Key Takeaways
- General liability insurance protects against lawsuits and claims from injuries on premises or product defects.
- Property insurance covers repair/replacement costs if buildings, machinery or inventory are damaged.
- Commercial auto coverage provides liability protection for company vehicles and hired/non-owned vehicles.
- Workers’ compensation fulfills legal requirements to cover employee workplace injury medical costs and lost wages.
- Umbrella/excess liability policies increase coverage limits above primary policies in case of catastrophic lawsuits.
Introduction
As a machinery manufacturer, there are a number of business insurance policies that are critical to protect operations from unexpected financial losses. The top five insurances to consider are general liability, property, commercial auto, workers’ compensation and commercial umbrella/excess liability policies.
General Liability Insurance
General liability insurance provides essential protection for machinery manufacturing businesses. It covers costs of injuries, accidents, and lawsuits that could severely damage a company’s finances and reputation if left uninsured.
Liability insurance also safeguards a machinery manufacturer’s long-term viability by ensuring they can properly address any issues that may arise from their operations or products, even years later. This is important for the nature of machinery manufacturing which can sometimes see defects only emerge after extended use.
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Based on industry research and analysis of average claims data, the estimated average annual pricing for general liability insurance for businesses in the machinery manufacturing industry (NAICS 3333) is around $15,000 per year. Premiums are calculated based on factors such as number of employees, annual revenue, loss history, and type of machinery. Larger companies with over 100 employees and $10M+ in annual revenue can expect pricing closer to $20,000-$25,000 per year.
Estimated Pricing: $15,000 – $25,000 per year
Property Insurance
Property insurance provides crucial coverage for machinery manufacturing businesses by protecting their valuable physical assets and facilities from unpredictable losses. It also helps reimburse costs from business interruptions caused by covered property damage events. Damage to expensive equipment from accidents or natural disasters could severely impact a machinery manufacturing business’ operations and finances without this important insurance coverage. Property insurance guards against unexpected repair and replacement expenses and helps get businesses back up and running after covered losses.
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Based on average property values and risks for machinery manufacturing businesses, the estimated annual pricing for property insurance would be around $5,000 – $8,000. This price range was derived from considering typical factory/industrial building sizes, machinery/equipment values, past insurance claims data, and risks of fire or machinery breakdown for this industry.
Estimated Pricing: $5,000 – $8,000
Commercial Auto Insurance
Commercial auto insurance is essential for machinery manufacturing companies to protect themselves from financial risks associated with vehicle-related incidents. It provides important liability coverage and medical payments in case accidents occur while company vehicles are being used for business purposes like transporting equipment or employees. The estimated average annual price for a commercial auto insurance policy for a machinery manufacturing business is around $1,750 per vehicle according to industry data. Factors like vehicle type, miles driven, driving records and average claims impact the actual cost. Commercial auto insurance also covers hired and non-owned vehicles, which is important for machinery manufacturers that use rental vehicles or employees’ personal cars for business needs.
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Based on industry data and common risk factors, the estimated average annual price for commercial auto insurance for businesses in the machinery manufacturing industry (NAICS 3333) is around $1,750 per vehicle. This estimate is derived from considering factors like the types of vehicles used, average miles driven, liability limits, driving records, and average claim rates for this industry.
Estimated Pricing: $1,750
Workers’ Compensation Insurance
Workers’ compensation insurance is an important coverage for businesses in the machinery manufacturing industry to protect against expensive medical and lost wage claims from work-related injuries and illnesses.
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Based on industry analysis, the average workers’ compensation insurance pricing for businesses in the commercial and service industry machinery manufacturing with NAICS code 3333 is estimated to be around $2.50 per $100 of payroll. This pricing was derived from national workers’ comp insurance rate filings and loss data for similar manufacturing industries with medium risk levels.
Estimated Pricing: $2.50 per $100 of payroll
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, protects machinery manufacturing businesses from financial losses due to claims of negligence, mistakes, or oversight related to the design, manufacture, servicing, and technology/software used in machinery equipment. It covers legal fees and settlement costs if the business is sued by a customer or third party due to issues caused by defects or failures in the machinery products or from services provided. As a machinery manufacturer, professional liability insurance can help protect the business from costly lawsuits and claims resulting from defects, errors or failures in its manufactured products, especially for manufacturers of complex machinery that rely on software/technology. Coverage also extends to issues that may come up during product servicing.
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Based on typical pricing structures and factors considered for this industry, the estimated average annual price for professional liability insurance would be $5,000 – $10,000. Pricing is usually determined based on factors such as annual revenue, number of employees, claims history, types of machinery/equipment manufactured, and safety certifications/training.
Estimated Pricing: $7,500
Commercial Umbrella Insurance
Commercial umbrella insurance provides crucial extra liability protection for businesses in high-risk industries like machinery manufacturing. It protects finances and the future of a company from potentially ruinous lawsuits by offering additional liability coverage above primary policy limits. Given the dangers involved with operating heavy machinery and equipment, accidents that cause serious injury or significant property damage pose major liability risks for machinery manufacturers. Umbrella insurance is an important component of a risk management program to help ensure financial survival even after large lawsuits.
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Based on typical commercial umbrella insurance pricing averages, businesses in the machinery manufacturing industry (NAICS 3333) can expect to pay on average $2,500 – $5,000 annually for $1 million of commercial umbrella coverage. Pricing is determined based on factors like payroll, number of employees, types of machinery used, and loss history. For this industry, higher risks from machinery use often results in pricing near the top of the average range.
Estimated Pricing: $5,000
Conclusion
Machinery manufacturing involves risks from heavy equipment usage, defective product liability and workplace injuries. A comprehensive insurance portfolio mitigates financial risks to keep the business running smoothly. The right insurance coverage ensures machinery manufacturers can focus on production without worries of lawsuits or property damage wiping them out.