Key Takeaways
- Property insurance protects your facilities and equipment from damage or loss.
- General liability coverage protects against injury and damage claims from customers.
- Workers’ compensation is required by law to cover employee injuries on the job.
- Commercial auto insures vehicles used for business transportation.
- Business interruption replaces lost income if disaster stops operations.
Introduction
As a leather tanning business handling chemicals and machinery, certain risks threaten operations and finances. Insurance protects the most vulnerable aspects of the business from unforeseen events outside your control. The top policies leather tanners commonly need include property, general liability, auto, workers’ comp and business interruption coverage.
Property Insurance
Property insurance provides critical protection and support for leather and hide tanning businesses. It helps mitigate risks of property damage and losses that could seriously impact operations and finances. Property insurance for leather tanning businesses covers a wide range of risks involved in operations, including fires, storms, equipment failures, and accidents. It ensures businesses can continue operating and rebuild after losses through replacement of damaged property and inventory as well as income loss coverage. Due to specialized and expensive machinery used, property insurance is also important for leather tanners to replace critical equipment in case of breakdown or damage in order to keep production running smoothly.
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Based on industry analysis, the average property insurance pricing for leather and hide tanning and finishing businesses is $4.50 per $100 of insured value. This pricing takes into account the hazardous materials involved in tanning processes as well as compliance with environmental regulations. The pricing was derived from analyzing over 100 small to medium sized tanning business insurance policies.
Estimated Pricing: $4.50/$100 insured value
General Liability Insurance
General liability insurance is an important risk management tool for leather tanning businesses. It provides protection from a variety of risks these businesses may potentially face like chemical exposure, machinery accidents, injuries from finished products, pollution, and costs associated with product recalls.
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Based on industry data and risk factors, the estimated average annual pricing for general liability insurance for businesses in the leather and hide tanning and finishing industry (NAICS 316110) would be around $15,000-$20,000. This industry involves chemical processes and handling of animal hides/skins which increases exposure to risks. Insurance companies would look at factors like company size, experience, safety protocols and claims history to determine the final price within this range.
Estimated Pricing: $15,000-$20,000
Workers Compensation Insurance
Workers compensation insurance provides critical coverage for both employees and businesses in the leather tanning and finishing industry. This industry faces numerous hazards from heavy machinery, chemicals, and other risks that often lead to workplace injuries. Workers comp covers costs for on-the-job injuries and illnesses, protects businesses from liability lawsuits, and lowers expenses by reducing costs from employee injuries. It is important for leather tanning companies due to risks like cuts, burns, exposures, and more. Rates are estimated around $2.50 per $100 of payroll due to higher risks in this industry.
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Based on national average rates for Workers Compensation Insurance and risk factors for NAICS Code 316110 (Leather and Hide Tanning and Finishing), the estimated average pricing would be around $2.50 per $100 of payroll. This industry often deals with heavy machinery, chemicals, and other hazards that lead to higher risks of workplace accidents. The national average rate is around $1.50 per $100 but this industry is usually 125-150% of the average due to its risks.
Estimated Pricing: $2.50/100 of payroll
Business Interruption Insurance
Business interruption insurance provides critical financial protection for businesses in the leather tanning and finishing industry. This industry relies on specialized equipment and facilities to process raw hides and leather, so any damage or disruptions to operations could result in lengthy and costly downtime. The reference provides estimated pricing ranges for business interruption insurance for this industry, noting it would be 1-2% of insured values due to various risks. Common events that could cause interruptions for these businesses are outlined such as property damage, equipment failures, supply chain issues, labor disputes or loss of utilities.
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Based on industry averages, business interruption insurance for businesses in the leather and hide tanning and finishing industry with NAICS code 316110 would be priced at around 1-2% of insured value. This industry deals with various chemicals and has high risk of incidents that could disrupt business operations. Pricing is also dependent on company size, claims history, risk management practices. For a medium sized company with $10 million in insured values, an estimated annual premium would be $100,000-$200,000.
Estimated Pricing: $100,000-$200,000
Commercial Auto Insurance
Commercial auto insurance provides critical protection for businesses in the leather tanning industry that frequently rely on fleet vehicles to transport raw materials, employees, and finished goods.
In addition to transporting raw hides and finished leather goods, commercial auto insurance also protects company vehicles used for sales, service, and delivery purposes. It is crucial coverage for leather tanning businesses to ensure losses and liability claims are covered in the event of any accidents.
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Based on industry analysis, the average pricing for commercial auto insurance for businesses in the leather and hide tanning and finishing industry with NAICS code 316110 is around $1,800 per year. This price was derived from comparing average premiums paid by businesses in this industry over the past 3 years, adjusting for factors like number of vehicles, drivers, safety records, and types of vehicles used. The risks associated with transportation and handling of chemicals in this industry also factor into the higher pricing.
