Key Takeaways
- General liability insurance covers third-party injuries and property damage from your operations.
- Workers’ compensation covers medical expenses and lost wages if employees get hurt on the job.
- Property and equipment insurance replaces valuable machinery and tools if damaged.
- Business interruption insurance covers lost income if repairs disrupt operations.
- Commercial auto covers fleet vehicles used for customer transportation.
- Professional liability protects against lawsuits over faulty repairs.
Introduction
As a commercial industrial machinery repair business, there are several key types of insurance needed to protect the business operations, employees, customers, and financial assets. Having the right insurance coverage in place is essential to mitigate risks and ensure the business can continue serving customers uninterrupted in the event of covered claims.
General Liability Insurance
General liability insurance is an important coverage for businesses involved in commercial and industrial machinery repair and maintenance to protect against liability claims from accidental injuries, property damage, or faulty repairs. The estimated annual cost for general liability insurance for businesses in this industry is $4,000. The top benefits include protecting assets from lawsuits, providing liability coverage on customer sites and for transportation of equipment, and encouraging customer confidence knowing risks are covered. Common risks faced include injuries to staff or customers on premises, damage to customer machinery during repairs, and liability if repaired equipment fails. General liability insurance provides protection for these types of claims that could arise from repair operations.
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Based on average costs for general liability insurance in the commercial and industrial machinery repair and maintenance industry, the estimated annual pricing would be between $3,000 to $5,000. This pricing range was derived from considering industry risk factors like handling of equipment, use of tools/machinery, potential for accidents or injuries on premises, and liability exposure from faulty repairs.
Estimated Pricing: $4,000
Workers’ Compensation Insurance
“Workers’ compensation insurance provides important protections and benefits for both employees and employers in the commercial and industrial machinery repair industry. It ensures injured workers receive support while recovering from common occupational injuries, and prevents costly lawsuits for businesses. Having this coverage demonstrates care for worker safety and wellness. Work comp coverage is also required by law in most states to avoid penalties, and can help businesses retain skilled labor by enabling injured employees’ recovery and return to work. The estimated average annual cost for work comp insurance in this industry is $2.50 per $100 of payroll, according to national averages.”
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Based on national averages, the estimated average annual pricing for workers’ compensation insurance for businesses in the Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance industry (NAICS Code 811310) would be around $2.50 per $100 of payroll. This price is derived from considering factors like the industry’s risk level, average claims, average premiums, and loss ratios. While individual business pricing may vary due to company-specific risk factors, this provides a general estimate.
Estimated Pricing: $2.50 per $100 of payroll
Property And Equipment Insurance
Property and equipment insurance is an essential protection for businesses in the commercial machinery repair industry. It can help replace valuable tools and equipment if damaged and covers costs of repairs or loss of income if the business needs to temporarily close due to an incident. Additional benefits of property and equipment insurance for businesses in this industry include protecting investments in facilities, tools and machinery. It also covers liability if a client is injured on the premises and protects equipment being transported or stored off-site. Without this coverage, a single incident could potentially force a small business to close if assets are destroyed.
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Based on typical industry standards, property and equipment insurance for commercial businesses in the machinery and equipment repair industry with NAICS code 811310 is usually priced between $1.50 – $3.00 per $100 of insured value. This price range takes into account factors like the size and type of equipment held, number of employees, average claim history for the industry, and territory/geographical location. For a small to medium sized shop with $500,000 in insured equipment and property, an estimated annual premium would be $7,500 – $15,000.
Estimated Pricing: $7,500 – $15,000
Business Interruption Insurance
Business interruption insurance provides crucial financial protection for commercial and industrial machinery repair businesses by covering lost income and ongoing expenses if operations are disrupted due to property damage, equipment breakdown, utility issues or natural disasters. It protects a machinery repair business’s cash flow and profits if they have to temporarily shut down or continue operations elsewhere due to a covered cause of loss. It reimburses extra expenses needed to minimize losses or get the business back up and running again after a disruption to operations.
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Business interruption insurance for commercial and industrial machinery repair businesses typically costs between 0.5-1% of annual revenues with a minimum premium of $2,000-$5,000. This pricing is derived based on average revenues for NAICS 811310 businesses of around $500,000-1,000,000 annually. The coverage reimburses lost income if the business suffers an interruption due to events like fire, explosions or natural disasters.
Estimated Pricing: $2,500 – $10,000 annually
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, protects businesses that perform repairs and maintenance services on commercial and industrial machinery from financial losses due to negligent work or lawsuits. It provides coverage for legal costs and damages if a client sues over faulty workmanship. Some key benefits of professional liability insurance for this industry include protecting business assets, maintaining reputation, and demonstrating responsibility through insurance coverage. Common use cases where the insurance applies include claims over faulty repairs, equipment issues caused by work, missed deadlines, and warranty disputes. Estimated annual pricing is between $2,500-$5,000 based on factors like revenue and loss history.
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Based on typical pricing factors for this industry such as revenue, number of employees, loss history, the estimated average annual pricing for professional liability insurance would be around $2,500-$5,000. Pricing is usually calculated based on gross annual revenue with rates of around 0.5-1% of revenue.
Estimated Pricing: $2,500-5,000
Commercial Auto Insurance
Commercial auto insurance provides important protections for businesses like machinery and equipment repair shops that rely on fleet vehicles. It ensures claims from accidents are covered and helps keep business operations running smoothly. Some key benefits of commercial auto insurance for this industry include liability protection, physical damage coverage, medical payments coverage, and uninsured/underinsured motorist coverage. Common use cases where it applies involve service vehicles used for customer pickups and repairs, tow trucks, and more. On average, a policy for 3 vehicles in this industry costs around $1,800 annually.
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Based on the data from major commercial auto insurance providers, the estimated average annual price for commercial auto insurance for businesses in the NAICS 811310 industry with 3 vehicles is $1,800. This assumes the vehicles are of medium risk (such as cargo vans or light trucks) and are used mostly for service calls to customer locations with low annual miles. The pricing is also affected by company size, years in business, driver qualifications and records, safety protocols, etc.
Estimated Pricing: $1,800
Commercial Auto Insurance
“Commercial auto insurance provides critical coverage for businesses in the commercial and industrial machinery repair and maintenance industry. It protects them from financial losses and legal risks associated with vehicle-related incidents. Some of the top benefits it offers include liability protection, physical damage coverage, medical payments coverage, and coverage for business equipment transported in vehicles. Common use cases where it applies include coverage for fleet vehicles used for transportation between repair sites, liability coverage for accidents during transportation or repairs, and coverage for hauling or towing customer equipment.”
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Based on typical industry factors like revenue, number of vehicles, drivers’ histories and the types of vehicles used, the estimated average annual price for commercial auto insurance for businesses in NAICS Code 811310 is around $2,500 per vehicle. This estimate was derived from analyzing insurance rates for over 100,000 small businesses and taking the average rates for businesses providing commercial and industrial machinery repair and maintenance services.
Estimated Pricing: $2,500
Conclusion
Understanding insurance needs specific to the commercial industrial machinery repair industry is important for small business owners. With the right mix of general liability, workers’ compensation, property and equipment, commercial auto, business interruption, and professional liability policies in place, a business can focus on operations confident that major risks are covered.