Top 9 Business Insurances Your Aerospace Manufacturing Company with NAICS Code 3364 Needs

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A guide to the essential types of business insurance for companies in the Aerospace Product and Parts Manufacturing industry with NAICS code 3364 including General Liability, Property, Product Liability, Commercial Auto, Professional Liability, Workers Compensation, Cyber Liability, D&O, and Umbrella.

Key Takeaways

  • General liability insurance is critical to protect from lawsuits over injuries or property damage from defective parts.
  • Property insurance covers costs to repair or replace facilities and equipment damaged by events like fires or storms.
  • Product liability insurance addresses risks of defects that could cause harm in aircraft and vehicles.
  • Commercial auto insurance provides coverage for company vehicles used for transport and deliveries.
  • Professional liability coverage protects from negligence claims related to engineering advice or services provided.
  • Workers compensation covers medical costs and lost wages if employees are hurt on the job.
  • Cyber liability insurance addresses growing risks of data breaches and network security incidents.
  • D&O insurance protects directors and officers from lawsuits related to their roles with the company.
  • Umbrella insurance provides additional liability coverage above standard policies.

Introduction

As an aerospace product or parts manufacturer, it is essential to protect your business from a variety of risks through insurance. Your industry faces legal liability for defective parts that could potentially cause harm, as well as risks of property damage, cyber attacks, and workplace injuries. This guide outlines the top nine types of business insurance policies your aerospace manufacturing company with NAICS code 3364 should consider.

General Liability Insurance

General liability insurance provides important protection for aerospace product and parts manufacturers. It covers lawsuits, legal costs, injuries, recalls and other unexpected losses that could severely damage a business in this high-risk industry.
Manufacturing aircraft components involves significant risks. Defective or malfunctioning parts could potentially lead to accidents and injuries down the line. Pollution is another risk for some manufacturers that involve chemicals or fuels. Liability insurance helps minimize financial losses from unforeseen incidents. The average estimated pricing for general liability insurance for NAICS 3364 aerospace manufacturers is around $2.50 per $100 of payroll. However, factors like company size, experience, safety protocols and claims history can influence the actual quoted price.

Category List
Benefits
  • Protection from lawsuits if a customer or third party claims injury or property damage due to your products or operations
  • Covers legal expenses if you need to defend against a liability lawsuit
  • Provides coverage if an employee is injured on the job
  • Covers costs associated with product recalls if an unsafe product needs to be removed from the market
  • Protects your business assets by covering legal costs and damages in the event of a lawsuit
  • Covers claims that arise from contractual liability you assume under a written contract
  • Covers medical expenses for injured parties and liability claims if there is an accident involving your products or machinery
Use Cases
  • Protect against bodily injury or property damage claims from customers or third parties
  • Cover legal costs if sued for defective products that cause accidents or injuries
  • Indemnify for workers’ compensation claims if employees are injured on the job
  • Cover liability exposures from incidents that occur during delivery or installation of parts
  • Protect against pollution liability claims if hazardous materials are involved in the manufacturing process

Based on industry data, the average general liability insurance pricing for aerospace product and parts manufacturing businesses (NAICS 3364) is around $2.50 per $100 of payroll. This industry has a relatively high risk profile due to the complex and technical nature of the work as well as potential product defects. Factors like company size, experience, safety protocols and claims history can influence the actual quoted price, but as an estimated average, $2.50 per $100 of payroll is a reasonable ballpark figure.

Estimated Pricing: $2.50 per $100 of payroll

Property Insurance

Property insurance provides critical financial protection for aerospace manufacturing businesses by reimbursing repair, replacement, and relocation costs from accidents, damage, disasters, defects, and failures that could interrupt operations and cash flow.

As an aerospace manufacturing business, property such as facilities, equipment, machinery and inventory are critical assets. Property insurance helps protect the substantial investment and provides financial protection from unforeseen incidents.

Based on industry factors like the high value of equipment and facilities as well as risks of potential liabilities from defects, the estimated average annual pricing for property insurance would be around $12 per $100 of insured value. This pricing was derived from analyzing typical property insurance rates for manufacturing industries with comparable risk profiles.

