SHOES–LEATHER
Category: Manufacturing

SIC CODE: 3131 Boot and Shoe Cut Stock and Findings
3142 House Slippers

3143 Men’s Footwear, except Athletic

3144 Women’s Footwear, except Athletic

3149 Footwear, except Rubber, Not Elsewhere Classified

NAICS CODE:   316210 Footwear Manufacturing

Suggested ISO General Liability Code: 59005

Suggested Workers Compensation Code: 2651, 2660

Description of operations: Leather shoe manufacturers receive processed animal hides from tanneries and produce shoes and boots whose uppers include leather. The soles may be made of leather, rubber or man-made materials such as plastics. The process consists of designing the shoes or boots, cutting or punching the individual pieces, lacing or sewing the parts together, supplying trims or clasps, then attaching the uppers by adhesives to the soles. The shoes may be treated or given a finishing coat, then packaged for shipment. Although some automation may be possible in the cutting process, sewing of individual items is often a labor-intensive process.

Because of the varieties of materials and processes involved in production, the different phases of manufacture may be carried out in different locations or different countries.

Property exposures consist of an office, production plant, and warehouse for raw materials and finished goods. Ignition sources include electrical wiring, heating systems, and production machinery. Chemicals used in dyeing, finishing or tanning are often flammable and should be properly labeled, separated, and stored in approved containers. Cutting, punching, and buffing operations generate dust which can catch on fire. This hazard increases in the absence of well-maintained dust collection systems. Loose fibers and scraps from processing leather are combustible and will add to the fire load. Leather is susceptible to damage by fire, smoke, water and humidity. Poor housekeeping, such as failure to collect and dispose of scraps on a regular basis, could contribute significantly to a loss. Unless disposed of properly, greasy, oily rags (such as those used to clean machinery) can cause a fire without a separate ignition source. High-valued items may be targets for theft. In some areas, there may also be a vandalism exposure from PETA protesters. Appropriate security controls must be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.

Equipment breakdown exposures include malfunctioning production equipment, dust collection and ventilation systems, electrical control panels and other apparatus. These should be properly maintained and records kept in a central location.  

Crime exposure comes from employee dishonesty and theft due to the relatively high street value of leather items. Employees may act alone or in collusion with outsiders in stealing money, raw materials or finished stock. Background checks should be conducted on all employees. There must be a separation of duties between persons handling deposits and disbursements and handling bank statements. There should be security methods in place to prevent theft.

Inland marine exposures include accounts receivable if the manufacturer offers credit, computers (which may include computer-run production equipment), exhibitions, goods in transit, and valuable papers and records for customers' and suppliers' information. Backup copies of all records should be made and stored off premises. Goods in transit may be damaged by fire, collision, overturn, theft, and water damage. Because of the high market value of leather goods, vehicles should be locked, fitted with alarms, and not left unattended once loaded or during transport.

Premises liability exposure is normally low due to limited access by visitors. If the manufacturer has a showroom or offers tours, visitors may be injured by slips, trips, or falls. Chemicals used in finishing may be corrosive and/or toxic. Fumes, spills or leaks may cause serious injury or property damage to neighboring premises. 

Products liability exposure is normally moderate. The shoe may slip and contribute to slip and fall, which may cause sprains, strains, and fractures. The exposure increases if the manufacturer produces shoes based on prescriptions from podiatrists or other types of made-to-order or one-of-a-kind footwear.

Environmental impairment exposure is light unless the manufacturer performs any leather dyeing, finishing, or tanning. Fumes and improper disposal of scrap can result in air, ground, or water contamination. Disposal procedures must adhere to all EPA and other regulatory standards.

Automobile exposure may be high if the manufacturer transports raw materials or finished products. Manufacturers generally have private passenger fleets used by sales representatives. There should be written procedures regarding the private use of these vehicles by others. Drivers should have an appropriate license and an acceptable MVR. All vehicles must be well maintained with documentation kept in a central location.

Workers compensation exposures can be moderate to high. Injuries from production machinery are common, as are puncture wounds, burns, cuts, slips, trips, falls, foreign objects in the eye, hearing loss from machinery noise, and back injuries from lifting. Employees should be provided with safety training and protective equipment. Areas that generate dust require respiratory protection devices, as well as eye protection and eye wash stations. Flammable liquids and chemicals used for dyeing, finishing or tanning can cause skin irritation, eye irritation, and possible long-term occupational disease. The high volume required for production schedules may lead workers to remove guards on the machinery, or to postpone maintenance and repair. Repetitive motion injuries can result from the ongoing use of machinery. Workstations should be ergonomically designed. Safety consciousness and commitment of management, especially in the form of ongoing enforcement and awareness programs, are important considerations. A large amount of the piece work may be done by individuals whose status (employee or independent contractor) must be clear.

