Key Takeaways
- General liability insurance protects against injuries and property damage claims
- Property insurance covers buildings, equipment and inventory from losses
- Workers’ compensation covers medical costs and lost wages for on-the-job injuries
- Commercial auto insures vehicles used for business purposes
- Equipment breakdown insurance covers repairs from machinery failures
- Product liability protects against injuries from defective products
- Umbrella insurance increases primary policy liability limits
- Cyber insurance covers data breaches and system disruptions
Introduction
As an industrial machinery manufacturer, protecting your business from unexpected financial losses is crucial. This industry faces inherent risks from manufacturing processes, transporting heavy equipment, potential product defects, and more. Having the right business insurance coverage in place helps ensure financial stability even if accidents or issues occur beyond your control.
General Liability Insurance
General liability insurance provides essential protection to businesses in the industrial machinery manufacturing industry against costly third-party lawsuits. It covers incidents that may result in bodily injury, property damage, product defects or other claims that can seriously impact operations and finances. Additionally, it offers financial coverage for legal defence costs if sued and loss of income if operations are shut down due to lawsuits. Businesses in this industry face risks from issues like pollution, intellectual property disputes, injuries occurring both on and off premises during activities like assembly, installation and product servicing. General liability insurance is especially important for manufacturers to safeguard against liability exposures inherent to their manufacturing processes and machinery products.
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| Benefits |
- Protects your business from third-party claims of bodily injury or property damage
- Covers legal costs if you’re sued by a customer or third party
- Provides coverage for incidents that occur on or off your business premises
- Covers claims related to your products or completed work
- Protects against loss of income if your operations are shut down due to a lawsuit
- Covers claims that may arise several years after an incident when injuries surface
- Shows customers and clients you take risk management seriously
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| Use Cases |
- Protection against lawsuits due to injuries at the work site
- Protection against lawsuits related to product defects and recalls
- Protection against lawsuits from clients and customers if machinery malfunctions causes injury or damage
- Protection for on-site assembly, installation, demonstration, and product servicing work
- Protection against pollution and environmental damage claims
- Protection against lawsuits regarding intellectual property infringements like patent, trademark or copyright violations
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Based on research on average general liability insurance pricing for businesses in the industrial machinery manufacturing industry (NAICS Code 3332), the estimated average annual premium is around $3,500. This pricing is derived from consideration of factors like the type of machinery being manufactured, number of employees, annual revenue, and past claims/loss experience. Hazards associated with machinery manufacturing tend to increase risks and insurance costs.
Estimated Pricing: $3,500
Property Insurance
Property insurance provides essential protection for businesses in the industrial machinery manufacturing industry. It protects expensive physical assets like buildings, production machinery, tools and other equipment that are critical to operations. Additionally, property insurance helps manufacturers recover from financial losses due to covered property damage and provides funds for repair or replacement of assets. It also offers business interruption coverage to support operations and income if a loss prevents normal business functionality.
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| Benefits |
- Protection against financial loss from property damage
- Coverage for equipment, machinery, buildings and other physical assets
- Replacement cost coverage to rebuild or repair assets after a covered loss
- Business interruption insurance to cover lost income if operations are disrupted
- Coverage for equipment in transit in case of accidents or incidents while shipping
- Protection for specialized tools and dies used in manufacturing
- Coverage for flood, earthquake and other natural disasters
- Coverage for equipment in transit in case of accidents or incidents while shipping
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- Protection against property damage or loss due to fire, lightning, explosions, windstorms/hurricanes
- Replacement or repair costs for buildings, machinery and equipment if damaged
- Coverage for valuable business personal property like inventory, furniture, computers and office equipment
- Reimbursement for costs to clean up debris or hazardous materials in the event of a covered loss
- Protection for off-premises property that is temporarily away from the location, like equipment being repaired off-site
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Based on average property values and insurance rates for businesses in the industrial machinery manufacturing industry, the estimated annual property insurance pricing is around $3,500. Property values for manufacturing facilities and machinery equipment can be high. Additionally, machinery manufacturing involves machines operating which carries more risk than office-only properties. An average calculation was done based on facility size, property values, and industry risk factors.
