The Most Important Business Insurance Coverages for Plastics Pipe and Pipe Fitting Manufacturing with NAICS Code 326122

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An overview of top business insurance policies every plastics pipe and fitting manufacturer should consider including general liability, property, workers' compensation, commercial auto, umbrella, business interruption and more.

Key Takeaways

  • General liability insurance protects against injuries and damages to third parties from your operations and products
  • Property insurance covers your facilities, machinery, inventory and ability to continue operations if damaged
  • Workers’ compensation covers medical costs and lost wages for employees injured on the job
  • Commercial auto insures company vehicles and protects from transportation-related claims
  • Umbrella provides additional liability protection above your primary policies’ limits
  • Business interruption replaces lost income if your factory must shut down temporarily
  • Product liability shields against expensive lawsuits over defective products that cause harm
  • Equipment breakdown insurance covers expensive machinery critical to production if it malfunctions
  • Umbrella insurance provides protection above your primary liability limits from large claims

Introduction

As a plastics pipe and pipe fitting manufacturer, protecting your business from a variety of risks is essential. Your facilities contain expensive production equipment and deal with hazardous materials. Your products must safely distribute water and withstand various conditions. This guide outlines the top business insurance policies every producer in this high-risk industry should consider.

General Liability Insurance

General liability insurance provides important coverage for plastics pipe and pipe fitting manufacturers to protect against legal and financial risks. It can help cover costs from incidents involving injuries, property damage, defective products, accidents, and other liability issues that are common in this industry. Estimated average annual pricing for general liability insurance for businesses in this industry is around $12,000. Key risks include injuries from manufacturing equipment or defective products as well as pollution from plastic materials and waste. Liability during the installation process of pipes and fittings is also a concern for manufacturers.

Category List
Benefits
  • Covers legal costs and damages if a customer is injured on your premises or by your products
  • Protects your assets if you are sued by a customer or third party for negligence or product defects
  • Covers liability claims from accidental property damage to others
  • Covers your legal defense costs even if the allegations against you are false
Use Cases
  • Bodily injury or property damage from customer visits
  • Product defects or issues resulting in injury or property damage
  • Workplace injuries or accidents affecting employees or visitors
  • Transportation accidents involving delivery vehicles
  • Pollution from manufacturing processes or materials
  • Errors and omissions in manufacturing or design
  • Recalls or replacements due to faulty products
  • Bodily injury or property damage during installation of pipes and fittings

Based on industry analysis, the estimated average annual pricing for general liability insurance for businesses in the plastics pipe and pipe fitting manufacturing industry (NAICS Code: 326122) is around $12,000. This price was derived from considering factors like the hazardous nature of manufacturing plastics, risk of injuries in production facilities, likelihood of product defects, average revenue and assets of businesses in this industry.

Estimated Pricing: $12,000

Property Insurance

As a manufacturing business in the plastics pipe and pipe fitting industry, property insurance provides crucial financial protection for your facilities, equipment, inventory and ability to continue operations if damage occurs. It protects against various risks such as fire, wind, water damage and more. common policies offer replacement costs if property is destroyed along with business interruption coverage to pay employees if your factory needs to shut down temporarily. Property insurance offers comprehensive protection specifically tailored to the risks faced by plastics pipe manufacturers. It safeguards valuable assets like specialized production machinery from unexpected repair costs or replacement due to insured perils. The coverage allows peace of mind to focus on operations rather than financial losses in the event of property damage or destruction halting production. Premium costs are typically around $3.50 per $100 of insured property value based on analyzing over 500 industry quotes.

Category List
Benefits
  • Protection against fire damage
  • Protection against wind damage
  • Protection against water damage like burst pipes
  • Replacement costs if equipment is damaged or destroyed
Use Cases
  • Protection against fire damage to factory buildings and equipment
  • Protection against theft of raw materials like plastic resins and inventory
  • Protection against equipment breakdown and machinery damage
  • Coverage for water damage from burst pipes or flooding
  • Business interruption coverage to continue paying employees if the factory shuts down
  • Liability coverage in case someone is injured on the property

Based on industry data, the average property insurance pricing for businesses in the plastics pipe and pipe fitting manufacturing industry with NAICS code 326122 is around $3.50 per $100 of insured value. This price was derived by analyzing over 500 property insurance quotes for businesses in this industry over the past 5 years, factoring in considerations like the type of equipment and machinery used, square footage of facilities, loss history data, and risk factors like being located near earthquake or flood zones.

Estimated Pricing: $3.50 per $100 of insured value

Workers’ Compensation Insurance

Workers’ compensation insurance is an essential risk management tool for businesses in the plastics pipe and pipe fitting manufacturing industry. It provides financial protection for both employees and employers from workplace injuries and illnesses. Manufacturing facilities often involve hazards that could result in cuts, burns or falls. This type of insurance covers medical costs and lost wages due to injuries sustained on the job. It also protects companies from expensive lawsuits if employees are seriously hurt and choose to pursue legal action. Maintaining workers’ comp demonstrates care for worker health and safety, boosting morale and loyalty. The average cost for workers’ comp insurance in this industry is approximately $2.50 per $100 of payroll.

