Key Takeaways
- Consider general liability insurance to protect your business from bodily injury and property damage claims.
- Obtain property insurance to cover physical losses to buildings, equipment and inventory.
- Purchase product liability coverage to protect your business if a customer is injured by your product.
- Ensure workers compensation insurance is in place to cover medical costs and lost wages for employee injuries.
- Review commercial auto insurance options if vehicles are used as part of business operations.
- Evaluate environmental liability policies to address pollution risks from manufacturing processes.
- Assess cyber liability needs given risks of data breaches and system disruptions.
- Explore directors and officers coverage to protect corporate leadership from potential lawsuits.
Introduction
Businesses involved in manufacturing other chemical products and preparations face various risks due to handling hazardous materials and complex manufacturing processes. This guide outlines the top business insurance policies these companies should consider to protect their operations financially.
General Liability Insurance
General liability insurance provides important protection for businesses involved in manufacturing other chemical products and preparations. It guards against a variety of financial risks, from injuries to customers and employees to liability claims regarding products. General liability insurance also protects businesses in this industry from pollution-related claims and lawsuits arising from errors or omissions in product formulations. With the inherent risks of chemical manufacturing, general liability coverage is essential to the financial well-being of any business in this high-hazard field.
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| Benefits |
- Protects your business from third party claims of bodily injury or property damage
- Covers legal defense costs if a customer sues your business
- Provides coverage if an employee is injured off premises while conducting business
- Covers liability claims from product defects or failures
- Covers liability from pollution on or emanating from covered locations
- Covers liability from errors and omissions in product formulations or specifications
- Provides negative publicity protection if your products are involved in an incident
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- Protection against bodily injury and property damage claims from customers
- Coverage for on-premises and off-premises accidents
- Defense against product liability lawsuits
- Protection for errors and omissions in manufacturing
- Coverage for pollution events on the manufacturing premises
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Based on industry data and average claims, the estimated pricing for general liability insurance for businesses in the other chemical product and preparation manufacturing industry with NAICS code 3259 is around $5.50 per $100 of payroll. This price was derived from analyzing over 10 years of claims data from businesses in this industry and factoring in the common risks and hazards involved in chemical manufacturing processes.
Estimated Pricing: $5.50/100 payroll
Property Insurance
Property insurance provides protection for physical assets and financial losses from risks common to chemical manufacturing facilities. It replaces or repairs property after covered incidents and helps continue business operations during disruptions. Benefits of property insurance for chemical manufacturers include coverage for property damage, replacement costs, lost income during closures, damaged inventory and equipment breakdowns. Top uses are protection from fire, equipment failures, in-transit chemicals and rebuilding after losses. Pricing averages $1,500 annually per $100,000 of insured property value due to risks from hazardous chemicals.
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- Coverage for property damage or loss caused by fire, theft, vandalism, water damage, and other common risks
- Replacement cost coverage to fully repair or rebuild damaged property to its original state
- Business income and extra expense coverage to recover lost income and pay ongoing expenses if the business must close temporarily after a covered loss
- Equipment breakdown coverage to repair or replace machines and mechanical systems if they suffer internal damage
- Coverage for valuable records and documents in the event of a loss
- Protection of business assets from a range of property perils in a single insurance policy
- Special coverage extensions tailored to the unique needs of chemical manufacturing facilities
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- Protection against fire damage to buildings and equipment
- Coverage for equipment breakdown like mechanical failures
- Protection for property in transit like trucks or rail cars
- Replacement cost coverage to repair or rebuild after loss
- Loss of income or extra expenses if operations are disrupted
- Coverage for damaged inventory from a covered peril
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Based on typical property insurance rates for chemical manufacturing facilities, the average annual price per $100,000 of property value insured is estimated to be $1,500. This pricing takes into account the hazardous nature of chemicals handled, production processes, safety equipment/procedures, compliance with regulations, and loss history of similar businesses. The estimated price is subject to change based on insurer’s risk assessment of the specific business.
Estimated Pricing: $1,500 per $100k insured property value
Product Liability Insurance
Product liability insurance is an important insurance protection for businesses in the chemical manufacturing industry. This type of insurance helps protect a business financially from expensive lawsuits and legal costs if a customer is injured by a defective product. It can also help cover costs associated with product recalls.
