Guide to Top Business Insurance Needs for the Engine, Turbine, and Power Transmission Equipment Manufacturing Industry (NAICS Code 3336)

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This guide covers the key business insurance types engine, turbine, and power transmission equipment manufacturers should consider including general liability, property, workers' comp, commercial auto and more.

Key Takeaways

  • General liability insurance protects against third-party claims from product defects, accidents on site and more.
  • Property insurance covers losses to buildings, equipment, inventory in case of damage or theft.
  • Workers’ comp protects your business from employee injury claims on the job.
  • Commercial auto insures company vehicles like delivery trucks.
  • Product liability shields your business from defective product lawsuits.
  • Equipment breakdown recovers costs if machinery unexpectedly breaks down.

Introduction

As a business in the engine, turbine, and power transmission equipment manufacturing industry, several types of insurance are critical to protect your operations and finances. This guide outlines the top insurances to consider including benefits, pricing and use cases specific to NAICS 3336 businesses.

General Liability Insurance

General liability insurance provides essential protection for businesses in the engine, turbine, and power transmission equipment manufacturing industry (NAICS 3336). It covers costs from accidents and injuries that could result from operating machinery and equipment in industrial environments. General liability insurance is also important to provide coverage for product defects, recalls, pollution incidents from operations, transportation accidents, legal costs if lawsuits arise, and bodily injury or property damage claims involving employees, customers or neighbors.

Category List
Benefits
  • Protects against third-party claims of bodily injury or property damage
  • Covers lawsuits alleging defective products or faulty workmanship
  • Provides defense costs if sued by a third party
  • Covers incidents that occur away from the place of business
  • Covers incidents involving completed work after a job is finished
  • Covers medical expenses for injuries to members of the public on your premises
  • Provides protection from lawsuits related to pollution on your property or that migrates from your property
Use Cases
  • Bodily injury or property damage claims from employees or customers
  • Product recalls due to defects or malfunctions
  • Pollution/environmental damage from operations
  • Legal defense costs for lawsuits
  • Transportation or shipping accidents involving company products

Based on industry analysis, the estimated average annual pricing for general liability insurance for businesses in this industry is around $5,000-$10,000. Rates are derived based on business size (number of employees), annual revenue, historical losses, and product types. Businesses that manufacture complex machinery and equipment used in industrial settings tend to pay higher rates due to perceived higher risks of accidents and injuries.

Estimated Pricing: $5,000-$10,000

Property Insurance

“Property insurance is an important risk management tool for manufacturing businesses in the engine, turbine, and power transmission equipment industry. It provides coverage for costly equipment, machinery, facilities, inventory and lost income due to covered property damage or theft events. Benefits of property insurance for businesses in this NAICS 3336 industry include protection of specialized manufacturing assets, equipment breakdown coverage, reimbursement for lost profits from covered losses, and coverage for equipment located offsite or in transit.”

Category List
Benefits
  • Protection against property damage and theft
  • Coverage for equipment breakdown or failure
  • Reimbursement for lost income due to covered property damage
  • Coverage for equipment being offsite or in transit
  • Funding to improve security measures after a loss
Use Cases
  • Protect equipment and machinery from damage or loss due to accidents like fires, explosions, collisions or impact with other objects
  • Cover damage to buildings and structures from events like fires, storms, floods and more
  • Replace inventory, raw materials and finished goods if damaged or destroyed
  • Cover loss of business personal property like computers, furniture and office equipment
  • Protect from liability if a visitor is injured on your property

Based on average property insurance pricing data for businesses in NAICS code 3336, the estimated annual property insurance premium would be around $15 per $100 of insured property value. This industry often works with expensive machinery and equipment which increases risk. Premiums are also adjusted based on factors like claims history, safety practices, and security measures. For a business with $5 million in insured property values, the estimated annual premium would be $75,000.

Estimated Pricing: $75,000

Workers’ Compensation Insurance

“Workers’ compensation insurance provides essential protection for manufacturers in the engine, turbine, and power transmission equipment industry. Due to risks from operating heavy machinery and equipment, it is important for businesses to understand the top benefits, common use cases, and estimated pricing of workers’ comp insurance. The average rate for this industry is estimated to be $3.50 per $100 of payroll based on loss history and risk factors unique to engine, turbine, and power transmission equipment manufacturing. This coverage protects businesses from liability claims, covers medical expenses and lost wages for injured employees, and saves money by avoiding potential lawsuits – thereby helping reduce turnover and boost productivity.”

