Manufacturing & Wholesaling Insurance Packages

Making goods and moving goods are different risks. A fabricator's biggest exposure is the plant and the machines in it. A food processor's is contamination and recall. A distributor's is the stock in the warehouse and the trucks. An importer carries the product liability of a maker it may never meet. Many businesses do more than one of these, and the program has to follow each one.

Most manufacturing and wholesale programs are built from the same blocks. The skill is in the limits, the valuation and the extensions, because those are where claims get cut down.

Our CGL coverage guide covers the base liability form in detail, and the rest of this page explains the exposures that make a manufacturing program different.

A product liability claim alleges that something you made, assembled, labelled or sold caused injury or property damage. It can be a component that fails inside a customer's machine, a ladder that collapses, or a food that makes someone ill. The claim often arrives long after the sale, so the policy in force when the claim is made, and the records you kept, both matter.

Products cover sits inside the CGL as the products and completed operations section, usually with its own aggregate limit. Four details decide whether it responds the way you expect:

Read customer supply agreements before signing. Many include indemnities, minimum limits and waiver of subrogation clauses that go beyond what a standard CGL provides. Our guide to product liability for makers and brands covers the exposure from a smaller maker's side.

Recall duties in Canada depend on what you make. Consumer products fall under the federal Canada Consumer Product Safety Act (CCPSA). Food falls under the Safe Food for Canadians Regulations (SFCR), enforced by the Canadian Food Inspection Agency. Both create obligations that start the moment you learn of a problem.

Under the CCPSA, an incident includes a recall or safety measure taken by a foreign government. A US recall of your product can therefore trigger a Canadian reporting duty.

A recall is expensive even when nobody is hurt: customer notification, retrieval, destruction, replacement product and lost sales. CGL excludes those costs. Product recall insurance pays them, and better wordings add crisis consultants and cover for your customers' recall costs. Our recall playbook walks through preparation before, during and after a recall.

An injured Canadian who can't practically sue a foreign manufacturer will usually sue the Canadian business that brought the product in. As an importer you may stand in the maker's shoes for liability, and under the CCPSA you take on the manufacturer's written reporting duty when the maker operates outside Canada.

Protect yourself on three fronts. Insure your own products liability on a wording that names imported goods. Ask foreign suppliers for proof of their own product liability coverage, with your business added as a vendor or additional insured, and check whether it would respond to a claim in Canada. Then write indemnities into purchase agreements, while accepting that an indemnity from a supplier with no Canadian assets may be hard to collect.

Exports raise the opposite problem. Products sold into the United States can be sued on in US courts, where defence costs and awards follow US norms. Insurers rate US product sales separately, and some decline them. Disclose US sales accurately, confirm the policy territory, and consider higher umbrella limits. Our cross-border insurance services cover the coverage and placement questions for businesses selling south.

Stock is often the largest asset a wholesaler or manufacturer owns, and it rarely sits still. Statistics Canada put total manufacturers' inventories at $127.7 billion in August 2026, on an upward trend since January. A limit set in January can be far too low by the pre-holiday peak, and far too high in spring.

Three tools solve this. A peak-season endorsement raises the stock limit for set months. A reporting form lets you report actual values monthly or quarterly and pay premium on what you really held, but late or understated reports can cut a claim. A stock throughput or blanket limit covers stock across locations without a fixed amount at each one.

Many plants lose more from downtime than from physical damage. A failed motor on a production line can stop output for weeks while a replacement ships from overseas. Equipment breakdown insurance pays to repair or replace the machine and, when you add it, the lost income and extra expense during the outage. Expediting costs, such as air freight for parts, are worth adding. Our article on how equipment breakdown cover works explains where it sits between property cover and the manufacturer's warranty.

Food processors and cold-storage distributors need spoilage cover for stock lost when refrigeration fails, through breakdown, power interruption or contamination by refrigerant. Check whether off-site power failure is covered, because many wordings limit it.

Supplier failure is the exposure most programs miss. Contingent business interruption pays your lost income when an insured loss at a key supplier or customer stops your production. Name the suppliers you depend on most, especially single-source ones, because many policies cover only scheduled locations or apply a low limit to unnamed ones. Our guide to business interruption basics explains how indemnity periods and waiting periods work.

Stock is exposed every time it moves: on your own trucks, with a for-hire carrier, at a cross-dock, in a container from Asia, or on its way to a US customer. Each stage can sit under a different policy, or none.

Carriers' liability for lost or damaged freight is usually limited under standard conditions of carriage, often by weight, unless you declare a higher value and pay for it. For high-value goods, that limit can be a small fraction of the invoice. Your own cargo policy fills the gap, and an inland transit or motor truck cargo form covers goods on your own vehicles. For imports and exports, a marine cargo policy follows the shipment warehouse to warehouse, and the sale terms decide who bears the risk at each point.

If you run your own delivery fleet, the vehicles themselves need commercial truck insurance. Our post on cargo coverage for peak shipping season covers the busiest quarter of the year.

Plants that store fuel, solvents, coolants, chemicals or process waste carry pollution risk that standard CGL and property policies largely exclude. Provincial environmental laws can make the owner and the person in control of a spilled pollutant responsible for the cleanup. In Ontario, the Environmental Protection Act requires them to do everything practicable to prevent, eliminate and ameliorate the adverse effect.

Those duties can outlast the event. In Huang v. Fraser Hillary's Limited, an Ontario court awarded more than $1.8 million against a dry cleaner over contamination from spills dating back to the 1960s and 1970s, and the Court of Appeal upheld the finding that the obligation to remediate was ongoing. Pollution liability cover for your premises, and contractors' or transportation pollution cover where it applies, pays for cleanup and third-party claims. If you are buying or leasing an industrial site, a baseline environmental assessment protects you from inheriting someone else's contamination.

Property is priced per $100 of insured value using COPE: construction, occupancy, protection and exposure. In manufacturing, occupancy carries the most weight. Woodworking, plastics, foam, coatings and processes with combustible dust or open flame rate higher than assembly or dry warehousing. Liability is priced mainly on sales, split by product class and by where the products go, with US exports rated separately.

Market conditions currently favour buyers. Marsh's Global Insurance Market Index put Canadian commercial property rates down 8% in the third quarter of 2026, with overall commercial rates down 6%. That is a good time to fix limits and add missing coverages. See how hard and soft markets move premiums for why rates shift without a claim.