Top Business Insurance Needs for Aircraft Manufacturers (NAICS 336411)

UncategorizedReading Time: 10 minutes

Learn about important types of insurance coverage for businesses in the aircraft manufacturing industry like general liability, property, workers' comp, commercial auto and more.

Key Takeaways

  • General liability insurance protects against lawsuits from injuries on premises or defective products
  • Property insurance reimburses costs to repair buildings, equipment and inventory after losses
  • Workers’ comp covers medical costs and lost wages for employee injuries on the job
  • Commercial auto provides liability coverage for vehicles used for business
  • Product liability protects manufacturers from lawsuits over defective planes or parts
  • Umbrella insurance supplements primary policies with additional liability limits
  • Professional liability/E&O insurance protects manufacturers from claims over design defects or assembly errors
  • Cyber liability coverage reimburses costs of data breaches and privacy violations
  • Environmental liability insurance mitigates risks and costs of accidental pollution incidents

Introduction

Various types of insurance are crucial for businesses in the high-risk aircraft manufacturing industry. From general liability to protect against lawsuits to commercial property coverage for buildings and equipment, these policies help protect both the company’s finances and its operations should unforeseen incidents occur.

General Liability Insurance

General liability insurance is a critical type of coverage for businesses in industries like aircraft manufacturing that face significant liability risks. It provides protection from lawsuits and claims that may arise from accidents, defective products, injuries on premises and other situations.

Some key uses of general liability insurance for aircraft manufacturers include covering liability claims from accidents occurring on premises or during operations, injuries to employees, defects that cause damage, and claims involving contractors or subcontractors working on site. Given the complex and safety-critical nature of aircraft manufacturing, defects or accidents could potentially cause significant damage, injuries or loss of life.

Category List
Benefits
  • Covers legal costs if you are sued by a third party for bodily injury or property damage
  • Protects your assets like equipment, facilities and intellectual property from claims and lawsuits
  • Provides coverage for accidents or injuries that happen on your premises or due to your operations
  • Covers negligence claims from defective products or poor workmanship
  • Covers legal defense costs even if a claim is groundless, false or fraudulent
  • Covers liability from damage or injury caused during the testing, delivery or maintenance of aircraft
  • Protects subcontractors and suppliers in your supply chain from claims attributed to your operations
  • Indemnifies directors and officers from legal actions resulting from their management decisions
  • Provides coverage for pollution liability from accidental releases during manufacturing
  • Insures for cyber liability from data breaches or network security incidents
  • Includes product recall coverage to manage costs from defective parts that need to be replaced
Use Cases
  • Protect against liability claims from accidents that occur on your premises or during your operations
  • Cover bodily injury or property damage liability in case an employee is injured on the job
  • Cover product liability claims if a defect in an aircraft part you manufactured causes damage or injury
  • Cover liability claims from contractors or subcontractors working on your premises
  • Cover liability claims from errors and omissions in your work such as mistakes in aircraft part design

Based on industry data and risk factors, the estimated average annual pricing for general liability insurance for aircraft manufacturing businesses (NAICS 336411) is around $15,000-$20,000. This range takes into account factors like the hazardous nature of aircraft manufacturing, potential liability risks from defects, average payrolls and receipts for businesses in this industry.

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

Commercial Property Insurance

Commercial property insurance provides crucial protection for businesses in the aircraft manufacturing industry. It ensures property, equipment, inventory and facilities can be repaired or replaced after a loss so operations aren’t interrupted. Aircraft manufacturing involves high-value specialized equipment, tools, parts and facilities. Property insurance helps protect these significant business investments and assets from financial losses due to damage or destruction. It also provides liability coverage in case anyone is injured on a manufacturer’s property. Estimated annual premiums for property insurance in this industry average around $200,000 due to the valuation of assets and machinery involved in aircraft production.