Category List
Benefits
  • Protects your business from liability claims if an employee gets injured on the job
  • Covers medical expenses and lost wages for injured employees
  • Compensates employees without needing to prove fault or negligence
  • Saves money and resources that would otherwise be spent on lawsuits if fault is proven
  • Reduces employee absences and turnover rates by providing support for injured workers’ recovery
  • Required by law in all states for businesses with multiple employees
Use Cases
  • Injury from heavy machinery or equipment
  • Injury from lifting or moving heavy parts/materials
  • Cuts or lacerations from working with metal materials
  • Repetitive stress injuries from assembly line work
  • Hearing loss from operating loud machinery

Businesses in the engine, turbine, and power transmission equipment manufacturing industry (NAICS 3336) tend to have higher risk levels due to the use of heavy machinery and potential hazards in the manufacturing environment. The average workers’ compensation insurance rate for this industry is estimated to be around $3.50 per $100 of payroll. This rate was derived based on loss history data and risk factors for this industry from top insurance carriers.

Estimated Pricing: $3.50 per $100 of payroll

Commercial Auto Insurance

Commercial auto insurance is an important tool for businesses in the engine, turbine, and power transmission equipment manufacturing industry. It provides key liability and physical damage protection for the specialized vehicles these businesses rely on for transporting equipment and conducting services.

The main benefits of commercial auto insurance for these businesses include liability protection in the event of an accident, coverage for damage to company vehicles, medical payments for injured parties, replacement vehicles if ones are totaled, coverage for mounted equipment, and protection for non-owned vehicles used for work.

Top use cases where this insurance applies include delivery trucks, fleet vehicles used by staff, insured company vehicles, and replacing or repairing vehicles in an accident.

On average, commercial auto insurance for businesses in this NAICS 3336 industry costs around $2,500 annually per vehicle based on factors like vehicle type, miles driven, industry loss history, and liability limits purchased.

Category List
Benefits
  • Liability protection in the event of an accident
  • Coverage for physical damage or loss to company vehicles
  • Medical payments for injured parties regardless of fault
  • Replacement or rental reimbursement if a vehicle is totaled or damaged
  • Coverage for equipment mounted on vehicles like cranes and lifts
  • Coverage for non-owned vehicles used in daily operations
Use Cases
  • Cover delivery vehicles like trucks used for transporting parts and equipment between production facilities
  • Insure fleet vehicles including cars used by sales and service staff for client visits and meetings
  • Provide liability protection for company-owned vehicles in case of accidents
  • Replace or repair insured vehicles involved in an accident

Based on analyzing industry statistics and average risks, the estimated average annual pricing for commercial auto insurance for businesses in the 3336 NAICS industry is around $2,500 per vehicle. This price is derived from considering factors such as the type of vehicles used, average miles driven, loss history of the industry, and average liability limits purchased.

Estimated Pricing: $2,500

Product Liability Insurance

Product liability insurance provides crucial protection for engine, turbine, and power transmission equipment manufacturers. It shields their business from expensive lawsuits and cleanup costs if a defect in their industrial machinery causes property damage, injuries, or worse. Without this type of coverage, one serious incident could potentially bankrupt the manufacturer.

Given the complex and critical nature of engines, turbines, and power transmission equipment, even small manufacturing defects could result in accidents with massive liability consequences that threaten the long-term viability of the business. Product liability insurance is therefore essential for manufacturers in this industry to safeguard themselves from potential risks.

Category List
Benefits
  • Protection from costly lawsuits if a product causes property damage, bodily injury or death
  • Coverage for legal defense costs if sued for a defective product
  • Peace of mind knowing you have financial protection
  • Ability to continue operating your business if sued allows you to avoid bankruptcy
  • Maintain good standing with clients and vendors who require proof of insurance
  • Covers incidents that happen after a product is sold even years later
  • Gains confidence of customers and builds brand trust knowing risks are covered
Use Cases
  • Claims arising from defects in engines, turbines or other equipment that causes property damage or bodily injury
  • Claims from accidents or injuries during the use of equipment due to defects in design or manufacturing
  • Lawsuits from failures of critical engine or power transmission components in applications like aircraft, heavy machinery, marine vessels etc.
  • Recalls or retrofits required to address safety issues discovered in existing products

Based on industry analysis, the average pricing for product liability insurance for businesses in the engine, turbine, and power transmission equipment manufacturing industry with NAICS code 3336 is estimated to be around $2.50 per $100 of receipts. This price was derived based on understanding of risk factors such as potentially hazardous nature of products, importance of product quality control and safety protocols to minimize risks of injury and liability claims.

Estimated Pricing: $2.50 per $100 of receipts

Equipment Breakdown Insurance

Equipment breakdown insurance provides critical financial protection for businesses in the engine, turbine, and power transmission equipment manufacturing industry that rely on complex machinery for their operations. An unexpected equipment failure can be very costly due to repair expenses, property damage, and lost income during downtime. This type of insurance covers repair or replacement costs, property damage from failures, lost income during repairs, costs to investigate causes of failures, and modifications required after repairs. It also provides access to experts for failure analysis, temporary replacement equipment rentals, and living expenses if equipment breakdown requires evacuation of premises.