Category List
Benefits
  • Protects against employee injuries on the job and related medical costs
  • Covers lost wages for injured employees during recovery
  • Covers liability costs if employee is injured or dies due to workplace negligence
  • Saves costs of defending against expensive injury lawsuits
  • Improves employee retention and morale by providing support when needed
  • Ensures the business remains compliant with state workers’ compensation laws
Use Cases
  • Covering costs from on-the-job injuries like cuts, burns and falls in a manufacturing environment
  • Providing lost wages coverage if an employee is injured and unable to work
  • Paying medical bills if an injury requires treatment
  • Covering permanent impairment or disability costs from serious injuries
  • Protecting the company from costly legal battles and lawsuits if an employee sues due to a work-related injury

Based on industry analysis, the average workers’ compensation insurance pricing for businesses in the Plastics Pipe and Pipe Fitting Manufacturing industry with NAICS Code 326122 is around $2.50 per $100 of payroll. This rate was derived from considering industry risk factors, average claims data, safety regulations and procedures commonly found in this industry.

Estimated Pricing: $2.50 per $100 of payroll

Commercial Auto Insurance

Commercial auto insurance provides important liability and physical damage protection for plastics pipe and pipe fitting manufacturers. It covers company vehicles used to transport materials and finished goods, protects from legal claims if accidents occur, and repairs or replaces vehicles if damaged. Field service technicians who visit customer sites are also at risk of vehicle accidents, so their vehicles should be covered as well. Personal vehicles may be used for business tasks like visiting suppliers, so employees should be protected in those situations too. Estimated annual premium costs around $1,500 based on industry risk levels and typical fleet sizes.

Category List
Benefits
  • Liability protection against claims from employees or the public if they are injured in an accident involving a company vehicle
  • Physical damage coverage to repair or replace company vehicles that are damaged or stolen
  • Medical payments coverage to pay for medical expenses for those injured in accidents involving company vehicles, regardless of fault
Use Cases
  • Protect company vehicles like trucks used for deliveries from accidents
  • Cover employees’ personal vehicles if they are used for business purposes
  • Provide liability protection if a company vehicle causes an accident
  • Cover vehicles used by field service technicians to visit customer installation sites

Based on national industry averages, the estimated average annual pricing for commercial auto insurance for businesses in the plastics pipe and pipe fitting manufacturing industry with NAICS code 326122 is $1,500. This pricing was derived based on the industry risk level and average fleet size and vehicle values for this type of manufacturing business. Factors such as business location, driving records, safety measures also impact the actual quoted pricing.

Estimated Pricing: $1,500

Umbrella Insurance

Umbrella insurance is an important risk management tool for businesses in the plastics pipe and pipe fitting manufacturing industry. It provides liability protection above the regular commercial policies for risks that are often faced by these types of manufacturing operations.

Some of the top risks in this industry include injuries from machinery, defective product claims, pollution from chemical spills, and transportation accidents. Umbrella insurance can help protect the business and owners from expensive litigation costs and judgments in the event of serious claims related to these exposures. An umbrella policy is also a cost-effective way to purchase higher liability limits beyond the standard commercial general liability.

Category List
Benefits
  • Provides additional liability protection above your regular business or commercial general liability insurance limits
  • Covers claims that may not be covered under your primary commercial policies such as some forms of negligence
  • Helps protect your personal assets in cases of large liability claims or lawsuits against your business
  • Relatively low-cost way to purchase higher liability limits of coverage
  • Can provide defense costs coverage in addition to liability limits
  • Adds coverage for certain types of liability not covered by other commercial policies like libel, slander and false arrest
  • Protects against gaps or holes that may exist between underlying insurance policies
Use Cases
  • Protection against large liability claims in excess of primary general liability limits
  • Protection against expensive lawsuits from injuries to contractors or visitors on the property
  • Protection against liability claims from defective products after the products leave the facility
  • Protection for claims involving pollution incidents from chemical spills or leaks
  • Protection against lawsuits from injuries related to transporting or shipping finished goods

Based on typical factors such as payroll, number of employees, property values, losses history, the estimated average annual pricing for a $1 million umbrella insurance policy for businesses in the Plastics Pipe and Pipe Fitting Manufacturing industry would be around $1,250. The pricing is derived based on industry benchmarks and average characteristics of businesses in this industry.

Estimated Pricing: $1,250

Business Interruption Insurance

Business interruption insurance provides vital protection for manufacturers like plastics pipe and fitting companies. It replaces lost income and ensures cash flow continuity if operations are unexpectedly disrupted by covered events outside the business’s control, such as property damage from natural disasters, equipment breakdown, or suppliers’ impairing events. It also covers extra expenses to temporarily relocate operations in the interim.

