The Most Important Business Insurances for Commercial and Service Industry Machinery Manufacturing with NAICS Code 333310

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An overview of the top business insurance policies all commercial and service industry machinery manufacturers should have to protect their business, including general liability, workers comp, property, business interruption and more.

Key Takeaways

  • General liability insurance protects against injury and property damage claims
  • Workers compensation coverage is required by law in most states
  • Property insurance covers costs to repair or replace buildings and equipment after disasters
  • Business interruption insurance reimburses lost income during disruptions
  • Commercial auto insurance covers vehicles used for business
  • Cyber liability insurance protects against cyber threats and data breaches

Introduction

Businesses in the commercial and service industry machinery manufacturing sector face a variety of risks that could result in costly lawsuits, property damage, disruptions to operations, and other financial losses. Carrying the proper types and amounts of business insurance can help protect a company’s assets and finances if the unexpected occurs. Some of the most important policies for these businesses to consider include general liability, workers compensation, property, business interruption, commercial auto insurance, and professional liability/errors & omissions insurance which protects against negligence claims involving engineering work.

General Liability Insurance

General liability insurance is an important type of coverage for businesses in the machinery manufacturing industry (NAICS 333310). It protects against claims arising from accidental injuries or property damage caused to third parties related to a company’s operations. Some key uses of general liability insurance for these businesses include protecting against bodily injury and property damage claims from customers on a company’s property, liability lawsuits from defective products or faulty work, and accidents during delivery and installation of machinery. Estimated average annual pricing for general liability insurance for businesses in this industry is around $4,500.

Category List
Benefits
  • Covers costs of lawsuits/legal claims if your business operations accidentally cause property damage or bodily injury to a third party
  • Protects business assets from being at risk if a lawsuit against the business is won by a third party
  • Helps reduce costs to operate the business by transferring risks of third party claims and lawsuits to an insurance company
  • Provides peace of mind by protecting the business financially against unpredictable risks from third party lawsuits and claims
  • Attracts more customers and clients by demonstrating your business is financially responsible through liability insurance coverage
  • Coverage extends to business property and locations in addition to vehicles and various business operations
Use Cases
  • Bodily injury or property damage claims from customers while on your property
  • Lawsuits from employees for workplace injuries not covered by workers’ compensation
  • Liability claims from faulty products or defective work
  • Bodily injury or property damage from vehicle accidents involving company vehicles
  • Pollution and environmental damage caused by business operations
  • Lawsuits from accidents involving delivered or installed machinery

Based on industry data and common rate tables, the estimated average annual pricing for general liability insurance for businesses in the machinery manufacturing industry (NAICS 333310) is around $4,500. This was calculated based on average revenue and employee counts for businesses in this industry. Factors like claims history, location, and additional insurance options can affect the final quoted price.

Estimated Pricing: $4,500

Workers’ Compensation Insurance

Workers’ compensation insurance provides employers coverage for employee injuries sustained on the job. It protects businesses from costly litigation and ensures employees receive timely medical care and lost wages for work-related incidents. Key benefits for machinery manufacturing businesses include coverage for injuries involving machinery, falling debris, cuts and burns common in this industrial sector. Pricing is estimated around $1.80 per $100 of payroll based on industry averages and claims data.

Category List
Benefits
  • Covers medical expenses and lost wages for injured employees
  • Protects against expensive litigation costs from on-the-job injuries or accidents
  • Required by law in all states except Texas
  • Reduces absenteeism and promotes a speedy recovery
  • Attracts quality job applicants by providing protection for on-the-job injuries
  • Improves employer-employee relations through fair compensation for job-related accidents
  • Positive public image as a company that cares for its employees
  • Pre-determined costs that are more predictable than lawsuit verdicts
Use Cases
  • Cover medical expenses and lost wages for employees injured on the job
  • Cover liability costs if an employee is injured and sues the business
  • Fulfill state workers’ compensation insurance requirements
  • Provide coverage for injuries involving heavy machinery like drills, mills, lathes that are commonly used in this industry
  • Cover costs of injuries from falling or flying debris or objects that can occur in a manufacturing environment

Based on industry data and average claims, the estimated average price for workers’ compensation insurance for businesses in the commercial and service industry machinery manufacturing with NAICS Code 333310 is around $1.80 per $100 of payroll. This price was derived from national industry averages, claims experience, risk factors such as types of machinery used, safety protocols, and number of employees.

Estimated Pricing: $1.80/100 of payroll

Property Insurance

Property insurance provides essential protection for machinery manufacturing businesses by covering costs to repair or replace damaged buildings, equipment, and other assets. It also protects lost income and helps maintain business continuity after a covered loss.

Given the expensive and specialized nature of equipment used in machinery manufacturing plants, property insurance is especially important. It protects the substantial financial investment in facilities and specialized machinery from accidental damage or disasters. Coverage options like replacement cost help ensure damaged assets can be restored to their original condition.

