Manufacturing Insurance in El Paso, Texas

Frequently Asked Questions El Paso Manufacturers Ask About Government Contract Requirements, Cargo Coverage, and Workers’ Comp Opt-Out Risk in Texas

Is workers’ compensation insurance required for manufacturers in Texas?

No. Texas is the only state where workers’ compensation is optional for most private employers. However, opting out carries serious legal and financial consequences. Non-subscribing manufacturers lose all common law defenses and face unlimited tort liability for workplace injuries. 

An injured employee can sue you directly for full damages, including pain and suffering and punitive damages, with no statutory cap. Government contracts in Texas typically mandate workers’ comp at statutory benefit levels, and many large commercial customers require it from suppliers and subcontractors.

Senate Bill 338 now requires comprehensive workers’ comp for all building contractors in construction-related manufacturing regardless of company size. We recommend that every El Paso manufacturer model the financial risk of both options before making this decision.

What happens if my El Paso factory is shut down by an ERCOT power outage?

Most standard business interruption policies do not cover losses caused by off-premises utility failures, including ERCOT grid outages. Winter Storm Uri proved this to thousands of Texas manufacturers in 2021. 

To close this gap, your policy needs a utility services — time element endorsement that specifically extends business interruption coverage to losses caused by interruption of electrical power, gas, water, or telecommunications services originating away from your premises. We review this endorsement language on every manufacturing policy we place because the default coverage leaves El Paso manufacturers exposed to the exact scenario Texas has already experienced.

How much does manufacturing insurance cost in El Paso, Texas?

Annual premiums for Texas manufacturers typically range from $15,000 to $50,000 depending on the size of your operation, your industry sector, your claims history, and the coverage limits you select. 

The primary factors that drive your premium include total payroll, annual revenue, experience modification factor, the specific hazards of your production processes, the value of your building and equipment, and your geographic exposure to severe weather. 

As an independent agency, we reduce your cost by forcing carriers to compete for your business — a dynamic that does not exist when you work with a single-carrier agent.

Does my manufacturing insurance cover product recalls?

Standard general liability policies typically exclude the cost of a product recall. If your El Paso operation manufactures components or finished goods that enter a regulated supply chain — automotive, aerospace, food, pharmaceutical, or consumer products — a standalone product recall policy is the only way to cover the costs of notification, retrieval, disposal, and replacement. 

Product liability insurance covers third-party injury and damage claims from defective products, but it does not pay for the recall itself. These are two separate exposures that require two separate coverages.

How does hurricane and flood damage affect my manufacturing insurance in El Paso?

Wind damage from hurricanes and flood damage are typically covered under separate policies or endorsements with their own deductibles, and many manufacturers do not realize this until they file a claim. 

Named-storm deductibles in Texas are often calculated as a percentage of the insured property value rather than a flat dollar amount, which can result in significantly higher out-of-pocket costs than expected. 

Flood insurance may be available through the National Flood Insurance Program or through private flood carriers, each with different limits and terms. 

We review these provisions annually for every El Paso manufacturer we insure because a policy that looked adequate last year may have gaps today if your property values or flood zone designations have changed.