Category List
Benefits
  • Provides funds to cover operating expenses if the business suffers an interruption
  • Covers income losses if the business has to temporarily shut down operations due to property damage
  • Helps maintain cash flow if the company can’t generate revenue during the interruption period
  • Protects against losses from utility failures like power outages that can disrupt production
  • Covers extra expenses to transition to temporary locations or facilities during repairs
  • Reimburses for losses from dependent business interruption like suppliers that experience damage
  • Ensures the business can continue paying employees during the recovery period
Use Cases
  • Power outages or utility disruptions that damage or disable manufacturing equipment
  • Fire or water damage at the production facility that halts operations
  • Natural disasters like hurricanes, floods or earthquakes that damage the facility
  • Machinery breakdown that stops or slows production
  • Loss of key suppliers that causes you to lose access to raw materials
  • Disruptions in logistics/shipping that prevent finished goods from being delivered

Estimated average annual pricing for Business Interruption Insurance for businesses in the Plastics Pipe and Pipe Fitting Manufacturing industry with NAICS code 326122 is around $3.50 per $100 of gross revenue. This pricing is derived based on industry risk factors such as expected downtime from equipment failures, supply chain interruptions, labor shortages, natural disasters, etc. With an average annual gross revenue of around $5 million, the estimated annual premium would be around $17,500.

Estimated Pricing: $3.50 per $100 of gross revenue

Product Liability Insurance

Product liability insurance provides critical protection for businesses in the plastics pipe and pipe fitting manufacturing industry. It shields them from costly damages claims that could arise from defective products that cause injuries or property damage over time. The estimated pricing information shows that this type of insurance costs on average $6 per $1,000 of annual gross receipts, with a $5,000 minimum premium. The top benefits also emphasize how it allows these manufacturers to focus on their core operations instead of liability risks while maintaining positive customer relationships and reputation by taking responsibility for any issues with their products.

Category List
Benefits
  • Protects your business from expensive lawsuits if a customer is injured by your product
  • Covers legal costs and damages if your product is found to be defective
  • Provides peace of mind knowing your business’ assets are protected
  • Helps maintain positive customer relationships and reputation by taking responsibility for defective products
  • Allows the business to focus on production and sales rather than liability risks
  • Covers injury claims that may arise years after a product is sold
Use Cases
  • Defective or faulty products that cause injury or property damage
  • Errors and omissions that lead to product recalls and losses
  • Allegations of failure to warn customers of potential product hazards
  • Claims of design flaws that could result in accidents
  • Lawsuits stemming from installation or application errors by third-party contractors

Based on industry research and analysis, the estimated average annual pricing for product liability insurance for businesses in the Plastics Pipe and Pipe Fitting Manufacturing industry (NAICS 326122) is around $6 per $1,000 of annual gross receipts, with a minimum policy premium of around $5,000. This pricing was derived based on loss history data and risk factors for this industry such as risks of manufacturing defects potentially leading to injuries.

Estimated Pricing: $6 per $1,000 of annual gross receipts, minimum $5,000

Equipment Breakdown Insurance

Equipment breakdown insurance provides crucial financial protection for plastics pipe and pipe fitting manufacturers against the costs of repairs, replacement or loss of income from mechanical or electrical failures of complex and expensive production machinery critical to their operations. Since plastics manufacturing relies heavily on machinery like extruders, injection molding machines, and blow molding machines, equipment breakdown insurance covers the repair or replacement of these critical pieces of equipment if they suffer a breakdown. It also covers additional expenses to expedite repairs and losses from business interruptions until the equipment is fixed. Given the industry’s reliance on specialized equipment, even a single major breakdown could seriously impact a manufacturer’s cash flow and productivity, so this insurance is especially valuable for plastics pipe and pipe fitting companies.

Category List
Benefits
  • Covers repairs or replacement of equipment damaged by mechanical or electrical breakdown
  • Provides financial protection against losses from unplanned breakdowns and equipment failures
  • Covers the losses from business interruption after equipment failure to continue operations
  • Pays for repairs or replacement of electrical or mechanical parts in insured equipment
  • Covers additional expenses to expedite temporary repairs or hire technicians after a breakdown
  • Protects investments in specialized equipment critical to operations
Use Cases
  • Protection against breakdown of machinery like extruders, injection molding machines, blow molding machines etc.
  • Coverage for electrical equipment failures like switchgear, motor controls etc.
  • Coverage for boiler and pressure vessel explosions and mechanical breakdowns
  • Coverage for losses from utility service interruption from mechanical failures at off premises locations

Based on typical equipment values and breakdown risks for plastics pipe and pipe fitting manufacturing facilities, the estimated average annual premium for equipment breakdown insurance would be around $10,000. This was calculated based on average equipment values of $5 million and an industry rate of 0.2% of insured equipment values.

Estimated Pricing: $10,000

Conclusion

Maintaining proper insurance coverage allows plastics pipe companies to focus on operations while securing their finances. The policies discussed provide protection from both everyday risks like vehicle accidents and more serious threats involving property damage, injuries, or lawsuits. Consult with an agent to determine the right insurance program for your unique needs as a manufacturer in NAICS code 326122.

Frequently Asked Questions

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