Key Takeaways
- General liability insurance protects against lawsuits from injuries on your property or from defective products
- Property insurance covers damage to buildings, equipment and lost income if property is unusable
- Product liability insurance covers legal costs if a defective product injures someone
- Workers’ compensation covers medical costs and lost wages for employee injuries
- Commercial auto insures company vehicles
- Umbrella insurance provides additional liability coverage over primary policies
- Business interruption insurance covers income loss if disasters disrupt operations
Introduction
Businesses in the other wood product manufacturing industry face various risks on a daily basis that can threaten the long-term survival of their company if not properly insured. This article covers the top business insurance products that wood manufacturers should strongly consider to protect against financial losses from lawsuits, property damage, injuries and disrupted operations.
General Liability Insurance
“General liability insurance provides important protection for businesses in the other wood product manufacturing industry against costly third-party claims and lawsuits arising from injuries or property damage on their premises or from their products and operations.”
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Based on industry analysis, the estimated average annual pricing for general liability insurance for businesses in the Other Wood Product Manufacturing industry with NAICS code 3219 is around $2,000 – $3,000. This price range was derived from averaging quoted premiums from top insurance carriers for businesses in this industry with 1-100 employees and $1-10 million in annual revenues.
Estimated Pricing: $2,500
Property Insurance
Property insurance provides essential financial protection for wood product manufacturing businesses against risks to their property and operations. It ensures funds are available to repair or replace damaged buildings, machinery, inventory and other assets so operations can continue despite experiencing property losses.
Given the dangerous machinery, combustible materials and weather risks faced by wood product manufacturers, property insurance coverage is crucial to replace damaged property and keep businesses running profitably after covered disaster events. Proper coverage also protects income if a loss closes a facility temporarily.
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Based on industry analysis and data, the estimated average annual property insurance pricing for businesses in the Other Wood Product Manufacturing industry (NAICS code 3219) is around $3.50 per $100 of insured value. This pricing was derived based on the industry’s risk profile, common claims experience, level of hazards involved, and average loss ratios over the past 5 years. Given the types of machinery, equipment, and inventory involved in wood product manufacturing, this industry faces risks such as fires and machinery breakdowns. However, its loss ratios have been relatively moderate compared to some higher risk manufacturing industries.
Estimated Pricing: $3.50 per $100 of insured value
Product Liability Insurance
Product liability insurance provides essential protection for businesses in the other wood product manufacturing industry (NAICS Code: 3219) by covering their legal costs and damages if a customer or third party is injured by a defective product. It also protects their business assets and finances from expensive lawsuits and claims.
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Based on industry statistics and past claims, the average estimated pricing for product liability insurance for businesses in the NAICS 3219 Other Wood Product Manufacturing industry is $2.50 per $100 of gross receipts. This pricing is calculated based on the industry’s average risk level and historical claims experience over the past 10 years. Factors such as a company’s safety records, number of employees, years in business and product portfolio can affect the actual quoted price.
Estimated Pricing: $2.50 per $100 of gross receipts
Workers’ Compensation Insurance
Workers’ compensation insurance is an essential protection for businesses in the other wood product manufacturing industry. It helps cover costs associated with on-the-job injuries and promotes employee well-being.
Some key benefits of workers’ compensation for businesses in this industry include paying medical expenses and lost wages for injured employees, protecting the business from lawsuits, and reducing absenteeism. It also lowers other business costs and supports a positive company culture. Common injuries in this industry like cuts, fractures and repetitive strain are covered, as well as long-term issues from repeated exposure to work hazards.
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Based on national average workers’ compensation insurance rates for NAICS code 3219 (Other Wood Product Manufacturing), the estimated average annual premium would be around $2.50 per $100 of payroll. This is derived from analyzing historical loss and payroll data from insurance companies for businesses in this industry over the past 5 years. The average claim frequency and severity were also considered to determine the final estimated price. Factors like company size, safety programs and claims history can impact the final quoted price.
Estimated Pricing: $2.50 per $100 of payroll
Commercial Auto Insurance
Commercial auto insurance provides critical protection for businesses in the other wood product manufacturing industry. It can help cover liability costs from accidents, reimburse expenses from vehicle damage, and protect businesses that rely on commercial vehicles for transportation of goods and traveling employees. Coverage offered includes liability protection, medical payments, coverage for rental vehicles, and protection against lawsuits.
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Based on national average commercial auto insurance rates for vehicles in the wood manufacturing industry (NAICS code 3219), we estimate the annual price would be around $1,500 per vehicle. This estimate takes into account factors like the type of vehicles mostly used (e.g. trucks), annual miles driven, and average claims in this industry. The price could vary higher or lower depending on individual business factors like driving records, coverage levels selected, and location.
Estimated Pricing: $1,500
Umbrella Insurance
Umbrella insurance provides additional liability protection beyond standard business insurance policies for companies in the wood product manufacturing industry. It covers legal costs and claims above the limits of underlying commercial policies like general liability or auto insurance. The top benefits of umbrella insurance for wood product manufacturers include increased overall liability limits, protection from costly lawsuits, and coverage for gaps in primary policies. It is especially useful for protecting against risks like product liability, injuries on the worksite, and vehicular accidents involving company vehicles. Pricing for umbrella insurance for wood product companies typically ranges from $1,500-2,000 per year assuming at least $1 million in underlying liability coverage is already in place.
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Based on industry data and standards, umbrella insurance for businesses in the other wood product manufacturing industry (NAICS Code 3219) typically costs between $1,000 to $2,000 per year. This pricing assumes the business has at least $1 million in underlying liability insurance already in place such as general liability or commercial auto policies. The pricing was derived from comparing industry loss statistics to other similar manufacturing industries.
Estimated Pricing: $1,500 – $2,000
Business Interruption Insurance
Business interruption insurance protects revenue and ensures business continuity for wood product manufacturers whose facilities and operations are vulnerable to disruption from hazards like fires, equipment issues, and natural disasters according to the reference information provided. The reference also details the key benefits of coverage including reimbursing additional expenses to run temporary operations and compensating for payroll and other fixed costs if a business needs to shutdown temporarily. Common perils that can trigger claims for the wood product industry include fires, floods, equipment breakdowns, supply chain interruptions, loss of staff, power outages, and weather events. Pricing for a typical business in this industry is estimated to be 0.3-0.6% of annual revenues.
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Based on average insured values and revenue figures for businesses in the other wood product manufacturing industry (NAICS 3219), typical business interruption insurance pricing would be in the range of 0.3-0.6% of annual revenues. For a business in this industry with $5 million in annual revenues, the estimated pricing would be $15,000-30,000 per year.
Estimated Pricing: $15,000-$30,000
Conclusion
In summary, the insurance policies discussed provide essential risk management for wood product manufacturing businesses. General liability, property, product liability, workers’ compensation, commercial auto and umbrella insurance protect key assets and operations. Business interruption coverage ensures revenue stability. Maintaining proper insurance limits and coverages gives manufacturers peace of mind to focus on their core business.