Top Business Insurance Needs for Urethane and Foam Product Manufacturers with NAICS Code 326150

UncategorizedReading Time: 8 minutes

Learn about the key types of business insurance needed to protect a urethane and foam manufacturing business from risks including general liability, property, product liability, auto and workers' compensation policies.

Key Takeaways

  • General liability insurance protects against third-party claims for bodily injury or property damage.
  • Property insurance covers damage or loss to buildings, equipment, inventory and profits from interruptions.
  • Product liability insurance protects against claims if customers are injured by defective products.
  • Commercial auto insurance covers legal liabilities from vehicle accidents during business use.
  • Workers’ comp covers medical bills and lost wages if employees are injured on the job.
  • Umbrella insurance provides additional liability protection above primary policies.
  • Business interruption insurance covers lost income if operations are disrupted.

Introduction

As a manufacturer in the urethane and foam products industry, it’s important to protect your business from a variety of risks through adequate insurance coverage. The key policies for this type of business include general liability, property, product liability, commercial auto, workers’ compensation, umbrella and business interruption insurance.

General Liability Insurance

General liability insurance provides important protections for businesses in the urethane and other foam product manufacturing industry. It shields companies from costly lawsuits if accidents occur that injure third parties or damage their property.

Some key benefits of general liability insurance for these types of businesses include protecting against third-party claims of bodily injury or property damage from product defects or accidents onsite. It also defends and pays legal fees if customers sue for damages. Liability insurance covers costs of product recalls and claims from accidental pollution and environmental damage. It provides peace of mind by removing the financial risk of unexpected lawsuits.

Category List
Benefits
  • Protect against third-party claims of bodily injury or property damage
  • Defend and pay legal fees if a customer sues for damages
  • Cover costs of product recalls
  • Indemnify against accidental pollution and environmental damage claims
  • Cover liability claims that arise from completed work
  • Protect lease agreements with landlords
  • Cover liability from non-owned vehicles used for business
  • Provides peace of mind to operate the business without financial risk
  • Cover liability claims that arise from completed work
  • Protect against loss of income due to operations being shutdown from a liability claim
Use Cases
  • Protects from liability claims if a customer is injured by a product defect
  • Covers costs if an employee is injured on the job
  • Provides defense and payment if the business is sued for pollution or environmental damage
  • Pays for legal costs and damages if a tripping hazard on business property causes injury to a visitor
  • Covers liability if a delivery vehicle is involved in an accident

Based on typical factors such as employee counts, revenue, and risk levels associated with urethane and foam manufacturing, the estimated average annual premium for general liability insurance would be around $15,000 – $20,000. Premiums are usually based on revenue volumes and number of employees, with additional risk factors for particular chemical usage and production processes that may increase pricing.

Estimated Pricing: $15,000 – $20,000

Property Insurance

Property insurance plays a crucial role in protecting businesses in the urethane and other foam product (except polystyrene) manufacturing industry. It safeguards their physical assets, inventory, ability to operate and overall financial health against various risks and unforeseen events. Given the significant financial investment required for specialized machinery, equipment breakdown coverage is particularly important for manufacturers in this industry. In addition to coverage for structures and business personal property, business interruption insurance also helps continue operations and payroll if facilities are damaged and temporarily shut down.

Category List
Benefits
  • Covers damage or loss to buildings and equipment from fire, lightning, wind, hail and other perils
  • Covers equipment breakdown, which protects against mechanical and electrical failures
  • Covers theft of equipment and inventory
  • Provides business income/extra expense coverage if operations are interrupted due to a covered loss
  • Covers property in transit like raw materials and finished goods being shipped
  • Covers liability if a third party is injured on the business’ premises
  • Protects the value of business assets and helps to continue operations after a loss
Use Cases
  • Coverage for buildings and structures
  • Coverage for business personal property (equipment, furniture, inventory, etc.)
  • Coverage for loss of income/extra expenses if operations are interrupted
  • Coverage for equipment breakdown or mechanical failures
  • Coverage for flood and earthquake damage

Based on industry data, the average property insurance price for businesses in the Urethane and Other Foam Product (except Polystyrene) Manufacturing with NAICS Code 326150 is $2.50 per $100 of insured value. This price was derived from annual reports on property insurance rates for manufacturing industries accounting for factors like operating procedures, equipment used, claims history for the specific industry code.

Estimated Pricing: $2.50/$100

Product Liability Insurance

Product liability insurance provides essential financial protection for businesses that manufacture urethane, foam, and other plastic products by covering costs and damages from product defects or injuries caused by their goods. It protects firms against claims, recalls, legal fees, and settlements to help maintain operations and customer relationships.