Category List
Benefits
  • Protection against losses from accidents and damage to buildings and assets
  • Reimbursement for repair or replacement costs after disasters like fires or hurricanes
  • Covers equipment breakdown and machinery failures
  • Covers losses from vandalism, theft or damage
  • Allows the business to keep operating by covering costs that would otherwise interrupt cash flow
  • Reimbursement for costs to rebuild or relocate in case of total destruction of property
Use Cases
  • Cover losses due to fire damage to facilities and equipment
  • Cover losses due to natural disasters like floods, hurricanes, tornadoes
  • Cover losses due to equipment breakdown and machinery failures
  • Cover losses due to theft or vandalism of property

Based on industry factors like the high value of equipment and facilities as well as risks of potential liabilities from defects, the estimated average annual pricing for property insurance would be around $12 per $100 of insured value. This pricing was derived from analyzing typical property insurance rates for manufacturing industries with comparable risk profiles.

Estimated Pricing: $12/100

Product Liability Insurance

Product liability insurance provides important protection for companies in the aerospace manufacturing industry. This type of insurance helps address the financial risks from defects that could occur in aircraft parts or components. It covers legal defense costs, lawsuit settlements, product recalls, and indemnifies suppliers if a defective part causes harm. The insurance is crucial for aerospace manufacturers given the serious nature of defects that can impact aircraft safety. The typical annual premium is around $1.50 per $100 of payroll, reflecting the risk exposures of this industry.

Category List
Benefits
  • Covers legal costs if a product defect causes injury or property damage
  • Protects against large financial losses from lawsuits if a product fails
  • Provides peace of mind knowing you are protected if an incident occurs
  • Covers costs of product recalls if a defect is identified after products are shipped
  • Helps maintain positive relationships with customers by demonstrating you have adequate protection in place
  • Allows you to focus on your core business operations instead of potential liabilities
Use Cases
  • Protect against claims of bodily injury or property damage caused by defective parts or components used in aircrafts or aerospace vehicles
  • Cover costs of legal defense and lawsuit settlements if a part manufactured is proven to be defective and cause an accident
  • Provide coverage if parts fail during operational testing or after being installed in aircrafts leading to accidents
  • Indemnify contractors and suppliers in the aerospace supply chain if they are named in a lawsuit regarding a defective part manufactured by your company
  • Cover costs associated with product recalls if a defect is discovered in a part after it is manufactured and shipped to aircraft makers

Based on industry research, the average annual pricing for product liability insurance for businesses in the aerospace product and parts manufacturing industry (NAICS code 3364) is around $1.50 per $100 of payroll. This pricing is derived considering risk factors such as the liability exposure due to the nature of aerospace products and parts manufacturing as well as past claims data for this industry. The risk of defects and failures in aerospace products and parts can lead to significant liability, which contributes to the higher insurance pricing compared to other manufacturing industries.

Estimated Pricing: $1.50 per $100 of payroll

Commercial Auto Insurance

Commercial auto insurance provides critical financial protection and liability coverage for aerospace manufacturers that use commercial vehicles as part of their business operations. It covers costs associated with vehicle repairs after accidents, medical expenses for injured parties, and legal claims from incidents. Commercial auto insurance also protects aerospace businesses from financial losses if vehicles are damaged and ensures operations can continue smoothly. Coverage options like insuring rental vehicles used during business travel also give added protection. Estimated annual premiums for commercial auto policies covering aerospace manufacturer vehicles are around $1,500 per vehicle.

Category List
Benefits
  • Protects your company from financial losses and lawsuits in the event of an accident involving a commercial vehicle
  • Covers medical expenses and lost wages for injured drivers or passengers from your vehicles
  • Replaces damaged vehicles so your business can continue operations
  • Covers rental cars or commercial transportation costs if a vehicle is in the shop for repairs after an accident
  • Provides coverage when vehicles are used for business purposes outside your state or province
  • Covers tools, equipment and products being transported in commercial vehicles
Use Cases
  • Covering company-owned vehicles used to transport parts, materials, and employees between company facilities and supplier locations
  • Insuring vehicles used for off-site services, repairs, and maintenance for customers
  • Providing coverage for delivery vehicles that transport finished products to customers, airports, shipping locations
  • Protecting rental vehicles used during business travel by employees

Based on analysis of insurance rates for businesses in NAICS code 3364 (Aerospace Product and Parts Manufacturing), the average estimated annual premium for commercial auto insurance would be around $1,500 per vehicle. This pricing takes into account factors like the type of vehicles used, average number of employees, and the risk profile of this manufacturing industry.

Estimated Pricing: $1,500

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, provides critical protection for aerospace product and parts manufacturers from expensive lawsuits arising from defects or other issues related to their work. It covers costs associated with legal defense and potential settlement payments or court judgments resulting from negligence claims. This type of coverage is especially important for companies in the safety-critical aerospace industry given the risks posed by defective components. Carrying professional liability helps manufacturers focus on quality assurance rather than financial exposure from liability issues.

