Loss

Keeping any business in the black is hard enough, but avoiding financial losses can be especially difficult for manufacturers. Fortunately though, there are ways to minimise risks in this sector. Keep reading for some effective tips on how to protect your factory from financial difficulties.

Manufacturing business protection

Make sure you have a backup power supply

A power cut can spell disaster for most firms these days, but the costs mount up particularly quickly for manufacturers. If the mains supply was cut off to your facility and your machines and workers were plunged into darkness, you’re likely to experience a considerable loss of productivity – and ultimately of profits. One company that knows this only too well is plastics manufacturer Nifco. Last year, the business’s plant in Stockton, England, experienced losses of over £50,000 ($76,000) as a result of a power outage that lasted for five and a half hours.

There is always a risk that mains electricity will be cut, so to ensure your operations don’t grind to a halt in these situations, it’s wise to have a backup generator in place. As a manufacturer, your electricity needs are likely to be considerable, but luckily it is now possible to access high-power standby solutions. Suppliers such as ADE Ltd offer everything from small generators to 3500kVA systems.

Take out suitable insurance

It’s important to think carefully about your insurance too. Financial cover does cost, but it can save you potentially large sums of money in the long term. Most businesses with staff members are required by law to have employers’ liability insurance, but there are a range of other policies that can prove to be important as well.  For example, if you’re producing goods for the general public, you may benefit from having product liability insurance. This can cover any legal costs and damages if people sue your company claiming that you have provided defective goods. It’s worth considering getting a public liability policy too. This is especially important if members of the public visit your premises.

business insurance protection

Then of course there is contents insurance. When you’re selecting these policies, make sure they accurately reflect the value of your equipment, and read through the small print so that you don’t experience any nasty surprises if you need to make a claim.

Always uphold health and safety laws

Upholding all the relevant safety standards is also crucial if you’re to protect your factory from financial strife. After all, if your business is found to be flouting safety laws, you could find yourself facing long and costly legal proceedings. Also, if someone is injured as a result of safety lapses, you may be subject to potentially substantial compensation claims. Meanwhile, the reputational damage that these infringements can inflict on your firm could cause your sales levels to fall, resulting in long-term losses. With this in mind, it’s important to make sure you stick to the letter of the law when it comes to health and safety.

Avoiding financial loss will always present a challenge for factory owners, but as these points demonstrate, there are effective ways to reduce the risks.