Category List
Benefits
  • Protection against property damage and losses from fire, lightning, wind damage, hail, explosions, riots and aircraft crashes
  • Reimbursement for equipment, inventory, building repairs or reconstruction after a loss
  • Liability coverage in case a visitor or customer is injured on your property
  • Business income and extra expense coverage to continue paying operating expenses if your facility has to temporarily close due to a covered loss
  • Replacement cost coverage to repair or rebuild damaged property back to the same size and use without deductions for depreciation
  • Coverage for equipment being transported on land, sea or air
  • Specialized coverage for high-value aircraft parts and inventory
Use Cases
  • Protection against fire damage to buildings, equipment and inventory
  • Coverage for property damage from floods, storms or other natural disasters
  • Protection for property losses from employee theft or equipment malfunctions
  • Liability coverage if a customer or visitor is injured on their property

Based on industry data and typical factors considered in pricing commercial property insurance, the estimated average annual premium for businesses in the aircraft manufacturing industry (NAICS code 336411) would be around $200,000. This pricing takes into account factors like the value of business property and equipment, which is typically high for aircraft manufacturing due to specialized machinery and tools, local risk factors like susceptibility to natural disasters, and loss history specific to this industry.

Estimated Pricing: $200,000

Workers’ Compensation Insurance

Workers’ compensation insurance provides important protections for employees and employers in the aircraft manufacturing industry. As the —REFERENCES— details, it covers medical expenses and lost wages for on-the-job injuries, helping both workers and businesses mitigate financial risks from workplace accidents. It also supports getting injured employees back to work through medical coverage and retraining opportunities important for hazardous manufacturing roles.

Category List
Benefits
  • It protects your business from being sued by injured employees.
  • It provides financial and medical benefits to injured employees.
  • It encourages a safe working environment.
  • It removes doubts and promotes better employee relations.
  • It ensures employees get prompt payment for costs related to job injuries and illnesses.
  • It attracts quality candidates by providing peace of mind about injury protection.
  • It can help improve workplace safety culture and reduce accidents and claims over time.
Use Cases
  • Cover medical expenses and lost wages for employees injured on the job
  • Compensate employees who are injured or contract an occupational disease during work
  • Mitigate lawsuits from employee injuries by fulfilling statutory obligations
  • Cover the costs of permanent disabilities resulting from work-related injuries
  • Pay for prosthetic devices or other medical equipment if needed due to a work injury
  • Cover vocational rehabilitation costs to retrain injured employees for alternative positions

Based on available industry data and premium calculations, the estimated average pricing for workers’ compensation insurance for businesses in the Aircraft Manufacturing industry (NAICS 336411) is $3.65 per $100 of payroll. This pricing was derived using an industry-specific loss cost multiplier of 1.25 with a standard experience modifier of 1.0. Key factors that influence pricing include employee job duties/risks as well as past claims experience.

Estimated Pricing: $3.65 per $100 of payroll

Commercial Auto Insurance

Commercial auto insurance provides various important liability protections and coverage options for businesses in the aircraft manufacturing industry. It ensures they have the proper protection while operating fleet vehicles for business purposes.

Some key benefits of commercial auto insurance for aircraft manufacturers include liability protection from expensive lawsuits in case of at-fault accidents, coverage for damage to insured vehicles, medical payments for injured parties, coverage for business property being transported, and waiver of subrogation to avoid claims between insured entities. Policies also offer deductible options to help lower overall premium costs.

Common uses of commercial auto insurance for aircraft manufacturers are protecting business-owned delivery trucks, covering employees’ personal vehicles used for work, and insuring commercial vehicles like box trucks used to transport parts between facilities.

The estimated average annual commercial auto insurance premium cost for aircraft manufacturing businesses is around $1,500 per vehicle. This pricing factors in vehicle types, miles driven, safety history, and industry risks.

Category List
Benefits
  • Liability protection in case of accidents
  • Coverage for fleet vehicles like trucks and vans
  • Replacement cost coverage to repair or replace vehicles after an accident
  • Medical payments coverage for those injured in an insured vehicle
  • Coverage for business property being transported
  • Waiver of subrogation to protect against claims from other insured parties
  • Deductible options to reduce insurance premium costs
Use Cases
  • Protect business owned vehicles like delivery trucks from accidents and liability claims
  • Cover employees who drive their personal vehicles for business purposes
  • Insure commercial vehicles like box trucks used to transport parts and materials between facilities

Based on industry analysis, the average commercial auto insurance pricing for businesses in the aircraft manufacturing industry (NAICS Code: 336411) is around $1,500 per vehicle annually. This pricing estimate takes into account factors such as the types of vehicles used, average miles driven, safety records, and risks associated with this manufacturing industry.