Estimated Pricing: $3,500
Commercial Umbrella Insurance
Commercial umbrella insurance provides additional liability protection for industrial machinery manufacturers. It covers costs above the primary commercial policies like general liability and helps protect against expensive lawsuits. Some key benefits of commercial umbrella insurance for industrial machinery manufacturers include providing higher liability limits than individual primary policies to better protect against costly legal claims and settlements, extending coverage for additional risks such as pollution liability critical for businesses handling hazardous chemicals or waste, and offering consistency in coverage worldwide which is important for operations with international sales and service networks.
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- Provides additional liability protection above primary commercial policies like general liability, auto, or workers comp
- Protects assets from large lawsuits awards/settlements that exceed primary policy limits
- Covers legal defense costs which can help reduce overall risk
- Extends coverage for additional risks not included in primary policies like pollution liability
- Potentially offers higher liability limits than individual primary policies alone
- Provides consistency in coverage worldwide which is important for international operations
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| Use Cases |
- Protection from lawsuits with damages exceeding general liability policy limits
- Protection from expensive lawsuits related to injuries on worksite
- Protection from lawsuits related to defects in manufactured products
- Protection from lawsuits related to transportation of hazardous materials
- Protection from pollution related lawsuits for businesses handling hazardous chemicals or waste during manufacturing
- Protection from intellectual property related lawsuits such as patent infringement claims against manufactured products
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Based on typical pricing formulas, factors considered include the insured’s underlying commercial general liability limit of $1,000,000 and property damage limit of $500,000. Given the NAICS code of 3332 for industrial machinery manufacturing, which is considered a moderate risk industry, the estimated annual premium would be $5,000-$7,000. This pricing was derived by taking 5-7% of the underlying limits.
Estimated Pricing: $5,000-$7,000
Workers’ Compensation Insurance
Workers’ compensation insurance provides essential coverage for businesses operating in industries involving heavy equipment and risks of on-the-job injuries. It helps ensure employees receive medical care and financial support if an accident occurs. Additionally, the coverage demonstrates care for employee well-being, protects companies from lawsuits, helps attract quality job applicants, and supports returning injured employees to work sooner. Pricing is estimated on average to be $2.30 per $100 of a company’s payroll for businesses in the industrial machinery manufacturing industry.
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- Covers medical expenses and lost wages for employees injured on the job
- Protects the company from lawsuits if an employee is injured while working
- Required by law in all states except Texas
- Reduces costs of employee turnover from workplace injuries
- Attracts quality job applicants by offering standard benefits
- Prevents high medical costs from impacting business profits
- Provides return-to-work programs to get injured employees back on the job faster
- Demonstrates care and commitment to employee well-being
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| Use Cases |
- Protect employees from on-the-job injuries like cuts, bruises and fractures that may occur when operating heavy machinery or tools
- Cover costs of medical treatment, surgery, physical therapy or other care needed to treat employees’ work-related injuries or illnesses
- Replace portion of lost wages for employees who miss work due to a work-related injury or illness
- Cover liability costs if an employee is injured or becomes ill due to workplace hazards and sues their employer
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Based on industry risk factors and average claim costs, the estimated average price for workers’ compensation insurance for businesses in the industrial machinery manufacturing NAICS 3332 industry is around $2.30 per $100 of payroll. This price was derived from workers’ compensation insurance rate filings and loss data for businesses in this industry over the past 5 years. The machinery manufacturing industry carries more risk than some other industries due to factors like heavy lifting, use of hazardous machinery/tools, and risk of injuries from moving machinery parts.
Estimated Pricing: $2.30 per $100 of payroll
Business Auto Insurance
Business auto insurance is an important coverage for industrial machinery manufacturing businesses. It protects companies from losses involving company vehicles used to transport equipment, materials and tools. Additional coverages business auto insurance provides for machinery manufacturing businesses includes liability protection, medical payments for injuries to others, replacement costs for damaged or stolen vehicles, and coverage for hired and non-owned vehicles.
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| Benefits |
- Liability protection in case of accidents
- Coverage for vehicles used in delivery and transportation
- Replacement costs if vehicles are damaged or stolen
- Medical payments coverage for injuries to others from accidents
- Coverage for hired and non-owned vehicles
- Customized coverage options like cargo or tools coverage
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| Use Cases |
- Covering owned fleet vehicles like cargo vans and pickup trucks used to transport parts and machinery
- Covering non-owned vehicles like employee vehicles used for company business
- Covering liability insurance for incidents involving company vehicles
- Covering collision coverage for damage to company vehicles
- Covering comprehensive coverage for damage not caused by collision like fire, theft or natural disasters
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Based on industry data and average factors such as number of vehicles, miles driven,claims history etc., the estimated average annual premium for business auto insurance for businesses in this industry is around $2,500 per vehicle. The premium is calculated based on industrial machinery manufacturing businesses typically having fleets of smaller work trucks and vans that are used within a limited service area for functions like deliveries,site work and transportation of machinery parts and tools.
