In the marine manufacturing industry, supply chain reliability isn’t just about meeting deadlines — it’s about managing complex liability exposures that can threaten your entire operation. That’s why marine manufacturers‘ insurance is so important.

From defective components to shipping mishaps, marine manufacturers face unique risks at every stage of production and distribution. So, how do marine manufacturers reduce liability in the supply chain? Being properly insured is a good start.

What Risks Do Marine Manufacturers Face in the Supply Chain?

Marine manufacturers can get walloped in a variety of ways. When you build boats, engines, or marine equipment, you’re accountable not only for your own workmanship but also for the components you install. 

A defective propeller shaft from a subcontractor can cause catastrophic failure on the water, leading to injury claims against your company. Or if a faulty electrical system sparks a fire, you could face liability even when the issue traces back to a third-party supplier. 

Then there are logistics and transit risks, such as damaged goods, shipping delays, and cargo theft. When a custom yacht arrives damaged, the finger-pointing begins: manufacturing defect or shipping issue? Even if you’re in the clear, those disputes can be expensive to resolve.

Add to that a maze of regulatory and contractual obligations. Noncompliance with Coast Guard, Environmental Protection Agency, or industry standards can result in fines, recalls, and liability claims. Supplier and dealer contracts may also hide indemnification clauses that expand your exposure.

How Insurance Helps Reduce Supply Chain Liability

General liability and marine insurance forms the foundation of your protection, covering bodily injury and property damage claims arising from your operations. But marine manufacturers need additional specialized coverages.

• Products liability: Protects against claims stemming from defective products after they leave your facility
• Marine bailee: Adds a layer of protection when you have custody of customer property for repairs, modifications, or storage, protecting you in case of damage to boats or equipment in your care
• Hull builders’ risk: Protects vessels under construction against damage from fire, theft, vandalism, and other covered perils
• Pollution liability: Covers cleanup costs and third-party claims if your operations result in fuel spills, chemical releases, or other environmental damage
• Commercial auto: Protects your fleet vehicles used for deliveries, pickups, and business operations, extending your liability protection beyond the manufacturing facility
• Bumbershoot and excess liability: An umbrella policy that provides crucial coverage for large-scale claims that exceed your primary policy limits

These policies provide broader coverage than primary policies, filling gaps that might otherwise leave you exposed.

Risk Management Beyond Coverage

While comprehensive insurance is essential, the most effective approach to reducing supply chain liability combines coverage with proactive risk-management practices.

Quality Control and Safety Programs

Implementing rigorous quality control procedures helps identify defects before products reach customers. Regular safety audits of your manufacturing processes can reveal potential hazards and compliance gaps before they result in accidents or regulatory violations.

Supplier Vetting and Partnerships

Establish clear standards for supplier selection, including requirements for quality certifications, insurance coverage, and safety records. Regular supplier audits help ensure continued compliance with your standards. Consider requiring key suppliers to name your company as an additional insured on their liability policies.

The Combined Approach

Insurance and prevention work together synergistically. Your insurance provider can often assist with loss control services, offering expertise in identifying risks and implementing safety measures.

Protecting Your Marine Manufacturing Business

Marine manufacturers face complex risks that extend from component sourcing to final delivery. Standard business insurance often falls short when it comes to the specialized exposures inherent in building vessels and marine equipment.

Don’t leave your operations vulnerable to unexpected losses. Partner with Mariners Insurance for specialized marine manufacturers coverage that safeguards your business and supports your success. Request a quote today.

About Mariners General Insurance Group

Mariners General Insurance Group was founded in 1959 to protect boat owners and marine business clients. We are marine insurance experts and insure boats worldwide — in every ocean on the planet. Marine insurance is critical if you own a boat or nautical business. Trust the professionals with all of your boat insurance needs — trust Mariners Insurance. Call us at (888) 402-5018 any time you have questions or concerns about insurance for your vessel or marine business.