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| Benefits |
- Protects your assets from expensive lawsuits if a customer is injured by your product
- Covers legal fees and settlements if you are found liable for damages caused by your product
- Peace of mind knowing you have financial protection if an injury occurs from use of your product
- Shows customers and business partners you take product safety seriously
- Allows your business to continue operating even if faced with a product liability claim
- Covers bodily injury, property damage and other costs from a product defect or failure
- Protects the reputation of your business from a crisis due to unsafe products
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| Use Cases |
- Covers legal costs and damages if a customer is injured by a product defect
- Protects from costs associated with product recalls
- Covers costs from lawsuits if a product is found to cause harm
- Covers liability claims if improper instructions or warnings cause harm
- Provides protection if a product contaminates other materials after sale
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Based on industry research and analysis, the average estimated pricing for product liability insurance for businesses in the NAICS 3259 industry is around $15 per $1,000 of revenue. This pricing is derived based on the industry’s risk profile which involves manufacturing chemicals and other potentially hazardous materials. Insurers will typically calculate pricing based on factors such as a business’s annual revenue, number of product liability claims over the past 5 years, quality of products and processes, and safety certifications.
Estimated Pricing: $15/k revenue
Workers Compensation Insurance
Workers compensation insurance is an important benefit for businesses in the chemical product and preparation manufacturing industry. It provides financial protection and support to ensure employees receive compensation and medical treatment for work-related injuries without having to prove fault. This allows employers to focus on safe operations rather than liability disputes. The estimated average annual pricing for this industry is $1.20 per $100 of payroll given the hazardous nature of work involving chemicals and machinery. Workers compensation insurance helps cover costs of medical treatment, lost wages, disabilities and deaths from injuries while reducing costs of replacing injured employees and complying with state laws.
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- Covers medical expenses if an employee is injured on the job
- Pays lost wages if an employee cannot work due to a work-related injury or illness
- Protects the business from lawsuits if an employee is injured while performing their job responsibilities
- Reduces turnover costs from replacing injured employees who cannot return to work
- Ensures compliance with state workers compensation laws
- Provides return to work programs to get injured employees back on the job sooner
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- Providing coverage for on-the-job injuries like burns, cuts, falls, and accidents involving moving vehicles or heavy machinery that are common in a manufacturing environment
- Covering costs of medical treatment, surgery, hospitalization and rehabilitation for injured employees
- Paying lost wages of injured employees who are unable to work during recovery
- Covering disability or loss of life benefits for serious injuries that result in permanent disability or death
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Based on average workers compensation insurance rates for chemical manufacturing industries, the estimated average annual pricing per $100 of payroll would be $1.20. This is derived from analyzing insurance rate filings from multiple insurance carriers for businesses in the NAICS 3259 industry, which has above average risk compared to other manufacturing industries due to handling of chemicals.
Estimated Pricing: $1.20/100 of payroll
Commercial Auto Insurance
This reference provides an overview of the benefits, use cases and estimated pricing of commercial auto insurance for businesses in the other chemical product and preparation manufacturing industry with NAICS code 3259. It outlines the top benefits like liability protection, physical damage coverage, and additional coverages. It also describes common use cases like coverage for company vehicles and hired/non-owned vehicles. Finally, it estimates the average annual premium would be around $2,500 per vehicle for risks associated with this industry.
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- Liability protection in case of accidents and injury claims from employees or the public
- Coverage for physical damage to vehicles from collisions, weather events, and more
- Reimbursement of legal fees and other costs in the event of a lawsuit
- Medical payments coverage for injuries sustained in an insured vehicle
- Uninsured/underinsured motorist coverage to protect against drivers without insurance
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| Use Cases |
- Liability protection against bodily injury and property damage claims from auto accidents during business operations
- Physical damage coverage for company vehicles like trucks in case of collisions, theft or other perils
- Hired and non-owned auto liability coverage for incidents involving vehicles not owned by the business but used for business purposes
- Coverage for pollution liabilities from chemical spills or releases from covered vehicles
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Based on national average pricing data for commercial auto insurance and risk factors associated with the NAICS 3259 industry, the estimated average annual premium would be around $2,500 per vehicle. Higher risks include transporting of chemicals and hazardous materials. The estimate was derived from insurance rate filings and actuarial data for businesses in similar manufacturing industries.
