The Korea Federation of Small and Medium Enterprises said on the 14th it will offer a 5% discount on premiums for product liability (PL) insurance and mutual aid products to small and mid-sized manufacturers that have built smart factories.
The Korea Federation of Small and Medium Enterprises will discount premiums for small and mid-sized manufacturers that took part in the smart factory construction support program. The aim is to ease the insurance burden on corporations that improved productivity and process efficiency, helping bolster manufacturing competitiveness.
The Korea Federation of Small and Medium Enterprises PL insurance is the nation's first group insurance jointly developed in 1999 with the Ministry of SMEs and Startups. It covers third-party liability for damages from product defects. Operated through a joint purchasing model, premiums are up to 20–28% cheaper than those of general insurers. Corporations that have built smart factories can receive an additional 5% discount on top of that.
The discount also overlaps with PL insurance premium support programs run by 13 local governments nationwide, including Seoul, Busan, Ulsan, Daegu, and North Gyeongsang. Depending on the local government, 10–30% of the paid premium (up to 1 million won) is subsidized, which is expected to reduce the actual premium burden.
A 5% discount also applies to mutual aid products that cover fire, property damage, and general liability. Mutual aid products are 10–25% cheaper than those of general insurers, and they also narrowed blind spots by minimizing subscription restrictions for high-risk sectors that general insurers find difficult to underwrite, such as wood processing and plating.
For the Korea Federation of Small and Medium Enterprises' PL insurance and mutual aid, six major non-life insurers jointly participate to provide claims handling and compensation services. To receive the discount, submit a "certificate of participation in the smart factory construction support program" when enrolling in a product.
Yang Chan-hoe, executive managing director at the Korea Federation of Small and Medium Enterprises, said, "With this discount, we hope small and mid-sized manufacturers that have adopted smart factories can focus on strengthening management stability by preparing for risks and accelerating manufacturing innovation."