Category List
Benefits
  • Covers repair or replacement costs for buildings and equipment if they’re damaged
  • Pays for cleanup, debris removal and temporary relocation if a covered incident damages your property
  • Reimburses lost income if your business has to shut down temporarily for repairs after a covered loss
  • Covers liability if a customer is injured on your property
  • Protects the value of your business assets
  • Provides peace of mind knowing your assets and livelihood are protected
Use Cases
  • Protection against damage or loss to buildings and equipment from fires, explosions, hurricanes, tornadoes and other disasters
  • Coverage for equipment breakdown or mechanical failure
  • Coverage for business personal property like computers, furniture, inventory and supplies
  • Protection against theft or vandalism
  • Coverage for loss of income and extra expenses if a location has to temporarily shut down due to a covered property loss
  • Replacement cost coverage to repair or rebuild damaged property to its original condition
  • Ordinance or law coverage to pay for upgrading undamaged portions of the property to comply with current building codes

Based on average property insurance rates for machinery manufacturing businesses, the estimated annual property insurance pricing would be around $6.50 per $100 of insured property value. This pricing was derived from industry reports and takes into account factors like the types of machinery/equipment used, safety procedures/certifications, loss history, building materials/features, security systems, etc.

Estimated Pricing: $6.50 per $100 of insured value

Business Interruption Insurance

Business interruption insurance provides critical financial protection for machinery manufacturing businesses by reimbursing lost income and extra expenses incurred during unexpected disruptions or interruptions to normal business operations from covered perils like fire, equipment breakdown or natural disasters. It helps ensure continuity of operations and cashflow while repairs are undertaken after loss events.
Given the importance of machinery operations to this industry, business interruption coverage offers protection against losses from property damage, supply chain interruptions, inability to deliver finished goods, and other service disruptions that could jeopardize revenues and viability. Estimated premiums typically range from 0.5-1.5% of annual revenues.

Category List
Benefits
  • Continuous income during interruptions
  • Covers expenses if your business must temporarily shut down
  • Pays for relocation costs if your business relocates due to property damage
  • Covers extra expenses to maintain business operations
  • Reimburses lost income if your suppliers are disrupted
  • Protection against loss of revenue from customers who cannot visit your business during disruptions
  • Reimburses lost income if your suppliers are disrupted
Use Cases
  • Fire or explosion damage to the facility or machinery
  • Equipment failure or breakdown
  • Power outage or utility interruption
  • Natural disasters like hurricanes, floods or earthquakes
  • Vandalism or criminal damage
  • Supply chain disruption or inability to transport raw materials or finished goods due to external events

Based on typical pricing models, business interruption insurance for machinery manufacturing businesses (NAICS 333310) is usually priced at 0.5%-1.5% of annual revenues. This pricing is derived from considering factors like the insured value of business assets and inventory, fixed costs during interruption, earnings history, and claims experience of the specific industry. For a typical business in this industry with $10 million in annual revenues, the estimated annual premium would be $50,000-$150,000.

Estimated Pricing: $50,000-$150,000

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions (E&O) insurance, protects machinery manufacturers and other commercial service businesses from financial losses due to negligence claims made by clients. It covers legal fees and damages if found liable in a lawsuit over inadequate work, design flaws, product defects, or other professional errors.

Some key benefits of professional liability insurance for machinery manufacturers include protection from third-party negligence claims, coverage for legal costs of lawsuits, meeting contractual insurance requirements, and access to risk management services. Common use cases where the coverage applies involve claims over faulty designs, product defects, work injuries, and property damage during installations. Estimated annual premiums typically range from $5,000 to $10,000 based on factors like company size, revenue, risk level, and claims history.

Category List
Benefits
  • Protection from third-party claims of negligence, errors, or omissions
  • Coverage for legal costs if a lawsuit is filed against your business
  • Peace of mind knowing you have financial protection
  • Meets contractual requirements if clients or customers require you to carry liability coverage
  • Covers liability claims that occur after the policy period if the injury or damage was caused by an error or omission during the policy period
  • Provides access to risk management and loss prevention services to help reduce chances of errors and omissions
  • Deductibles are typically lower than general liability insurance
Use Cases
  • Protects the business from claims of professional negligence or errors and omissions.
  • Covers legal costs and damages if a customer sues for faulty workmanship, design flaws, or product defects.
  • Provides liability protection if an employee is accidentally injured on the job due to negligence.
  • Covers liability claims if a customer’s property or equipment is damaged during installation or servicing work.

Based on industry research and analysis of typical pricing factors such as company size, annual revenue, risk exposure, and claims history, the estimated average annual premium for professional liability insurance for a business in the commercial and service industry machinery manufacturing sector with NAICS code 333310 is around $5,000-$10,000. Premium pricing is usually determined based on annual revenue with higher revenue generally equating to higher premiums. Additional pricing considerations include number of employees, type of machinery/equipment manufactured and serviced, risk management practices, and prior claims experience.

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

Commercial Auto Insurance

Commercial auto insurance provides essential liability and physical damage coverage for machinery manufacturing businesses using vehicles for business purposes. It can help cover legal costs, medical expenses, vehicle repairs, and replacements in the event of accidents. Additional coverages like non-owned auto liability and rental reimbursement extend protection for incidents involving vehicles not owned by the business. Rates are typically estimated around $1,500 per insured vehicle on average based on industry factors.

