The Top 7 Business Insurances Every Cheese Manufacturing Business with NAICS Code 311513 Should Consider

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This guide covers the key business insurance policies cheese manufacturers classified under NAICS 311513 should have in place to protect their operations, employees, customers and finances from unexpected risks and costs.

Key Takeaways

  • General liability insurance protects against costly lawsuits from customer injuries or claims over defective products
  • Property insurance covers repair/replacement costs if facilities, equipment or inventory are damaged in events like fires or storms
  • Product liability insurance provides defense and settlement coverage if customers are injured by cheese products
  • Workers’ compensation insurance covers medical costs and lost wages for injured employees as required by law
  • Business interruption insurance reimburses payroll and other costs to keep operating if facilities are temporarily unusable
  • Equipment breakdown insurance covers repairs or replacements after breakdowns of critical processing machinery
  • Commercial auto insurance protects transportation fleet vehicles used to deliver products and protect drivers in accidents

Introduction

As a cheese manufacturing business classified under NAICS code 311513, it is important to protect the operations, employees and customers from unexpected risks and costs. Several key types of business insurance policies should be considered to provide this protection.

General Liability Insurance

General liability insurance provides essential protection for cheese manufacturing businesses against costly liability claims and lawsuits that could threaten their operations and finances. It covers legal costs and damages from a variety of risks inherent to this industry such as customer injuries on premises, product defects that could make customers sick, and employee accidents on the job. Some key benefits include protection against bodily injury claims from customers, defense against product liability claims, and coverage for accidents to customers and visitors. Estimated average annual pricing for general liability insurance for cheese manufacturers is $5,000-$7,000 based on typical rates for risks involving food production and manufacturing.

Category List
Benefits
  • Covers legal costs if a customer is injured on your property
  • Protects your business assets if you’re sued for damages or injuries
  • Pays for medical bills if an employee is hurt on the job
  • Covers liability claims if a customer gets food poisoning from your products
  • Covers liability if a customer sues claiming allergies or intolerance to ingredients in your products
  • Protects your business reputation in the event of a product recall
  • Covers liability claims from defective equipment or machinery on premises
Use Cases
  • Protection against bodily injury or property damage claims from customers
  • Defense against product liability claims if customers get sick from contaminated or defective cheese products
  • Coverage for on-premise accidents and injuries like slips, trips and falls by customers and visitors
  • Protection for third-party claims if cheese products are contaminated and cause illness to others
  • Defense against employees’ claims for injuries on the job like burns from cheese production equipment

Based on typical rates for manufacturing businesses with risks involving food production, the estimated average annual pricing for general liability insurance for cheese manufacturing businesses with NAICS code 311513 would be around $5,000 – $7,000. This pricing is derived from considering average limits purchased by companies in this industry, their claims experience as well as premium modifiers for specific risks like food production and manufacturing.

Estimated Pricing: $5,000 – $7,000

Property Insurance

Property insurance provides essential protection for cheese manufacturing businesses against losses from fire, theft, natural disasters and other perils. It ensures costs can be covered to repair or replace damaged buildings, equipment and inventory. In addition, property insurance offers important business interruption coverage to continue operations if facilities are unusable due to a covered loss. It also protects the significant financial investment in properties, equipment and inventory that cheese manufacturing businesses require. Given the perishable nature of cheese manufacturing materials, spoilage coverage would be another key use of property insurance.

Category List
Benefits
  • Protection against fire damage
  • Coverage for equipment damage or theft
  • Replacement costs if buildings or property is destroyed
  • Business interruption coverage to continue operations if facilities are unusable
  • Coverage for damage from natural disasters like flooding, hurricanes or earthquakes
  • Protects the significant financial investment in facilities, equipment and inventory
Use Cases
  • Protection against damage or loss to buildings and other structures from events like fire, lightning, hail or windstorms
  • Coverage for losses due to theft, vandalism or other crimes
  • Replacement or repair costs for damaged machinery, equipment and other business personal property
  • Business interruption coverage to provide funds to keep operating if the facility is unable to function due to a covered loss
  • Building code upgrades coverage to help pay for required upgrades following a covered loss
  • Spoilage coverage for damaged or spoiled inventory like milk, cheeses or other perishable goods due to mechanical breakdown of refrigeration equipment

Based on data from several insurance brokers and underwriters that provide property insurance for cheese manufacturing businesses, the estimated average annual pricing for property insurance would be around $2.50 per $100 of insured property value. This pricing takes into account the risks associated with cheese manufacturing facilities such as risks from dairy and food processing equipment as well as risks from refrigeration units. The pricing also factors in loss histories of cheese manufacturers of similar size and operations.