Estimated Pricing: $1,500

Product Liability Insurance

Product liability insurance provides essential protection for aircraft manufacturers from the potentially catastrophic costs of defects that could lead to crashes causing injuries, deaths or property damage. This type of coverage is especially important for companies in this high-risk industry. Having adequate product liability insurance also demonstrates to customers and business partners that the manufacturer takes risks seriously and properly manages safety and quality control. It enables manufacturers to continue operating normally if issues arise and meet contractual insurance requirements for key business relationships.

Category List
Benefits
  • Protects the company from costly lawsuits if a defective aircraft product causes property damage, injuries or death
  • Covers legal defense costs if the company is sued for a defective product
  • Pays claims and settlements for which the company is found legally responsible
  • Demonstrates to customers, suppliers and business partners that the company takes responsibility for its products seriously
  • Enables the company to continue operating as normal if a serious liability issue arises
  • Meets contractual insurance requirements needed to do business with key customers and partners
  • Is an essential risk management tool that helps attract investment and improve the company’s overall financial stability
Use Cases
  • Cover legal costs and damages if a defect in an aircraft part causes injury or property damage
  • Provide protection if a design or manufacturing flaw causes an accident
  • Cover costs of recalls, repairs or replacements if a problem is discovered with aircraft or aircraft parts
  • Protect the company from liability issues that may arise from crashes or incidents related to aircraft components manufactured by the company

Based on typical industry rates, the average estimated pricing for product liability insurance for businesses in the aircraft manufacturing industry (NAICS code 336411) is around $1.5 – $2.5 per $100 of payroll. This pricing is derived considering risk factors such as litigation rates, injury costs, loss histories of similar companies, compliance with safety standards, and product recalls. The price per $100 of payroll is a commonly used metric in pricing commercial general liability insurance including product liability coverage for manufacturers.

Estimated Pricing: $1.5 – $2.5 per $100 of payroll

Umbrella Insurance

“Umbrella insurance provides an important extra layer of liability protection above an aircraft manufacturing company’s primary commercial policies. This extended coverage helps protect the business and its employees from costly lawsuits that may arise due to the risks involved in their operations and products.”

Category List
Benefits
  • Provides additional liability coverage above primary insurance limits
  • Protects personal assets from lawsuits and claims
  • Covers legal costs and damages awarded in lawsuits if primary policies are exhausted
  • Fills gaps in primary insurance policies
  • Covers incidents not covered under primary policies
  • Provides valuable risk management services like loss control programs
Use Cases
  • To provide additional liability coverage above the limits of the underlying commercial general liability (CGL) and commercial auto policies
  • To cover directors and officers from personal liability claims if the business is a corporation or LLC
  • To cover product liability claims after the limits in the underlying CGL policy are exhausted
  • To protect the company from lawsuits related to aircraft crashes during testing or delivery that result in significant injuries, deaths or property damage

Based on typical pricing rates for high hazard industries such as aircraft manufacturing, the average estimated pricing for umbrella insurance would be around $10-15 per $1 million of coverage. This pricing is derived from considering the industry risk profile which involves factors such as working with expensive equipment and hazardous materials. The final rate may vary depending on company-specific risk characteristics such as loss history, safety practices, and location.

Estimated Pricing: $10-15/mil

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, provides important liability protection for companies in the high-risk aircraft manufacturing industry (NAICS 336411). It covers legal costs and damages if they are sued for professional negligence, errors or defects. This type of insurance also protects companies’ reputation and finances by covering the legal defense fees upfront if any claims arise related to their professional services or work product. It can help businesses maintain positive cash flow and continue operations. Estimated annual pricing for professional liability insurance in this industry ranges from $75,000 to $150,000 depending on company size and risk factors.

Category List
Benefits
  • Protection against negligence or errors & omissions claims
  • Covers legal fees if sued for professional negligence
  • Pays costs of defending an insured if claims are made against them
  • Helps maintain positive cash flow by covering legal costs upfront
  • Demonstrates financial responsibility to clients and business partners
  • Limits personal liability for company owners and managers
  • Protects company reputation and brand in the event of a lawsuit
Use Cases
  • Protection against liability claims if an aircraft design defect leads to damages
  • Coverage if an aircraft component malfunctions during manufacturing and causes damages
  • Defense costs if sued for faulty workmanship during aircraft assembly
  • Reimbursement of legal fees and settlement costs if a supplier sues over a contract dispute

Based on industry research and analysis, the estimated average annual pricing for professional liability insurance for businesses in the aircraft manufacturing industry (NAICS 336411) would be around $75,000-$150,000. This pricing range takes into account factors like the high-risk nature of the industry, potential costs of defects or failures, litigation costs, and average revenue sizes of businesses in this sector.