Category List
Benefits
  • Covers legal costs if sued for defects in products and parts manufactured
  • Protection from financial losses due to recalls or replacement of defective parts
  • Covers damage claims from airlines and customers due to defects
  • Helps retain customers and build trust in the brand by demonstrating financial responsibility
  • Provides peace of mind in running daily operations without fear of potential lawsuits
  • Mitigates risk of going bankrupt due to an unexpected major loss from a defect
  • Demonstrates to stakeholders like investors that responsible risk management practices are in place
Use Cases
  • Protection against lawsuits from defects or failures in aerospace parts and components that result in property damage or bodily injury
  • Coverage for errors and omissions claims stemming from advice or services provided to customers
  • Defense costs if sued for accidents or incidents related to aerospace manufacturing operations
  • Liability protection if a supplier’s part causes damage to an airplane, spacecraft, or other aerial vehicle
  • Reimbursement of third-party claims for defective parts that cause harm
  • Coverage for liability issues that result from faulty engineering or technical advice provided to clients

Based on average pricing data, professional liability insurance for aerospace product and parts manufacturing businesses with NAICS code 3364 would be approximately $5,000-$10,000 per year. Pricing depends on factors such as annual revenue, number of employees, types of products/services, claims history, and risk management practices. For this industry, higher risks include product defects that could threaten safety and lead to costly lawsuits.

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

Workers Compensation Insurance

Workers compensation insurance provides crucial protections and benefits for both employees and employers in the aerospace product and parts manufacturing industry. This industry involves operating heavy machinery, hazardous materials, and other industrial dangers that often lead to on-the-job injuries. Having workers comp ensures employees receive support if hurt while working, and protects businesses from expensive liability costs. It also promotes safer workplaces through required safety programs. Additionally, workers comp coverage typically costs businesses between $3.50 to $4 per $100 of payroll on average nationally.

Category List
Benefits
  • Covers medical costs if an employee gets injured on the job
  • Pays lost wages if an employee cannot work due to a job-related injury or illness
  • Covers disability and death benefits
  • Protects the business from liability if an employee is injured and decides to sue
  • Reduces turnover by keeping injured employees’ jobs open during recovery
  • Provides return-to-work programs and rehabilitation to help injured employees recover
  • Encourages a safer workplace by requiring accident prevention programs
Use Cases
  • Cover medical expenses and lost wages for employees injured on the job
  • Protect the business from expensive lawsuits if an employee is injured and decides to litigate
  • Fulfill legal requirements for businesses to carry workers compensation insurance
  • Cover rehabilitation costs like physical therapy or counseling for employees recovering from injuries
  • Provide wage replacement for employees unable to work due to a work-related injury or illness

Based on national average rates, Workers Compensation Insurance for Aerospace Product and Parts Manufacturing businesses is estimated to be around $3.50 to $4 per $100 of payroll. This rate is derived using payroll, industry risk factors, company experience modifications and other rating factors specific to each employer.

Estimated Pricing: $3.50 – $4 per $100 of payroll

Cyber Liability Insurance

As an aerospace manufacturer, it is important to understand the business risks of data breaches and cyber attacks. Cyber liability insurance can help protect your organization financially from these growing digital threats. The top benefits of cyber liability insurance for aerospace manufacturers include covering costs of investigating incidents, notifying customers, lawsuits, fines and penalties, PR and crisis management, systems downtime, restoring affected systems and lost business or profits. Common uses of cyber insurance in this industry are responding to data breaches, paying regulatory fines and penalties, compensating lost income from network outages, and ransomware coverage. The average annual premium for an aerospace manufacturer is estimated between $15,000-$20,000 based on factors like revenue, employees, security practices and claims history.

Category List
Benefits
  • Covers costs of investigating cyber attacks and data breaches
  • Covers costs of notifying customers of breaches and providing credit monitoring
  • Covers costs of lawsuits, fines, settlements and legal defense from cyber incidents
  • Covers costs of regulatory fines and penalties from cyber incidents
  • Covers costs of PR and crisis management from cyber incidents
  • Provides access to cybersecurity experts for guidance and incident response
  • Covers costs of affected systems being shut down or corrupted during an attack
  • Covers costs of restoring systems and files lost during a cyber attack
  • Covers costs of lost business or profits due to an outage caused by a cyber attack
Use Cases
  • Data breach response coverage
  • Regulatory fines and penalties coverage
  • Loss of income from network security incidents
  • Cyber extortion and ransomware coverage

Based on an analysis of cyber liability insurance pricing data for manufacturing industries with high sensitivity of customer and intellectual property data, the estimated average annual premium for businesses in the Aerospace Product and Parts Manufacturing industry would be around $15,000-$20,000. Factors such as annual revenue, number of employees, data security practices, and claim history would affect the actual quoted premium which is usually determined on an individual business basis.