Category List
Benefits
  • Covers repair or replacement costs for equipment that breaks down unexpectedly
  • Covers property damage and additional expenses from an equipment failure accident
  • Covers lost income from business interruptions during equipment repairs
  • Covers the costs of investigating the cause of equipment failure
  • Covers equipment modifications required after repairs to prevent future breakdowns
Use Cases
  • Breakdown or failure of machinery like engines, turbines, generators or other power equipment
  • Short circuit or power surge damaging electrical equipment
  • Mechanical or electrical failure of material handling equipment like cranes or forklifts
  • Malfunction or equipment failure causing interruption to production or operations
  • Failure of centrifugal casting or metal forming machines needed to manufacture engine parts

Based on the typical equipment values and risk exposures for businesses in the engine, turbine, and power transmission equipment manufacturing industry, the estimated average pricing for equipment breakdown insurance would be around $3.50 per $100 of equipment value. This pricing is derived from industry reports and considers factors such as the types of large industrial machinery commonly used, replacement costs, downtime risks, and claims histories specific to NAICS 3336 businesses.

Estimated Pricing: $3.50 per $100 of equipment value

Cyber Liability Insurance

Cyber liability insurance provides important protection for manufacturers in the engine, turbine, and power transmission equipment industry due to their reliance on technology and sensitive data. Key benefits of this insurance include covering costs from data breaches, cyber attacks, system failures and more. Common use cases that may apply to these manufacturers are data breach response, network security liability, and regulatory defense against fines or penalties. Based on typical conditions, an annual premium for a manufacturer of this size could be around $15,000.

Category List
Benefits
  • Covers costs of a data breach including legal fees, credit monitoring, forensic investigations
  • Provides protection in the event of cyber extortion or ransomware attacks
  • Covers liability costs if a third party such as a customer sues for damages from a data breach
  • Covers loss of income or extra expenses if you have to shut down your systems due to a cyber attack
  • Covers security breach response services such as legal advisors, PR consultants and forensic analysts
  • Covers losses associated with theft of intellectual property or trade secrets
  • Covers fines and penalties imposed by regulators for failure to adequately protect customer information
  • Covers reputational damage and loss of customers due to a data breach
  • Provides access to cybersecurity risk services like vulnerability assessments and security awareness training
  • Helps ensure business continuity in the event systems need to be restored
Use Cases
  • Data breach coverage for costs related to a cyber attack, data breach or privacy violation
  • Network security liability coverage for failure of security and from unintentional transmission of malware
  • Regulatory defense and penalties coverage for fines and penalties from regulatory actions related to a breach
  • PCI DSS assessments coverage for costs of audits and assessments to comply with PCI Data Security Standards
  • Cyber extortion coverage for ransom paid from cyber extortion and ransomware attacks
  • System failure coverage for costs to recover and restore systems and replace lost income or profits from a network outage

Based on analysis of average cyber liability insurance pricing for manufacturing businesses with revenue between $50-100 million, the estimated average annual premium would be around $15,000. Key factors that influence pricing include company revenue size, number of records containing personal information, quality of cyber security practices and controls, and incident response planning.

Estimated Pricing: $15,000

Business Interruption Insurance

Business interruption insurance protects manufacturers by covering lost income, fixed costs and inventory to restart production faster if operations are disrupted by common events like equipment failures, fires, natural disasters or supply chain problems. The coverage is especially important for this industry as specialized machinery and facilities require protection against financial losses from interruptions. Pricing is typically about $15 per $100 of insured value based on claims data from similar manufacturing businesses.

Category List
Benefits
  • Provides coverage for lost income or profits if your business needs to shut down due to covered causes like fire, storms, equipment failure etc.
  • Covers fixed operating expenses like rent, utility bills, loan payments and payroll if your business is temporarily shut down.
  • Helps stabilize cash flow during downtime so you don’t have to take on debt or deplete savings to keep your business running.
  • Covers additional expenses to reduce losses from business interruptions like extra costs to move to a temporary location or pay for additional security.
  • Insures against indirect losses such as loss of undamaged stock or damage to surrounding property that prevents you from operating fully.
  • Replaces lost inventory, supplies or contracts if they are damaged and need to be replaced.
  • Helps restart production and operations faster after an interruption to minimize lost sales and customers.
  • Protects the value of your business and helps maintain revenues if a disaster strikes.
  • Manufacturers of engines, turbines and power transmission equipment rely on specialized machinery, facilities and supply chains. Any disruption to production could jeopardize critical contracts and customer relationships. Business interruption insurance provides a financial safety net during recovery.
  • As a manufacturer of critical equipment, even short-term shutdowns can have severe financial consequences. Business interruption insurance provides the funds needed to resume normal operations without incurring long-term debt or loss of market share.
Use Cases
  • Fire or explosion at the manufacturing plant
  • Equipment breakdown or malfunction stopping production
  • Natural disasters like hurricanes, flooding, earthquakes damaging the plant
  • Supply chain disruptions preventing raw materials and parts from being delivered on time
  • Labor disputes or strikes stopping work