Estimated Pricing: $2,500
Commercial Equipment Breakdown Insurance
Commercial equipment breakdown insurance provides critical protection for industrial machinery manufacturers from the financial risks of unexpected equipment failures or breakdowns. It covers repair and replacement costs, business interruption expenses, and other costs associated with equipment issues. Additional benefits include liability protection if a breakdown causes property damage or injuries, costs to temporarily continue operations elsewhere during repairs, and protection for specialized equipment integral to manufacturing processes.
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- Covers repair or replacement costs for equipment damaged by mechanical or electrical breakdown
- Covers expenses for temporary repairs, renting replacement equipment, or extra expenses incurred during the repair process
- Provides funds to avoid financial difficulties related to interruption of operations due to equipment failures
- Pays for the costs to remove and dispose of damaged equipment
- Covers additional living expenses if a home based business is affected by equipment breakdown
- Covers spoilage of raw materials or products if damage is due to equipment breakdown
- Covers damage to other property that occurs as a direct result of equipment breakdown
- Covers the additional operating expenses needed to temporarily continue business operations elsewhere during repairs
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| Use Cases |
- Protecting large industrial machinery from unplanned breakdowns
- Covering the costs of repairs or replacement of key manufacturing equipment like CNC machines, robots, and automation equipment
- Providing business income protection if a breakdown causes a disruption in production
- Covering any increased costs of operation resulting from an equipment breakdown like hiring temporary equipment or renting a temporary location
- Protecting specialized, hard to replace equipment integral to manufacturing processes
- Indemnifying legal costs and liability claims in case a breakdown causes property damage or bodily injury
- Covering professional fees for engineers or technicians required for repairs
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Based on typical pricing factors such as equipment values, number of locations, past losses and other risk characteristics, the estimated average annual premium for commercial equipment breakdown insurance for businesses in the industrial machinery manufacturing NAICS code 3332 industry would be $15,000. This price was derived from industry data and averages, adjusting for higher equipment values and concentration of risks compared to other manufacturing industries.
Estimated Pricing: $15,000
Product Liability Insurance
Product liability insurance provides essential protection for industrial machinery manufacturers against costly lawsuits and claims. It ensures businesses in this hazardous industry are protected from financial and legal risks beyond their control. Additionally, product liability insurance demonstrates a commitment to customer safety, covers product recalls if issues are found, and allows businesses to focus on operations rather than legal worries. The estimated pricing also provides an important context for businesses to consider in this industry.
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| Benefits |
- Protects your business from financial ruin in case of product liability lawsuits
- Covers legal fees and damages if a customer is injured by one of your products
- Protects your assets like equipment, inventory, and facilities from being seized to pay damages in a product liability lawsuit
- Demonstrates to customers you stand behind the safety and quality of your products
- Allows you to focus on running your business instead of worrying about legal costs
- Ensures continuity of your business operations in the event of a successful product liability claim
- Provides access to experienced product liability defense attorneys and experts to defend legitimate claims
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| Use Cases |
- Protect against liability claims if a product malfunctions or causes injury
- Cover legal fees and settlements if sued for a defective product
- Reimburse for product recalls if a safety issue is discovered
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Based on industry research, the average pricing for product liability insurance for businesses in the industrial machinery manufacturing NAICS code 3332 industry is usually between $2 to $5 per $1000 of gross receipts, with a minimum premium of around $5,000. The pricing is derived based on risk evaluations of the types of machinery being manufactured and their hazardous levels as well as safety records and protocols of the businesses.
Estimated Pricing: $2-5 per $1000 of gross receipts, minimum of $5,000
Cyber Liability Insurance
As an industrial machinery manufacturer, your business faces risks of cyber attacks and data breaches that could result in costly damages and liability claims. Cyber liability insurance provides essential protection against these evolving cyber risks and helps cover various expenses should an incident occur.