Category List
Benefits
  • Liability protection in case of accidents or injuries involving company vehicles
  • Physical damage coverage to repair or replace vehicles involved in accidents
  • Medical payments coverage to pay for injuries sustained by third parties in an accident involving a company vehicle
  • Coverage for business assets or goods transported in vehicles
  • Protection for volunteer or non-owned vehicles used for business
  • Coverage for business assets or goods transported in vehicles
Use Cases
  • Cover liability from accidents caused while operating company vehicles
  • Cover medical expenses for employees injured in a work-related vehicle accident
  • Repair or replace company vehicles damaged in an accident
  • Provide non-owned/hired auto liability coverage for vehicles not owned by the business
  • Cover the costs of renting a replacement vehicle if a company vehicle becomes undriveable due to a covered accident

Based on industry data and risk factors, the estimated average annual pricing for commercial auto insurance for businesses in the commercial and service industry machinery manufacturing with NAICS code 333310 is around $1,500 per vehicle. This pricing was derived from national averages taking into account factors like type of business, number of vehicles, driver qualifications, safety records, and more.

Estimated Pricing: $1,500

Cyber Liability Insurance

Cyber liability insurance is an important risk management tool for machinery manufacturing businesses. It can help protect companies from both the direct costs of a cyber incident as well as resulting litigation expenses and regulatory fines. Given the sensitive customer and business partner data these companies often store and process, cyber liability coverage is especially valuable for defending against legal claims in the event of a breach or attack. It can also assist with costs related to responding to incidents, restoring systems, and managing brand and reputational impacts. Estimated annual premiums for a typical company in this industry are around $3,500.

Category List
Benefits
  • Covers costs of investigating cyber attacks, notifying customers of breaches and offering them credit monitoring
  • Pays for legal defense costs and settlements in the event of a lawsuit following a cyber incident or data breach
  • Reimburses costs of responding to a network security failure or breach, including forensic investigations, legal services, public relations consulting
  • Covers costs of restoring, recreating or recollecting lost or altered electronic data and computer programs
  • Pays for damages, fines and penalties imposed by regulation for failure to safeguard privacy (e.g. under HIPAA, Gramm-Leach-Bliley, FACTA or other laws)
  • Covers loss of income or extra expense from business interruption during a cyber event
  • Covers liability due to negligent transmission of computer viruses or malware
  • Provides access to risk management and loss control resources to help strengthen cybersecurity practices
  • Covers liability due to negligent transmission of computer viruses or malware
Use Cases
  • Data breach or cyber attack leading to loss or theft of customer private information like payment card data, social security numbers, health records, etc.
  • Costs related to legal claims from customers, clients, or partners impacted by a data breach or cyber attack.
  • Costs related to a network interruption or outage from a cyber attack that disrupts business operations.
  • Digital media liability for issues related to copyrighted content on company websites or social media accounts.

Based on research of average cyber liability insurance pricing for businesses in the commercial and service industry machinery manufacturing NAICS 333310, the estimated annual premium would be around $2,500 – $5,000. Pricing is derived based on factors such as annual revenue, number of employees, data security practices, loss history, and location. For a typical business in this industry with $5-10M annual revenue and 50-100 employees, the median pricing would be around $3,500 per year.

Estimated Pricing: $3,500

Directors And Officers Insurance

Directors and officers insurance, also known as D&O insurance, protects businesses and individuals from litigation risks. It provides coverage for the personal assets of directors and officers in the event that they are sued for wrongful acts or errors related to their roles in managing the company.

Category List
Benefits
  • Provides indemnification for “wrongful acts” by directors and officers, such as mismanagement, breach of duty, or negligence
  • Covers defense costs for regulatory investigations and inquiries
  • Reduces risk of personal bankruptcy for executives if faced with large legal costs
Use Cases
  • Protection against claims of errors, omissions or negligent acts
  • Defense costs if a claim or lawsuit is brought
  • Reimbursement of financial losses like settlements or legal fees
  • Coverage for both past and present directors and officers
  • Coverage for liability arising from regulatory actions and investigations
  • Protection against claims related to wrongful employment practices

Based on industry research and analysis of average pricing for similar sized businesses in this industry, the estimated average annual premium for Directors And Officers Insurance would be around $7,500 – $10,000. Factors that influence pricing include annual revenue, number of employees, any prior claims, and the limits and deductibles selected. Higher limits and lower deductibles would result in a higher price while lower limits and higher deductibles could provide a lower price. The broader the coverages selected, such as includingEntity Liability, the higher the overall price would be as well.

Estimated Pricing: $7,500 – $10,000

Conclusion

Overall, implementing a comprehensive business insurance plan tailored to a commercial machinery manufacturing business can help protect it both physically and financially. The key is understanding the main risks faced and choosing coverages that specifically address hazards involved with machinery operations, manufacturing facilities, vehicles used for business, employee safety, and legal liability from product defects or accidents. With the proper insurance in place, a company can focus on operations knowing its bases are covered if incidents do arise. It’s also important for businesses to regularly review their insurance needs and operations to ensure policies adequately cover any facility/equipment upgrades or operational changes over time.

Frequently Asked Questions

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