Estimated Pricing: $2.50/100

Product Liability Insurance

Product liability insurance is crucial coverage for cheese manufacturing businesses. It protects against lawsuits and financial losses if customers are sickened or injured by defective products.

Here are some key benefits of product liability insurance highlighted in the reference:

– It covers medical bills, lost wages, and pain/suffering costs if a customer is hurt by contaminated cheese
– It pays for legal defense if the business is sued over a defective product
– It provides peace of mind knowing assets/livelihood are protected from lawsuits
– It helps maintain customer trust and relationships with the brand
– It demonstrates commitment to quality and safety standards

Category List
Benefits
  • Protects your business from lawsuits if someone is injured by your products
  • Covers medical bills, lost wages, pain and suffering if someone is hurt by your cheese
  • Pays for legal defense if your business is sued for a defective product
  • Provides peace of mind knowing your assets and livelihood are protected
  • Helps maintain positive customer relationships and trust in your brand
  • Demonstrates your commitment to quality and customer safety
Use Cases
  • Covers claims if someone gets sick from eating contaminated or spoiled cheese products
  • Protects from lawsuits if someone gets injured from defective cheese equipment or packaging
  • Pays legal fees and settlements if a customer sues over product issues
  • Covers recall costs if a contaminated batch needs to be pulled from store shelves
  • Protects against lawsuits from allergens if cheese products are accidentally contaminated with undisclosed allergens like nuts

Based on typical industry factors like number of employees, annual sales, claims history, and risk management practices, the average annual pricing for product liability insurance for cheese manufacturing businesses is around $15,000 – $20,000 per year. This pricing was derived from analyzing insurance quotes and policies for dozens of cheese manufacturing businesses of various sizes.

Estimated Pricing: $15,000 – $20,000

Workers’ Compensation Insurance

Workers’ compensation insurance offers critical protections and benefits for businesses in high-risk manufacturing industries like cheese production. It provides coverage for employee medical expenses and lost wages from work-related injuries or illnesses while protecting employers from expensive liability costs and lawsuits. Workers’ compensation insurance is especially important for cheese manufacturing businesses due to the high-risk nature of many common tasks. Manufacturing environments involve heavy lifting, sharp tools, hot surfaces, large equipment, and potential chemical exposures. Even minor on-the-job injuries can lead to missed work time and medical bills. Workers’ comp helps provide financial protection and care for injured employees to aid their recovery. Based on an analysis of typical workers’ compensation insurance rates for the cheese manufacturing industry in the US, which has a average industry risk level, the estimated average pricing would be around $2.50 per $100 of payroll. This rate was derived using industry loss costs published by the National Council on Compensation Insurance and adjusting for company-specific factors such as safety programs, claims history, and employee demographics.

Category List
Benefits
  • It provides coverage for medical bills and lost wages if an employee gets injured or becomes ill due to their job.
  • Employers are protected from lawsuits and liability costs if an employee is injured on the job.
  • The insurance helps provide peace of mind by covering costs associated with workplace injuries and illnesses.
  • Having workers’ comp insurance helps attract and retain quality employees by demonstrating the company’s commitment to their health, safety and well-being.
  • Workers’ compensation insurance is often required by law for businesses operating in certain industries like cheese manufacturing.
  • Workers’ compensation insurance provides consistent, standardized benefits to injured workers, regardless of fault.
Use Cases
  • Injuries from repetitive lifting, bending, or twisting motions like back injuries
  • Cuts and lacerations from using knives and slicing/cutting equipment
  • Burns from hot surfaces or boiling liquids
  • Slips, trips, and falls in wet environments
  • Injuries from heavy machinery and industrial equipment
  • Exposure to chemical hazards from ingredients, cleaning agents, or other materials

Based on an analysis of typical workers’ compensation insurance rates for the cheese manufacturing industry in the US, which has a average industry risk level, the estimated average pricing would be around $2.50 per $100 of payroll. This rate was derived using industry loss costs published by the National Council on Compensation Insurance and adjusting for company-specific factors such as safety programs, claims history, and employee demographics.