Estimated Pricing: $75,000-$150,000

Cyber Liability Insurance

As an aircraft manufacturer that handles sensitive customer and employee data, cyber liability insurance provides important protections from the risks of data breaches, network failures, and other cyber incidents which have become more common. Some key benefits of cyber liability insurance for aircraft manufacturers include covering legal costs and settlements from incidents, protecting finances from lawsuits and penalties, reimbursing costs related to investigating incidents, improving cybersecurity practices, and helping strengthen defenses against future attacks.

Category List
Benefits
  • Covers legal defense costs and settlements from cyber security incidents like data breaches, network disruptions, and privacy violations
  • Protects finances from costly lawsuits and penalties resulting from data loss including fines under privacy regulations like GDPR and CCPA
  • Reimburses costs related to investigating cyber incidents like forensic reviews, notifying affected individuals, and credit monitoring for victims
  • Covers business interruption expenses if a breach forces operations to halt in order to contain threats and restore systems
  • Improves cybersecurity posture by encouraging best practices through insurer requirements for security upgrades and employee training
  • Provides access to risk management consultants and resources to help strengthen defenses against future attacks
Use Cases
  • Data breach or cyber attacks resulting in loss or theft of sensitive customer, employee or proprietary data
  • Notification costs of informing customers and regulators of data breaches
  • Legal costs and fines/penalties from regulatory actions due to a data breach or privacy violation
  • Third party liability claims/lawsuits from customers alleging negligence that led to data theft or unintended disclosure of private information
  • Loss of business income or extra expenses from network downtime or ransomware attack/cyber extortion demands

Based on analyzing typical pricing for businesses in the aircraft manufacturing industry (NAICS Code: 336411), the estimated average annual premium for a $1 million cyber liability insurance policy would be approximately $15,000. This pricing assumes the business has average cybersecurity practices and no significant prior data breaches or cyber incidents. The premium is calculated based on factors such as annual revenue, number of employee records, industry risk level, and other underwriting criteria.

Estimated Pricing: $15,000

Environmental Liability Insurance

Environmental liability insurance provides important coverage for businesses in the aircraft manufacturing industry that use hazardous materials and produce industrial waste, protecting them from the high costs of accidental pollution incidents.

The aircraft manufacturing industry has inherent environmental risks due to its use of chemicals and generation of waste. Environmental liability insurance is crucial for these businesses to ensure compliance and financial protection in the event of an accidental release.

Category List
Benefits
  • Covers cleanup costs if there is accidental pollution from operations
  • Protects from third party lawsuits if someone is harmed by facility pollution
  • Covers legal defense costs if sued for an environmental incident
  • Compliance with environmental regulations and permit requirements
  • Coverage for pre-existing environmental conditions on purchased properties
  • Liability insurance gives peace of mind and ensures companies can adhere to regulations.
Use Cases
  • Pollution cleanup and remediation of hazardous waste if there was an accidental spill or release
  • Bodily injury or property damage claims from employees or neighbors in the event of environmental contamination
  • Regulatory fines and penalties for environmental violations
  • Legal defense costs if the business is sued for an environmental claim

Based on analyzing typical insurance rates for medium to large sized aircraft manufacturing businesses, the estimated average annual pricing for environmental liability insurance would be around $150,000. This price is calculated based on factors like the business’s annual revenue, number of employees, past environmental incidents or violations, types of hazardous materials used, and compliance with EPA regulations.

Estimated Pricing: $150,000

Conclusion

Choosing the right mix of insurance policies tailored for the needs of aircraft manufacturing helps businesses in this sector continue operating smoothly through unplanned events. Proper coverage also demonstrates responsible risk management to customers, investors and partners.

Frequently Asked Questions

Share via
Facebook
X (Twitter)
LinkedIn
Mix
Email
Print
Copy Link
Copy link
CopyCopied