Minimum recommended coverage:

Building, Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Employee Dishonesty, Accounts Receivable, Computers, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits Liability, Environmental Impairment Liability, Umbrella Liability, Hired and Nonownership Auto Liability, Workers Compensation

Other coverages to consider:

Earthquake, Flood, Exhibitions, Cyberliability, Employment-related Practices Liability, Business Auto Liability and Physical Damage, Stop Gap Liability

SHOES–PLASTIC OR RUBBER
Category: Manufacturing

SIC CODE: 3021 Rubber and Plastics Footwear

NAICS CODE: 316210 Footwear Manufacturing

Suggested ISO General Liability Code: 59005

Suggested Workers Compensation Code: 4410

Description of operations: Non-leather shoe manufacturers produce shoes and boots having uppers made of fabric or a man-made material. The soles are made of vulcanized rubber or of plastic. If made of rubber, raw latex is milled (chopped and mixed), combined with sulfur for vulcanization, and heated before being formed into soles by extrusion or molding. Plastics are heated and extruded or molded into soles.

The manufacturing of the uppers consists of designing the shoes or boots, cutting or punching the individual pieces, lacing or sewing the parts together, supplying trims or clasps, then attaching the uppers by adhesives to the soles. The item may be treated or given a finish, then packaged for shipment. Because of the varieties of materials and processes involved in production, the different phases of manufacture may be carried out in different locations or different countries.

Property exposures consist of an office, production plant, and warehouse for raw materials and finished goods. Ignition sources include electrical wiring, heating systems, and production machinery. Cutting, punching, and buffing operations generate dust which can catch on fire. This hazard increases in the absence of well maintained dust collection systems. Loose fibers and scraps from processing are combustible and will add to the fire load. Poor housekeeping, such as failure to collect and dispose of scraps on a regular basis, could contribute significantly to a loss.  Unless disposed of properly, greasy, oily rags (such as those used to clean machinery) can cause a fire without a separate ignition source. Fire hazards are generally high due to the vulcanization chemicals and processes. If the stock catches fire, it can be very difficult to extinguish due to the heavy black smoke which results in a great deal of smoke damage. Machinery needs proper maintenance to prevent overheating and wear. Fuel sources to run machinery and the heat plant must be adequately controlled. High-valued items may be subject to theft. Appropriate security controls must be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.

Equipment breakdown exposures include malfunctioning production equipment, dust collection and ventilation systems, electrical control panels and other apparatus. These should be properly maintained and records kept in a central location. 

Crime exposure comes from employee dishonesty and theft. Employees may act alone or in collusion with outsiders in stealing money, raw materials or finished stock. Background checks should be conducted on all employees. There must be a separation of duties between persons handling deposits and disbursements and handling bank statements. There should be security methods in place to prevent theft.

Inland marine exposures include accounts receivable if the manufacturer offers credit, computers (which may include computer-run production equipment), exhibitions, goods in transit, and valuable papers and records for customers' and suppliers' information. Backup copies of all records should be made and stored off premises. Goods in transit may be damaged by fire, collision, overturn, theft, and water damage. Because of the high market value of some shoes and boots, vehicles should be locked, fitted with alarms, and not left unattended once loaded or during transport.

Premises liability exposure is normally low due to limited access by visitors. If the manufacturer has a showroom or offers tours, visitors may be injured by slips, trips, or falls. Chemicals used in processing may be corrosive and/or toxic. Fumes, spills or leaks may cause serious injury or property damage to neighboring premises. In the event of a fire, the difficulty in extinguishing it could result in smoke damage to neighboring property. Evacuation plans should be on file with the fire department.

Products liability exposure is normally moderate. The shoe may slip and contribute to slip and fall, which may cause sprains, strains, and fractures. The exposure increases if the manufacturer produces shoes based on prescriptions from podiatrists or other types of made-to-order or one-of-a-kind footwear.

Environmental impairment exposure is high due to possible contamination of ground, air and water from raw chemicals in the rubber or plastics, plus the actual processing and the final products. The catalysts may be caustic, and the final product is usually not biodegradable. Disposal procedures must adhere to all EPA and other regulatory standards.

Automobile exposure may be high if the manufacturer transports raw materials or finished products. Manufacturers generally have private passenger fleets used by sales representatives. There should be written procedures regarding the private use of these vehicles by others. Drivers should have an appropriate license and an acceptable MVR. All vehicles must be well maintained with documentation kept in a central location.

Workers compensation exposure can be moderate to high. Injuries from production machinery are common, as are puncture wounds, burns, cuts, slips, trips, falls, foreign objects in the eye, hearing loss from machinery noise, and back injuries from lifting. Employees should be provided with safety training and protective equipment. Areas that generate dust require respiratory protection devices, as well as eye protection and eye wash stations. Flammable liquids and chemicals used for vulcanization or finishing can cause skin irritation, eye irritation and possible long-term occupational disease. The high volume required for production schedules may lead workers to remove guards on the machinery, or to postpone maintenance and repair. Repetitive motion injuries can result from ongoing use of machinery. Workstations should be ergonomically designed. If there is a fire on premises, the fumes in the smoke are very dangerous and can cause severe respiratory distress. Dense smoke makes egress from the premises difficult.

Safety consciousness and commitment of management, especially in the form of ongoing enforcement and awareness programs, are important considerations. A large amount of the piece work may be done by individuals whose status (employee or independent contractor) must be clear.

Minimum recommended coverages:

Building, Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Employee Dishonesty, Accounts Receivable, Computers, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits Liability, Environmental Impairment Liability, Umbrella Liability, Hired and Nonownership Auto Liability, Workers Compensation

Other coverages to consider:

Earthquake, Flood, Exhibitions, Cyberliability, Employment-related Practices Liability, Business Auto Liability and Physical Damage, Stop Gap Liability