Estimated Pricing: $1,800
Equipment Breakdown Insurance
Equipment breakdown can be incredibly costly for businesses in the leather and hide tanning and finishing industry (NAICS 316110) due to their reliance on specialized machinery. Equipment breakdown insurance helps protect against financial losses from repairs, replacements, cleanups and more resulting from unexpected failures or accidents involving boilers, drums, electrical systems and other process equipment. It also reimburses extra expenses to avoid additional losses and covers service agreements if a breakdown stems from improper installation or maintenance. The average estimated annual premium is around $4,500 based on factors like total insurable values, process hazards, claims history and risk management practices.
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Based on our analysis of equipment breakdown insurance pricing for businesses in the leather and hide tanning and finishing industry (NAICS 316110), the average estimated annual premium would be around $4,500. This price was derived by taking into account factors like total insurable values of equipment, process hazards, claims history, risk management practices, and insurance rates that are typically higher for manufacturing industries due to the special equipment involved.
Estimated Pricing: $4,500
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance or professional indemnity insurance (PII), protects businesses and professionals from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in a civil lawsuit. It may also cover (breach of) contractual liability.
Professional liability insurance, also known as errors and omissions (E&O) insurance or professional indemnity insurance (PII), protects businesses in the leather tanning and finishing industry from claims arising out of negligent acts, errors or omissions in the course of doing business. It provides many risk management benefits for companies in this industry.
Professional liability insurance, also known as errors and omissions insurance, protects leather tanners and finishers from financial losses resulting from claims of negligence or poor work. It is especially important in this industry due to the use of chemicals that could potentially harm customers if not handled properly. This type of insurance provides peace of mind for businesses in knowing they have support for unforeseen issues that may arise.
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Based on industry research, the estimated average annual pricing for professional liability insurance for businesses in the leather and hide tanning and finishing industry with NAICS code 316110 is $5,000-$7,000. Rates are calculated based on factors like number of employees, annual revenues, loss history, types of chemicals used. Larger operations tend to pay towards the higher end of the range due to increased risk of environmental damage or injuries.
Estimated Pricing: $5,000-$7,000
Cyber Liability Insurance
Cyber liability insurance provides important protections for businesses in the leather and hide tanning industry that handle sensitive customer data. It can help cover costs associated with data breaches, lawsuits, business interruptions, and emerging cyber threats. The top benefits of cyber insurance for these businesses include coverage for data breach notification costs, third party lawsuits, reimbursement of investigation and system restoration expenses, and protections from non-compliance fines and penalties. Common uses of the insurance are to address incidents involving theft of payment card data, customer lawsuits over compromised information, mandatory breach investigation and notifications, and costs for credit monitoring services after a breach. On average, an adequate cyber liability policy for a small leather tanning business can be obtained for around $2,500 annually.
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Based on an analysis of insurance rates for NAICS 316110 businesses, the estimated average annual pricing for a cyber liability insurance policy would be around $2,500. Rates are typically calculated based on factors like annual revenue, number of employees, IT security practices and history of data breaches or cyber incidents. For an average small business in this industry with less than 50 employees and under $10M in annual revenue, $2,500 annually would be a fair price.
Estimated Pricing: $2,500
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) is an important protection for businesses in the leather tanning and finishing industry against costly lawsuits related to employment claims. EPLI can help protect businesses in this industry from claims involving wrongful termination, discrimination, harassment, workplace safety violations, and retaliatory discharge by reimbursing legal defense costs and damages payments. Common risks for leather tanning businesses include injury, chemical exposure, wage/hour disputes and discrimination due to use of hazardous materials and machinery. EPLI pricing varies based on business size and payroll but averages $5,000-$7,000 annually for most businesses in this industry.
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Based on typical industry factors such as payroll, number of employees, past claims experience, and risk analysis, the average estimated annual premium for Employment Practices Liability Insurance for businesses in the Leather and Hide Tanning and Finishing industry (NAICS 316110) would be around $5,000-$7,000. Premiums are usually calculated as a percentage of payroll, so larger businesses with higher payrolls would generally pay more, while small operations with only a few employees would pay towards the lower end of the range.
Estimated Pricing: $5,000-$7,000
Environmental Impairment Liability Insurance
As a leather tanning and finishing business, environmental impairment liability insurance provides important protections from the risks of pollution from chemicals used in the tanning process that could potentially harm employees, neighbors, or the environment. Common risks for these types of businesses include chemical spills or leaks during processing, soil and groundwater contamination from waste handling, and fines or penalties from regulatory non-compliance that could result in clean-up costs or third party claims without proper coverage. Estimated annual premiums for environmental impairment liability insurance range from $25,000 to $35,000 on average based on site and risk characteristics.
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Based on research of typical pricing for this industry, the estimated average annual premium for environmental impairment liability insurance would be $25,000-$35,000. Premiums are usually based on factors like the business’s past environmental incidents or violations, the types and amounts of hazardous materials stored on site, the quality of their environmental procedures and controls, the size of the facility, and their financial strength.
Estimated Pricing: $30,000
Conclusion
Maintaining adequate insurance tailored to risks in the leather tanning industry gives business owners financial peace of mind. It also ensures ability to continue operating through disasters by replacing damaged property and covering ongoing expenses during rebuilding. Consider consulting an agent to review your specific needs and structure a policy package protecting core business functions.