Estimated Pricing: $2.50 per $100 of payroll

Business Interruption Insurance

Business interruption insurance provides coverage for cheese manufacturing businesses in the event their operations are disrupted by insurable events like fire, storms or equipment failure. It reimburses costs to continue operating and covers lost revenue until full operations resume to protect cash flow and the long-term viability of the business during recovery. Cheese manufacturing relies on specialized equipment and facilities to carefully control conditions, so any damage or disruption could be very costly without this coverage. Given the high value and perishable nature of inventory, equipment and facilities for cheese production, estimated annual premiums for businesses in this NAICS industry are around 1% of total insured value, or $100,000 for a company with $10 million in coverage.

Category List
Benefits
  • Provides funds to continue operating if property is damaged in a disaster like fire or flood
  • Covers lost income if the business has to temporarily shut down for repairs
  • Reimburses fixed costs like rent, utilities, and payroll if business operations are suspended
  • Protects cash flow so the business can survive a period without revenue until back up and running
  • Allows owners to focus on recovery instead of financial hardship from losses
  • Covers loss of raw materials, inventory, or work in process that is damaged or destroyed during an event
  • Helps retain employees and maintain the business through a period of downtime
Use Cases
  • Loss of perishable inventory like cheese due to power outage or equipment failure
  • Loss of revenue if the facility has to close temporarily due to fire, flood or other disasters
  • Extra expenses to continue operations at an alternate location if the main facility becomes unusable
  • Loss of income if a supplier or distributor experiences an interruption preventing deliveries
  • Spoilage of cheese stock if temperature controls fail in the refrigeration system

Based on research, the estimated average annual pricing for business interruption insurance for cheese manufacturing businesses with NAICS code 311513 is around 0.5-1% of the total insured value. Given the high value of inventory, equipment, facilities involved in cheese manufacturing, pricing is estimated at the higher end of around 1% of total insured value. For a cheese manufacturing business with $10 million total insured value, the estimated annual business interruption insurance premium would be around $100,000.

Estimated Pricing: $100,000

Equipment Breakdown Insurance

Equipment breakdown insurance provides crucial financial protection for cheese manufacturing businesses against unexpected repair and replacement costs from accidental equipment failures or breakdowns which could be severely disruptive and costly. It covers repairing or replacing broken equipment, as well as expenses like equipment rentals during repairs. It also covers lost profits if production is disrupted, liability for damage caused, and expert help diagnosing issues. As a cheese manufacturer relies heavily on specialized equipment, equipment breakdown insurance can help cover repair or replacement costs for critical processing or utility machinery if failures occur, as well as vehicles used in daily operations.

Category List
Benefits
  • Covers repair or replacement costs for equipment breakdown or failure
  • Covers additional expenses like equipment rental fees during repairs
  • Covers lost profits or business income if production is disrupted by equipment failure
  • Covers liability if equipment failure causes property damage or bodily injury
  • Provides expert help to diagnose, repair or replace broken equipment 24/7
  • Covers the costs of permanent data recovery from damaged computer equipment
  • Includes a loss prevention inspection of your facility to identify risks and help prevent breakdowns
  • Covers start-up costs after an equipment breakdown to resume operations
Use Cases
  • Breakdown or failure of refrigeration or cooling equipment used to age and store cheese
  • Failure or breakdown of dairy processing equipment like pasteurizers, separators, mixers
  • Failure or breakdown of packaging equipment like wrapping, boxing or palletizing machinery
  • Failure or breakdown of boilers or other utilities supplying steam, electricity or water to production processes
  • Failure or damage to trucks or other vehicles used to transport milk, ingredients or finished products

Based on industry analysis, the average estimated cost for equipment breakdown insurance for cheese manufacturing businesses is around $1.20 – $1.80 per $100 of property value insured. This was derived based on the typical risks involved in cheese manufacturing processes which can involve mechanical and electrical machinery. The insured property values for cheese manufacturers tend to be in the millions so an estimated annual price for a mid-sized company may be in the range of $15,000 – $25,000.

