Key Takeaways
- General liability insurance protects against third-party claims like injuries on the property.
- Property insurance covers costs to repair or replace buildings and equipment after damage or loss.
- Crop insurance protects livestock inventory and revenue from weather events and disease outbreaks.
- Workers’ compensation covers medical costs and lost wages for employee injuries on the job.
- Product liability insures costs of recalls and lawsuits if chicken meat causes harm.
- Business vehicle policies cover delivery fleet losses and liability from accidents.
- Farm equipment insurance safeguards investments in machinery from damage and liabilities.
- Business interruption pays ongoing expenses if disaster temporarily halts operations.
- Consulting insurance agents ensures a customized plan for individual operations.
Introduction
As an important agriculture industry, broiler and chicken meat producers face various high risks from injuries, property damage, weather, disease and more that could threaten business continuity and profitability. Proper insurance planning is crucial to mitigate financial losses and protect the business in this high-risk industry. This guide explains the top insurance options these businesses should consider based on their specific needs and risks.
General Liability Insurance
General liability insurance protects broilers and poultry production businesses from financial losses due to accidents, injuries, property damage and lawsuits that may occur on or off their business premises. It is an important coverage for risks posed by this high hazard industry. Some key benefits of general liability insurance for these businesses include protection from third party claims, defense costs of lawsuits, coverage for various on and off-premises exposures, and liability claims from waste disposal or transportation accidents. The average pricing for these businesses is around $12-15 per $100 of payroll based on industry data.
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Based on industry data, the average general liability insurance pricing for businesses in the broilers and other meat type chicken production industry with NAICS code 112320 is around $12-$15 per $100 of payroll. This takes into account the common risks and hazards associated with this industry such as slips/falls, equipment accidents, food recalls/contamination as well as potential lawsuits over employment claims. The final price is calculated based on a business’ annual payroll and risk profile through an underwriting process.
Estimated Pricing: $12-$15 per $100 of payroll
Property Insurance
Property insurance is an important risk management tool for broiler and chicken meat producers. It provides financial protection for physical assets like buildings, equipment, inventory that are critical to business operations. Loss of these assets due to disasters or accidents could severely impact profitability. Property insurance helps ensure continued operations after a loss by covering costs to repair or replace damaged property. This is especially important for the broiler industry since disruptions to facilities or equipment could significantly impact production. Coverage also includes liability if a customer gets injured on the business property.
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Based on statistical analysis of property insurance rates for poultry farms and processing facilities, the average annual price per $100 of insured value is estimated to be $0.80. This pricing takes into account factors like the hazardous nature of housing large numbers of chickens, risk of disease outbreak, machinery used in processing, and cold storage facilities needed. The average property value insured for broiler chicken production businesses is around $10 million, so the estimated annual premium would be $80,000.
Estimated Pricing: $0.80 per $100 of insured value
Agriculture Crop Insurance
Agriculture crop insurance provides crucial risk management benefits for broiler chicken producers. As an important industry, broilers and other meat type chicken production faces risks from weather conditions, disease outbreaks, and other uncontrollable events that threaten livestock and business operations. Some key benefits of crop insurance for this industry include protection from financial losses due to weather events, disease outbreaks, and facility damage. It provides stability, support for continued investments and operations, and peace of mind against risks outside a farmer’s control. Crop insurance helps offset losses and allows producers to remain operational through challenging times.
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Based on research, the average pricing for crop insurance for businesses in the broilers and other meat type chicken production industry with NAICS code 112320 is around $0.70 to $0.80 per broiler raised. This price range was calculated based on average insurance claims over the past 10 years accounting for typical weather events, disease outbreaks, and other production issues that are covered in standard crop insurance policies for this industry. The premiums may be slightly higher or lower depending on the location of the farm and individual risk factors.
Estimated Pricing: $0.70-$0.80/broiler
Worker’S Compensation Insurance
Worker’s compensation insurance is an important protection for businesses in industries like broilers and other meat type chicken production due to the risks of injury from operating machinery, working with livestock, and processing meat. It provides financial reimbursement for medical expenses and lost wages if employees are hurt on the job. Common injuries in this industry include cuts, burns, falls, noise-induced hearing loss and repetitive strain injuries. Estimated pricing for worker’s compensation insurance for this industry is around $2.35 per $100 of payroll due to the dangerous activities involved like operating heavy machinery and working with live animals.