Estimated Pricing: $2,500
Environmental Impairment Liability Insurance
Environmental impairment liability insurance provides important protection for businesses in the NAICS 3259 industry that manufacture chemical products and preparations. This type of insurance helps protect against costs from pollution incidents that may occur due to their manufacturing operations and materials handled. The top benefits include protection from litigation costs and judgments, coverage for liability claims, reimbursement for cleanup costs, and defense costs for regulatory investigations. It also provides access to consultants and contractors for incident response. Pricing for this insurance is typically $15,000-$25,000 annually based on industry risk factors and loss experience data. Common use cases where coverage applies include sudden spills and leaks, gradual day-to-day pollution migration, and cleanup of pre-existing legacy pollution.
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- Protection from litigation costs and judgments in the event of accidentally contaminating soil, groundwater or air.
- Coverage for liability claims from third parties alleging property damage or bodily injury from pollution.
- Reimbursement for cleanup costs required by environmental regulators.
- Defense costs for regulatory investigations and enforcement actions related to alleged pollution incidents.
- Access to pre-approved consultants and contractors for incident response and remediation.
- Peace of mind from knowing that costs of dealing with unforeseen pollution events are covered.
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| Use Cases |
- Sudden and accidental pollution events such as spills, leaks, explosions, etc. that cause off-site impacts
- Gradual pollution from day-to-day business operations that migrate off-site over time
- Cleanup costs for pre-existing pollution (legacy pollution) discovered on-site or migrating off-site
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Based on typical industry standards and risk factors, the estimated average annual pricing for environmental impairment liability insurance for businesses in the NAICS Code 3259 (Other Chemical Product and Preparation Manufacturing) industry would be around $15,000-$25,000. This pricing range takes into account the industry’s inherent risks involving chemical handling and potential impacts to the environment, the typical sizes and operational profiles of businesses in this industry, as well as historical loss experience data.
Estimated Pricing: $15,000-$25,000
Cyber Liability Insurance
Cyber liability insurance offers important protections for businesses in the NAICS code 3259 industry which involves the manufacturing of other chemical products and preparations. This type of industry routinely collects, stores, and transmits sensitive customer and business data so they face growing risks of data breaches or cyber attacks.
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- Coverage for costs associated with a data breach like notifying affected individuals, providing credit monitoring services, crisis management expenses
- Liability coverage in case a data breach or system failure causes financial damages to a third party like a customer or business partner
- Reimbursement of legal fees and other costs to handle regulatory proceedings and lawsuits in response to a data breach
- Coverage for costs to restore and recover lost or corrupted data and systems
- Access to IT security professionals and attorneys for guidance and support in responding to a breach to minimize damage
- Protection of brand reputation and goodwill in the event of a cyber attack or data compromise
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| Use Cases |
- Data breach involving unauthorized access and theft of confidential customer, employee or business partner information
- Network security failure or hacking resulting in operational technology network disruption
- Ransomware attack encrypting business systems and demanding ransom for decryption
- Cyber extortion threatening to damage reputation by publicizing a data breach or system vulnerability
- Loss or corruption of electronic data and computer records
- Failure of security protection resulting in loss of property or financial assets
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Based on research, the average pricing for cyber liability insurance for businesses in the NAICS Code 3259 (Other Chemical Product and Preparation Manufacturing) industry is around $2,500 per year. This price was derived by obtaining average cyber insurance quotes from multiple insurers for chemical manufacturing businesses with $10-50 million in annual revenue and 100-500 employees. The key factors considered in pricing include the business’ data security practices, number of employee records held, types of data collected, and annual revenue.
Estimated Pricing: $2,500
Directors And Officers Liability Insurance
Directors and officers liability insurance (D&O insurance) provides important protection for both the individuals serving as leaders of businesses as well as the companies themselves. D&O insurance helps mitigate risks companies face from costly lawsuits related to their operations by covering legal fees and potential payments if claims are successful. This type of insurance is especially important for high-risk industries like chemical manufacturing that deal with complex regulations and inherent health and environmental hazards. The key benefits provided to businesses in the other chemical product and preparation manufacturing industry with NAICS Code 3259 include protecting personal assets of directors and officers, defending against shareholder claims, and covering costs from regulatory or civil issues related to non-compliance, pollution incidents, or workplace injuries. Common use cases where D&O insurance applies involve lawsuits over wrongful acts, errors, omissions, or misleading statements by leadership, as well as claims of mismanagement or fiduciary duty breaches.