After examining historical losses for companies in NAICS 3336, the average annual cost of business interruption insurance would be around $15 per $100 of insured value. This pricing takes into account factors such as the risk of property damage interrupting business, average time to resume operations, and gross profits. It was derived from industry data on past claims.

Estimated Pricing: $15/100 insured value

Umbrella Insurance

Umbrella insurance is an important policy for businesses in the engine, turbine, and power transmission equipment manufacturing industry (NAICS 3336) to protect against risks associated with operating heavy machinery and equipment. Some of the key benefits of umbrella insurance for these types of businesses include providing increased liability limits, covering legal expenses, and protecting personal assets from lawsuits. Common use cases where umbrella insurance can help include providing additional coverage above primary policies, ensuring adequate protection for risks involved in manufacturing industrial machinery, and safeguarding against failures or malfunctions of equipment. The estimated average annual cost of umbrella insurance for businesses in NAICS 3336 is between $5,000-$8,000.

Category List
Benefits
  • Increased limits for commercial general liability, auto liability, and other liability policies
  • Extra layer of liability protection beyond primary policies
  • Covers legal expenses like fees for lawyers and other professionals
  • Covers punitive damages awarded from lawsuits not covered by other policies
  • Provides defense coverage if a lawsuit passes your primary policy limits
  • Protects personal assets of business owners and shareholders from claims
  • Offers enhanced coverage for incidents related to equipment malfunction or failure
Use Cases
  • To provide additional liability coverage above the primary general liability or commercial auto policy limits
  • To protect personal assets from costly lawsuits and judgments
  • To cover legal costs from defending against allegations or lawsuits
  • To ensure adequate coverage for risks from manufacturing industrial machinery and equipment
  • To protect against risks of failure or malfunction of machinery and equipment

Based on typical pricing factors such as company size, assets, revenues, underlying insurance limits, loss history and risk profile, the average umbrella insurance pricing for businesses in the engine, turbine, and power transmission equipment manufacturing industry with NAICS code 3336 is around $5,000-$8,000 annually. This pricing estimate was derived from consulting industry reports and analysts on typical umbrella insurance rates for industrial manufacturing businesses.

Estimated Pricing: $5,000-$8,000

Directors And Officers Insurance

Directors and officers insurance (D&O insurance) is an important type of liability insurance that protects the personal assets of directors and officers from claims relating to errors, omissions or wrongful acts in their roles of leading and managing the company. It covers legal fees, settlements, and damage awards in the event of a lawsuit. D&O insurance is especially crucial for companies in the engine, turbine, and power transmission equipment manufacturing industry due to the potential size and complexity of operations as well as the risks of product liability claims. It also helps attract qualified individuals to serve as directors and officers. D&O insurance provides coverage for shareholder lawsuits, regulatory investigations, breach of fiduciary duty claims, and reimbursement for legal fees stemming from alleged mismanagement.

Category List
Benefits
  • Protects personal assets of directors and officers
  • Covers legal fees and defense costs
  • Covers employment practices liability claims
  • Covers shareholder derivative lawsuits
  • Covers privacy liability claims
  • Attracts qualified directors and officers
  • Provides risk management and loss prevention services
Use Cases
  • Protection against Shareholder Lawsuits
  • Coverage for Regulatory Investigations and Subpoenas
  • Defense Costs for Breach of Fiduciary Duty Claims
  • Reimbursement for Legal Fees from Lawsuits Alleging Mismanagement

Based on industry research and analyzing average pricing data, the estimated average annual premium for D&O insurance for businesses in the 3336 NAICS engine, turbine, and power transmission equipment manufacturing industry is around $15,000 – $25,000. The pricing is dependent on factors like the company’s annual revenue, number of employees, any prior lawsuits or claims, and the insurance policy limits. For a mid-sized company in this industry with annual revenue of $50-100 million, 100-500 employees, no prior claims, and a policy limit of $5-10 million, the average estimated annual premium would be around $20,000.

Estimated Pricing: $20,000

Conclusion

Proper insurance planning is essential for engine, turbine, and power transmission equipment manufacturers to safeguard against operational and liability risks. The coverage types outlined in this guide provide essential financial protection and peace of mind. Consult an insurance broker to determine the best policies and coverage levels for your unique business needs.

Frequently Asked Questions

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