Key Takeaways
- Property insurance protects buildings, equipment, feed and livestock from losses.
- General liability insurance protects against third-party lawsuits from injuries on premises or foodborne illnesses.
- Workers compensation covers medical costs and lost wages for injured employees.
- Auto insurance protects vehicles used for transporting livestock and making deliveries.
- Crop insurance provides stability against losses from natural disasters or market fluctuations affecting feed crops.
- Business interruption insurance maintains cash flow if operations are disrupted.
Introduction
As a poultry or egg producer, it is crucial to protect your business and financial assets from unexpected risks and interruptions outside of your control. The top insurances to consider include property, general liability, workers compensation, auto, crop and business interruption policies.
Property Insurance
Property insurance is a crucial risk management tool for any business involved in poultry and egg production. It provides financial protection against unexpected losses from a wide range of perils that could damage property and disrupt operations.
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After reviewing average property values and losses for businesses in the poultry and egg production industry (NAICS Code 1123), the estimated average annual pricing for property insurance would be around $7,500. This was calculated based on data showing the industry typically has buildings and equipment valued around $5-10 million on average and experiences losses of around 0.15-0.3% of property values annually from events like fire or storm damage.
Estimated Pricing: $7,500
General Liability Insurance
General liability insurance provides essential coverage for businesses in the poultry and egg production industry. As producers face risks from injuries, foodborne illness claims, pollution accidents and more, liability insurance offers financial protection and peace of mind. This insurance covers lawsuits from customers or visitors injured on the property, as well as claims if customers get sick from food. It also protects against pollution risks and equipment accident liability. Pricing is typically estimated between $3,500-$5,000 annually based on business size and safety practices.
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For businesses in the poultry and egg production industry with NAICS code 1123, general liability insurance pricing is typically estimated around $3,000 – $5,000 annually. The pricing is largely dependent on factors like number of employees, annual revenue, ownership structure, loss history, and safety measures/preventions in place. On average, the pricing is derived based on $1 of insurance coverage per $1,000 of annual revenue.
Estimated Pricing: $3,500 – $5,000 annually
Workers Compensation Insurance
Workers compensation insurance provides critical benefits and protection for businesses in high-risk industries like poultry and egg production. It covers medical expenses and lost wages for injured employees, protects businesses from liability costs if sued over injuries, and helps minimize disruption and costs from replacing injured workers. The references provide detailed explanations of the top benefits, use cases and estimated pricing of workers comp insurance for this NAICS 1123 industry.
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Based on industry data and statistics, the average workers compensation insurance pricing for businesses in the poultry and egg production industry with NAICS Code 1123 tends to be on the higher side due to the risks involved in this type of work. The pricing is usually calculated based on payroll and loss records. For a business with annual payroll of $5 million and average losses of $150,000 per year, the estimated annual premium would be around $250,000.
Estimated Pricing: $250,000
Auto Insurance
Auto insurance plays a critical role for businesses in the poultry and egg production industry. It provides important liability and property protection for their fleet vehicles used to transport livestock, make deliveries, and allow employees to complete daily tasks. In addition, auto insurance helps shield these businesses from costly lawsuits and ensures operations can continue even if a vehicle is damaged by offering coverage like rental reimbursement. Insurance providers also work with these companies to design customized insurance plans that specifically fit the needs of their commercial vehicle fleet.
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Based on industry data, the average auto insurance pricing for businesses in the poultry and egg production industry (NAICS code 1123) is estimated to be around $1,500/year per vehicle. This pricing takes into account factors like the type of vehicles used, mileage, safety records, and the risk profile of the industry which involves transportation of livestock.
Estimated Pricing: $1,500/year
Crop Insurance
Crop insurance provides financial protection for poultry and egg producers against losses from natural disasters or market fluctuations that are outside of their control. It helps stabilize revenues and protects long-term business continuity. Some key benefits include protecting profitability through compensation for yield or revenue losses, allowing recovery of input costs if crops are destroyed, and enabling access to needed credit. Pricing is estimated around $0.75-$1 per bird on average.
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Based on typical premium rates for crop insurance and average losses in the poultry and egg production industry, the estimated average annual price for crop insurance would be around $0.75 – $1.00 per bird. This price range was calculated using an average flock size of 100,000 birds, average mortality rates of 3-5%, and typical premium rates of 1% of the value of the insured birds.
Estimated Pricing: $0.75 – $1.00 per bird
Business Interruption Insurance
Business interruption insurance provides coverage for revenue losses and extra expenses incurred if a poultry or egg farm’s operations are suspended due to an insured cause of loss, such as property damage, equipment breakdown, utility outages, disease outbreaks, natural disasters or other events outside of the business’s control. It helps maintain cash flow and payroll costs during downtime, protects against losses from contaminated inventory, and reimburses for additional operating expenses until operations can resume. Business interruption insurance is especially important for poultry and egg producers due to their reliance on time-sensitive production cycles, and can help these agricultural businesses mitigate financial risks from events outside of their control.
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Based on typical pricing factors for this industry such as revenue, property value, and location, the estimated average annual pricing for business interruption insurance would be around $5,000. This pricing assumes an average annual revenue of $5 million, property value of $2 million, and includes compensation for lost profits and additional operating expenses if operations are disrupted.
Estimated Pricing: $5,000
Conclusion
Implementing a comprehensive insurance plan tailored to your operation helps provide stability and peace of mind. Discuss your unique risks and needs with an agricultural insurance specialist to create the optimal coverage for your poultry or egg production business.