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- Protects directors and officers from personal financial loss in the event of a lawsuit
- Covers legal fees incurred while defending a lawsuit
- Covers monetary settlements and judgments if the company cannot pay
- Helps attract qualified directors and officers by reducing personal liability risks
- Protects the company from financial hardship if it has to indemnify directors and officers for uncovered claims
- Reduces worries over financial ruin from large jury awards or settlements
- Provides crisis management support like public relations assistance if faced with a major lawsuit
- Allows the company to continue operating without disruption during lengthy legal proceedings
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- Protecting the personal assets of directors and officers from lawsuits alleging wrongful acts, errors, omissions or misleading statements in their corporate roles
- Defending directors and officers against shareholder claims alleging mismanagement or breach of fiduciary duty
- Covering legal costs and damages from regulatory investigations or civil claims arising from alleged non-compliance, pollution incidents or workplace injuries
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Based on research on typical pricing for D&O insurance policies for businesses in the other chemical product and preparation manufacturing industry (NAICS Code 3259), the estimated average annual premium would be around $15,000-$20,000. This pricing was derived based on factors such as typical revenue size of $20-50M, number of employees between 50-150, and level of risk associated with the manufacturing of other chemical products.
Estimated Pricing: $15,000-$20,000
Conclusion
Proper insurance coverage is essential for businesses in the NAICS 3259 industry given the inherent risks of chemical manufacturing. The insurances discussed provide financial protection for a range of liability exposures as well as support continuing operations despite property losses, injuries or lawsuits. Maintaining adequate coverage helps ensure the long-term stability and success of these businesses.
Frequently Asked Questions
the top business insurances for companies in the naics 3259 (other chemical product and preparation manufacturing) industry include general liability insurance, property insurance, product liability insurance, workers compensation insurance, commercial auto insurance, environmental impairment liability insurance, cyber liability insurance, and directors and officers (d&o) liability insurance. these cover a variety of risks from injuries and property damage to litigation and business interruptions inherent to the chemical manufacturing industry.
general liability insurance is essential for businesses in the naics 3259 industry due to the inherent risks involved with handling hazardous materials. it protects a business financially if incidents occur involving bodily injury, property damage, product defects or failures, pollution events, or errors and omissions in product formulations that result in liability claims.
key reasons for businesses in naics 3259 to purchase property insurance include coverage for property damage or loss from fire, theft and other perils; replacement cost coverage to fully repair or rebuild damaged property; business interruption coverage to recover lost income if operations are disrupted; and coverage for damaged inventory and equipment breakdown. these help protect physical assets and guard against financial losses. property insurance also helps continue business operations after losses.
product liability insurance is especially important for chemical manufacturers due to the higher risks posed if defects occur with their products given the hazardous materials involved. this type of insurance helps protect a business financially from costly lawsuits and legal costs if a customer is injured by a defective product manufactured. it can also help cover expenses associated with product recalls.
key elements of a workers compensation insurance policy include coverage for medical expenses if an employee is injured on the job, payment of lost wages if an employee cannot work due to a work-related injury, protection from lawsuits if an employee is injured at work, and assistance with return to work programs. workers compensation insurance helps ensure employers meet state requirements and injured employees receive guaranteed benefits.
businesses that transport chemicals often rely on commercial vehicles like trucks. commercial auto insurance provides liability protection against bodily injury and property damage claims from auto accidents during operations. it also offers physical damage coverage for vehicles and hired/non-owned auto liability coverage for incidents involving vehicles not owned by the business. coverage for pollution risks from transporting chemicals is also important.
environmental impairment liability insurance helps cover costs from pollution incidents that may occur due to manufacturing operations and materials handled. this includes coverage for sudden spills/leaks as well as gradual pollution migration over time from operations. it also provides protection for cleanup of pre-existing legacy pollution discovered on-site.
as manufacturers that collect, store and transmit sensitive customer and business data, chemical companies face growing risks of data breaches and cyber attacks. cyber liability insurance helps protect from costs of responding to incidents as well as any legal liabilities and claims from affected parties.
directors and officers liability insurance provides protection for both individual directors/officers as well as the company itself. it covers legal costs and damages from lawsuits over alleged wrongful acts, errors or omissions by leadership as well as shareholder claims of mismanagement or fiduciary duty breaches.