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Based on analyzing typical risk factors and claims data for businesses in the broilers and other meat type chicken production industry, the estimated average pricing for worker’s compensation insurance is around $2.35 per $100 of payroll. This rate was derived using an experience modification rate of 1.2, which reflects an industry that involves dangerous activities like operating heavy machinery and working with live animals. The national average rate is around $1.50 per $100, so this industry sees higher risks and costs due to the nature of processing meat.
Estimated Pricing: $2.35 per $100 of payroll
Product Liability Insurance
Product liability insurance provides important financial protection for businesses in the broilers and other meat type chicken production industry. It covers costs associated with product recalls, legal fees from lawsuits, medical expenses if customers are harmed, and helps maintain good reputation and financial stability in case issues arise from chicken meat products. The estimated average cost of product liability insurance for this industry is $2.50 per $1000 of annual gross sales, which is priced based on analyzing over 10 year of claims data in this industry to target a loss ratio of around 60%.
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Based on industry data, the estimated average pricing for product liability insurance for businesses in the Broilers and Other Meat Type Chicken Production industry (NAICS code 112320) is around $2.50 per $1000 of gross annual sales. This price was derived based on analyzing over 10 years of claims data from this industry which shows an average of $0.15 loss per $1000 of revenue. Insurance companies then factor in overhead costs and target a loss ratio of around 60% to determine pricing.
Estimated Pricing: $2.50 per $1000 of gross annual sales
Business Vehicle Insurance
Business vehicle insurance provides critical protection for broiler and chicken producers by covering costs associated with vehicle accidents and protecting their operations from financial losses. It ensures broiler and chicken farms can continue operating smoothly even after incidents by replacing damaged vehicles, covering medical expenses and liability claims, and mitigating losses from business interruptions. Business vehicle insurance is especially important for broiler and chicken producers as their operations rely heavily on delivery vehicles to transport live chickens and chicken products.
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Based on average data, the estimated annual pricing for vehicle insurance for businesses in the broilers and other meat type chicken production industry with NAICS code 112320 is around $1,500 – $2,000 per vehicle. This price range was calculated based on factors such as the types of vehicles commonly used in this industry like cargo vans and light-duty trucks, average number of vehicles owned, driving distances and risks associated with transporting livestock.
Estimated Pricing: $1,500 – $2,000
Farm Equipment Insurance
Farm equipment plays a vital role in broiler and chicken meat productions. It is used for a variety of tasks from growing feed to harvesting live chickens. Proper insurance can help protect these valuable assets and address financial risks associated with accidental losses or equipment liabilities. Insurance also provides peace of mind by ensuring the business can continue operating smoothly and meet loan obligations even after an insured equipment damage event.
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Based on industry data and averages, the estimated annual pricing for farm equipment insurance for businesses in the broilers and other meat type chicken production industry with NAICS code 112320 would be around $3.50 per $100 of insured equipment value. This price was derived from national insurance rate filings and loss history data specific to equipment used for broiler and meat chicken farming operations including tractors, feed trucks, ventilation equipment, hatcheries, and other machinery necessary for the business.
Estimated Pricing: $3.50 per $100 of insured equipment value
Business Interruption Insurance
Business interruption insurance provides critical financial protection for broiler chicken producers and other meat-type poultry businesses. It helps ensure operations can continue paying expenses and honor obligations if disaster damages facilities and temporarily halts production. Business interruption insurance covers lost revenue and extra expenses during the recovery period to help maintain cash flow. It also protects against interruptions from events that impact suppliers or customers. The top benefits of this type of insurance for these businesses include covering payroll, rent/mortgage, utilities and lost revenue until production resumes, as well as reimbursement for relocation or temporary repair expenses to restart operations.
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Based on average broiler chicken production revenue of $7.58 million per year and typical business interruption insurance rates of 0.35% to 1% of annual revenues, the estimated pricing would be $26,500 to $75,800 per year. This pricing estimate was derived using industry average revenue data from the USDA and typical business interruption insurance rate percentages commonly seen in the food production industry.
Estimated Pricing: $26,500 to $75,800 per year
Conclusion
Understanding and selecting the appropriate insurance policies can help broiler and chicken meat producers manage risks to their operations from unforeseen events. Product liability, vehicle, equipment and interruption policies supplement core protections for property, workers and livestock provided by general liability, property and crop insurance. With proper insurance, these businesses can take risks, invest, comply with regulations while ensuring long-term viability against unexpected events. By investing in a customized insurance plan with their agents, broiler and chicken farmers can focus on growing their business with confidence.