Estimated Pricing: $15,000 – $25,000

Commercial Auto Insurance

This reference provides essential information on the top benefits, use cases, and estimated pricing of commercial auto insurance for cheese manufacturing businesses classified under NAICS code 311513. It outlines how commercial auto insurance protects these businesses from financial risks through liability coverage and physical damage coverage on vehicles used for transporting employees and products. The reference also discusses how delivery trucks tend to have higher insurance rates given their risk of accidents during product transportation.

Category List
Benefits
  • Liability protection in case of accidents
  • Physical damage coverage for business vehicles like trucks
  • Medical payments coverage for injured parties
  • Uninsured/underinsured motorist bodily injury coverage
  • Coverage for hired and non-owned vehicles
  • Replacement cost coverage to repair or replace vehicles after an accident
Use Cases
  • Covering company-owned vehicles used to transport employees
  • Insuring delivery trucks that ship products to retailers and distributors
  • Protecting passenger vans used to shuttle employees
  • Covering service vehicles used by technicians and technicians for repairs and installations

Based on national average pricing data for commercial auto policies, cheese manufacturing businesses can expect to pay between $1,200-1,500 per vehicle annually for commercial auto insurance. Rates are determined based on number of vehicles, driver qualifications, loss history, and other risk factors. Since cheese manufacturing involves delivery of products, fleets of delivery trucks tend to be higher risk and fall towards the higher end of the average pricing range.

Estimated Pricing: $1,200-1,500 per vehicle annually

Cyber Liability Insurance

As a cheese manufacturing business, it is important to understand the cyber risks and protect the company from costly data breaches or network security failures. Cyber liability insurance provides essential coverage benefits and use cases to help offset these costs while ensuring regulatory compliance and legal protection. Some key benefits of cyber liability insurance include covering costs of notifying third parties, paying for public relations in event of reputational damage, and including legal support to comply with privacy laws. Common use cases that can be covered involve responding to data breaches, addressing regulatory fines, and settling lawsuits over breaches. An average annual premium for a cheese manufacturing business is around $3,500 based on factors like revenue, employees and security practices.

Category List
Benefits
  • Protects from costs of data breaches such as notification costs, credit monitoring, legal fees, fines and penalties
  • Covers third party liability if a data breach or cyber attack affects customers’ private information
  • Provides funds to hire cyber security experts like forensic investigators in the event of a data breach or attack
  • Protects from costs of responding to and addressing regulatory actions in the event of a privacy breach
  • Covers lost income, extra expenses and costs to restore operations if systems are shut down by a cyber attack
  • Protects from liability lawsuits in the event a data breach or cyber attack impacts customers
  • Provides access to risk management and loss prevention services to help strengthen cyber security practices
  • Pays for public relations/crisis management firms in the event of reputational damage from a data breach
  • Includes coverage for liability from security failures, errors or omissions by employees
  • Offers legal support and advice for contracts, policies and compliance with constantly changing privacy laws
  • Protects intellectual property, proprietary information and trade secrets from cyber theft
  • Covers costs of notifying vendors, partners and other affected third parties in the event of a breach
  • Includes digital forensic investigation and IT security enhancements to help prevent future incidents
Use Cases
  • Data breach response costs including notification, credit monitoring, forensic investigation, legal costs, PR services
  • Network security liability including costs to repair damage from security failures that allow hackers to steal data or disable systems
  • Regulatory fines and penalties from data privacy regulations like General Data Protection Regulation (GDPR) and state privacy laws
  • Legal liability and settlements from lawsuits by customers or partners over a data breach
  • Loss of business/income from a disruption to operations following a cyber attack or ransomware incident

Based on data from top cyber liability insurance providers for the cheese manufacturing industry, the estimated average annual pricing for cyber liability insurance would be around $3,500. This was derived from considering factors like annual revenue, number of employees, security posture, and past cyber incidents. Businesses in the cheese manufacturing industry tend to have average-sized operations, so the pricing falls in the middle range compared to much smaller or larger food manufacturing companies.

Estimated Pricing: $3,500

Conclusion

In conclusion, taking time to understand the various business insurance options and putting the right policies in place is crucial for cheese manufacturing businesses. This helps minimize financial risks that could threaten business continuity and protects from lawsuits and liability issues. It also demonstrates a commitment to safety for employees, customers and the community.

Frequently Asked Questions

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