CORK PRODUCTS
Category: Manufacturing

SIC CODE: 2499 Wood Products NEC

NAICS CODE: 321999 All Other Miscellaneous Wood Product Manufacturing

Suggested ISO General Liability Code: 59985, 59986

Suggested Workers Compensation Code: 2841

DESCRIPTION OF OPERATIONS

Cork product manufacturers import raw cork from countries that border the Mediterranean. Raw cork is harvested annually from the trunk of the cork oak tree. The slabs of raw cork may be cured in the open for up to six months to strengthen them. This curing may be done at the point of origin or by the cork products manufacturer. The slabs are softened by boiling or placing them into a chemical bath. After drying, they are cut and formed into end products. Any remaining cork is ground, mixed with adhesives or binders, formed into shapes, and then baked. A vinyl coating may be added to seal the cork and make cleaning easier.

Cork is buoyant, compressible, impermeable to gases or liquids, and resistant to fire, insects, moisture, rot, and wear. Products made from cork include acoustic or decorative tiles, bottle stoppers, bulletin boards, flooring and wall tiles, personal flotation devices, purses, shoe insoles, thermal insulation, and sporting goods such as baseball and cricket ball cores, handles for fishing rods, and helmet cushioning. Cork has recently been used in “green” construction as insulation and roofing. Cork can be recycled.

PROPERTY EXPOSURES

Consist of an office, shop, warehouse for finished goods, and a yard for storage of cork that is being seasoned. While cork is not flammable, the adhesives and binders used to process ground cork can cause fire and explosion. These should be adequately labeled, separated, and stored away from other operations in approved containers. The processes involved in producing the cork product involve machinery that must be maintained to prevent fires.

Wiring for equipment must be up to date and meet current codes. Cork stored in the open may attract thieves. Appropriate security measures, including lighting and physical barriers, should be in place to prevent unauthorized access.

BUSINESS INCOME AND EXTRA EXPENSE EXPOSURES

Can be high if backup facilities are unavailable and a lengthy amount of time is required to restore operations.

EQUIPMENT BREAKDOWN EXPOSURES

Include malfunctioning production equipment, electrical control panels, and other apparatus. These should be properly maintained and records kept in a central location. Production equipment may include CNC (computer controlled) machinery. Breakdown and loss of use to the production machinery could result in a significant loss, both direct and under time element.

INLAND MARINE EXPOSURES

Include accounts receivable if the manufacturer offers credit, computers (which may include computer-run production equipment), goods in transit, and valuable papers and records for customers', suppliers', and quality control information.

Backup copies of all records should be made and stored off premises. Goods in transit can be damaged by fire, theft, water, wind, collision, and upset. There may be an ocean marine cargo exposure if the manufacturer owns the imported cork. The manufacturer's goods may be on exhibit at trade fairs.

CRIME EXPOSURE

Comes from employee dishonesty. 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 reconciling bank statements. The manufacturer should have security methods in place to prevent theft. Physical inventories should be conducted regularly to prevent employee theft of equipment. Annual outside audits should be conducted.

PREMISES LIABILITY EXPOSURE

Is normally low as access by visitors is limited. If tours are given or a retail outlet on the premises, visitors must be confined to designated areas. To prevent slips, trips, or falls, all areas accessible to the public must be free of obstacles, with floor coverings in good condition. The number of exits must be sufficient and well-marked, with backup lighting in case of power failure. There should be a disaster plan for unexpected emergencies.

Parking lots and sidewalks need to be in good repair with snow and ice removed, generally level and free of exposure to slips and falls. The storage of cork in the open could pose an attractive nuisance hazard. The yard should be fenced with proper lighting and warnings. Fire and fumes or vapors from coating and finishing operations may reach neighboring premises.

If the manufacturer does installations, there may be frequent small property damage claims. If there is a railroad sidetrack or dock, an employee must verify that no one is in the path of an incoming or outgoing train.

PERSONAL AND ADVERTISING INJURY EXPOSURES

Include allegations of assault and battery, breach of confidentiality, copyright or trademark infringement, defamation if misleading statements are made about competitors, false advertising, and wrongful ejection from the premises.

PRODUCTS LIABILITY EXPOSURE

Depends on the type of product that is manufactured. The exposure can be very low for consumer products such as acoustic flooring or wall tiles or very high for safety devices such as life preservers and life jackets. 

ENVIRONMENTAL IMPAIRMENT EXPOSURE

Is usually low to moderate because cork is a natural product that is nontoxic, nonflammable, and biodegradable. Disposal of adhesives and binders may contaminate air, ground, or water. Spillage and leaking of pollutants can result in high cleanup costs and fines. Storage and disposal procedures must adhere to all EPA and other regulatory standards.   

AUTOMOBILE EXPOSURE

Is high if the manufacturer transports its finished goods or picks up raw materials. Manufacturers generally also have private passenger fleets used by sales representatives. There should be written procedures regarding the private use of these vehicles by others. Each driver 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

May be high. Injuries from production machinery are common, as are cuts, puncture wounds, slips, trips, falls, electrical shocks, foreign objects in the eye, back injuries from lifting, hearing loss from noise, and repetitive motion injuries. Workstations should be ergonomically designed. Exposure to binding agents or cork dust can cause eye, lung, and skin irritation.

Workers should be aware of any chemical's toxic nature and should be made fully aware of the need to watch for early signs and symptoms of problems that can lead to occupational disease. There should be safety training and personal protection equipment. Areas that generate dust require respiratory protection devices, eye protection and eye wash stations. Drivers of forklifts and vehicles may be injured in accidents.

MINIMUM RECOMMENDED COVERAGE

· Building

· Business Personal Property

· Business Income with Extra Expense

· Equipment Breakdown

· Accounts Receivable

· Computers

· Goods in Transit

· Valuable Papers and Records

· Employee Dishonesty

· General Liability

· Employee Benefits

· Environmental Impairment

· Umbrella

· Hired and Nonownership Auto

· Workers Compensation

OTHER COVERAGES TO CONSIDER

· Earthquake

· Flood

· Exhibitions

· Ocean Marine Cargo

· Active Shooter

· Cyberliability

· Employment-related Practices

· Business Auto Liability and Physical Damage

· Stop Gap Liability

Edition 2024