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- Covers costs of a data breach including legal costs, forensic investigations, credit monitoring and public relations
- Covers theft of intellectual property like designs and production processes
- Covers liability if a product failure or defect leads to a cyber incident
- Covers loss of income if systems are down due to a cyber attack
- Covers liability claims if a cyber incident involving a product or system leads to property damage or bodily injury
- Provides risk management and loss prevention services to help reduce the likelihood of a cyber attack
- Covers expenses related to restoring systems and data after an attack
- Protects the company’s reputation in the event of a public data breach
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| Use Cases |
- Data breach or cyber attack resulting in third party losses
- Ransomware attack resulting in business interruption
- Costs to mitigate identity theft or notify affected individuals of data breach
- Regulatory fines and penalties for failure to protect sensitive data
- Loss of intellectual property or trade secrets from a cyber attack
- Network security failures or errors exposing customer information
- Failure of physical or technical security controls resulting in a breach
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Based on typical Cyber Insurance pricing for manufacturing businesses, the average price for industrial machinery manufacturing companies with annual revenues between $10-50 million would be around $5,000. This pricing takes into account factors like company size, industry, IT security practices, and history of data breaches or cyber attacks. The price is an annual premium paid to the insurer.
Estimated Pricing: $5,000
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, is a key coverage for industrial machinery manufacturers to protect their business from costly lawsuits and financial losses that may arise from issues with the products they design, manufacture or sell.
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| Benefits |
- Protects against lawsuits from defective or dangerous products
- Covers legal costs if sued for bodily injury or property damage caused by your products
- Reimburses you for costs associated with product recalls
- Protects company reputation by providing funds to resolve issues from faulty products
- Covers costs associated with repairing or replacing defective products
- Provides liability protection for intellectual property risks like patent infringement claims
- Covers liability claims even if filed years after an incident due to the long tail of liability for industrial machinery
- Gives peace of mind in knowing your business is protected from potentially catastrophic losses
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| Use Cases |
- Cover any legal claims arising from faulty products, manufacturing defects, or product failures
- Cover any legal claims arising from injuries or accidents caused by product malfunctions
- Cover costs of product recalls or replacements due to safety issues
- Cover legal costs if sued for intellectual property issues like patent or trademark infringement
- Cover legal costs and damages from any negligence claims from improper design or instructions for products
- Cover legal costs from claims of breach of warranty or contract if products don’t perform as specified
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Based on research of average pricing for professional liability insurance for industrial machinery manufacturing businesses, the estimated average annual premium is around $2,000-$5,000 depending on factors like annual revenue, number of employees, claims history, and types of machinery manufactured. Businesses manufacturing heavy machinery which may pose higher risks tend toward the higher end of this range.
Estimated Pricing: $2,000-$5,000
Conclusion
Choosing insurance policies tailored to your needs as an industrial machinery manufacturer helps safeguard your assets, reputation, and continuity of operations. Working with an experienced agent to evaluate risks and recommend suitable coverage limits and options provides long-term peace of mind so you can focus fully on running your business successfully.
Frequently Asked Questions
the most important types of insurance for industrial machinery manufacturing businesses include general liability insurance, property insurance, workers’ compensation insurance, commercial auto insurance, commercial equipment breakdown insurance, product liability insurance, commercial umbrella insurance, and cyber liability insurance.
based on research, the estimated average annual premium for general liability insurance for industrial machinery manufacturing businesses is around $3,500.
based on averages, the estimated annual property insurance pricing is around $3,500 for industrial machinery manufacturing businesses.
the estimated average price for workers’ compensation insurance for industrial machinery manufacturing businesses is around $2.30 per $100 of payroll.
based on industry data, the estimated average annual premium for commercial auto insurance is around $2,500 per vehicle for industrial machinery manufacturing businesses.
based on industry averages, the estimated average annual premium for commercial equipment breakdown insurance is around $15,000 for industrial machinery manufacturing businesses.
product liability insurance for industrial machinery manufacturers is usually priced between $2 to $5 per $1,000 of gross receipts, with a minimum premium of around $5,000.
based on typical pricing for manufacturing businesses, cyber liability insurance costs an average of around $5,000 annually for industrial machinery manufacturers with $10-50 million in annual revenues.
yes, professional liability insurance, also known as errors and omissions insurance, protects industrial machinery manufacturers from financial losses due to negligent acts, errors or omissions related to their products. it covers liability risks associated with manufacturing complex equipment and machinery.
commercial umbrella insurance commonly provides protection from lawsuits with damages exceeding general liability limits, expensive lawsuits related to injuries on worksite, and lawsuits related to defects in manufactured products.