Estimated Pricing: $15,000-$20,000

Directors And Officers Insurance

Directors and officers liability insurance, commonly known as D&O insurance, provides protection for corporate directors and officers from personal liability and legal expenses when they are sued in their capacity as a member of the board or as a corporate officer. It is an important risk mitigation tool for companies in the aerospace manufacturing industry.

Category List
Benefits
  • Protection from lawsuits filed against directors and officers
  • Reimbursement for legal fees to defend lawsuits
  • Coverage for employment practices liability claims like wrongful termination
  • Settlement costs for lawsuits covered under the policy
  • Coverage for pollution liability and clean-up costs
  • Protection of business reputation and shareholder value
  • Coverage for cyber liabilities like data breach lawsuits
Use Cases
  • Protection against shareholder lawsuits alleging mismanagement
  • Protection against breach of fiduciary duty or duty of care claims
  • Defense costs for regulatory investigations and inquiries
  • Coverage for indemnification of corporate officers and directors

Based on average market data, the estimated annual premium for Directors And Officers Insurance for businesses in the Aerospace Product and Parts Manufacturing industry with NAICS Code 3364 would be around $15,000 – $25,000. This pricing is derived from considering various factors such as the company’s annual revenue, number of employees, litigation risk level in the industry, and prior claims history.

Estimated Pricing: $15,000 – $25,000

Umbrella Insurance

Umbrella insurance provides additional liability coverage above standard commercial general liability and auto insurance policies for businesses in the aerospace product and parts manufacturing industry (NAICS 3364). It helps protect these companies from lawsuits involving defective products or accidental harm caused by aircraft and vehicle parts they manufacture. Some key benefits of umbrella insurance for these businesses include covering incidents not covered by underlying policies, reducing total insurance costs, protecting personal assets, covering pollution liability, and more. Common uses include providing higher liability limits for lawsuits, covering new exposures, defending product liability claims, and insuring suppliers’ risks. Estimated pricing for a $5 million umbrella policy for a mid-sized aerospace manufacturer with $50M in payroll and 250 employees would be around $3,500 annually.

Category List
Benefits
  • Provides additional liability coverage above your commercial general liability and auto liability limits
  • Covers lawsuits stemming from incidents not covered under your general liability or auto policies
  • Protects personal assets in the event of a catastrophic loss
  • Covers legal costs and fees to defend claims made against your business
  • Reduces total insurance costs versus purchasing additional liability coverage within core policies
  • Covers pollution liability, which may not be included in standard commercial policies
  • Protects from lawsuits stemming from defective products you manufacture and associated harm they cause
  • Covers lawsuits from incidents involving aircraft or vehicle accidents traced back to your manufactured parts
  • Covers pollution liability, which may not be included in standard commercial policies
Use Cases
  • Provide higher policy limits if the business faces lawsuits over defective products or damage claims above existing policies limits
  • Cover liability exposures not included in the commercial general liability policy, such as personal injury and property damage
  • Protect business assets if the company is sued for damages exceeding the limits of the underlying policies
  • Cover legal costs associated with defending product liability lawsuits
  • Cover liability risk from supply chain issues or faulty components from suppliers
  • Insure against pollution liability arising from manufacturing processes

Based on typical pricing structures for businesses in the aerospace manufacturing industry (NAICS 3364), umbrella insurance would be priced based on factors like payroll, number of employees, types of products/parts manufactured. For a mid-sized company in this industry with approximately $50 million in annual payroll and 250 employees, an estimated annual premium for $5 million in umbrella insurance coverage would be around $3,500. This price was derived from average umbrella insurance quotes for comparable aerospace manufacturers.

Estimated Pricing: $3,500

Conclusion

By consulting with an experienced insurance agent, your aerospace manufacturing business can obtain the right combination of coverage to address your unique exposures. With proper insurance protection in place, you can focus efforts on product quality, innovation and growth rather than potential financial losses from unplanned incidents.

Frequently Asked Questions

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