Category List
Benefits
  • Protects your business from costly lawsuits if a customer is injured by your products
  • Covers legal fees and costs if someone sues your business for a product-related injury
  • Reduces the financial risk of an unexpected product liability claim disrupting cash flow
  • Helps maintain positive customer and client relationships by demonstrating your commitment to safety
  • Provides coverage for any products liability claims that may arise from past work, protecting against claims that surface years later
  • Ensures compliance with contractual insurance requirements that many partners and vendors necessitate
Use Cases
  • Protection against injury or property damage claims caused by defective or dangerous products
  • Defense costs and settlement fees for claims arising from product defects
  • Coverage for recalls of defective products

Based on typical pricing for manufacturers in this industry, the estimated average annual premium for product liability insurance would be around $5-$7 per $1,000 of gross receipts, subject to a minimum premium of around $2,500. This pricing is derived from loss experience data accumulated by insurance companies for businesses in SIC Code 3089 (Plastics Products, Not Elsewhere Classified), which includes similar manufacturing processes and product hazards as NAICS 326150.

Estimated Pricing: $5-7 per $1,000 of gross receipts, minimum $2,500

Commercial Auto Insurance

Commercial auto insurance is an essential risk management tool for businesses in the urethane and other foam product manufacturing industry. It helps protect companies from financial losses resulting from vehicle incidents during business activities like deliveries, installations and servicing. Some key benefits of commercial auto insurance for these businesses include protecting from liability claims in accidents, covering costs to repair or replace vehicles, reimbursing medical bills for injured parties, and covering loss of income if a vehicle is disabled. Common use cases where this insurance applies include delivery trucks, service vehicles, employee vehicles used for business, and contractor vehicles involved in manufacturing. The estimated average annual price for adequate commercial auto insurance coverage for a business in this industry is around $1,500-2,000 per insured vehicle.

Category List
Benefits
  • Protects your business from liability claims in the event of an accident
  • Covers costs to repair or replace company vehicles in an accident
  • Reimburses medical bills for injured employees or others in an accident
  • Covers loss of income if a vehicle is disabled in an accident
  • Covers property damage to items being transported in company vehicles
  • Provides coverage when operating non-owned vehicles on company business
Use Cases
  • Delivery trucks transporting raw materials and finished goods between manufacturing facilities and customers
  • Service vehicles used by field technicians to visit customer sites
  • Employee vehicles used for business purposes
  • Vendor or contractor vehicles involved in the manufacturing process

Based on industry data and factors such as number of vehicles, drivers, mileage, safety record, and liability limits, the estimated average annual price for commercial auto insurance for businesses in the Urethane and Other Foam Product Manufacturing industry (NAICS 326150) is around $1,500-2,000 per vehicle. The estimate was derived from commercial auto insurance rates for similar manufacturing industries and average fleet sizes.

Estimated Pricing: $1,500-2,000 per vehicle

Workers’ Compensation Insurance

This reference provides useful information on workers’ compensation insurance for businesses in the urethane and other foam product manufacturing industry with NAICS code 326150. It outlines the top benefits, use cases, and estimated pricing for this important type of insurance coverage.

Category List
Benefits
  • Covers medical expenses if an employee gets injured or sick from work
  • Pays lost wages if an employee cannot work due to a work-related injury or illness
  • Protects the business from lawsuits if an employee is injured on the job
  • Provides peace of mind knowing employees’ healthcare and lost wages will be covered in case of an accident
  • Saves the business money in the long run vs paying for injuries out of pocket
  • Helps retain valuable employees and maintain productivity by ensuring they are cared for if injured
Use Cases
  • Covering costs of on-the-job injuries
  • Covering medical expenses for work-related accidents or illnesses
  • Compensating employees who are unable to work due to work-related injuries or illnesses
  • Covering lost wages for employees unable to work due to injuries sustained on the job
  • Protecting the business from expensive lawsuits in the event of a serious workplace injury

Based on national average workers’ compensation insurance rates for this industry, the estimated average annual price per $100 of payroll would be $1.50. This rate is calculated based on risk factors such as average claim costs, safety records, and compliance with safety regulations for this type of manufacturing work that involves chemicals and machinery.

Estimated Pricing: $1.50 per $100 of payroll

Commercial Umbrella Insurance

Commercial umbrella insurance provides an additional layer of liability protection for businesses in industries like manufacturing that face higher risks of product defects, pollution incidents or accidents resulting in costly lawsuits. It does this by covering claims exceeding a business’s primary insurance limits, offering protection from lawsuits exceeding those limits that could threaten personal assets, and providing liability coverage for risks usually excluded from standard business policies like pollution accidents and other unexpected events. Umbrella insurance gives businesses peace of mind knowing a wider range of risks are protected at an affordable price.

Category List
Benefits
  • Increased liability protection
  • Covers claims exceeding primary insurance limits
  • Protects personal assets from lawsuits
  • Covers pollution, explosion and other excluded risks from primary policies
  • Affordable way to obtain higher liability limits
  • Covers defense costs above primary limits
  • Automatic increase in umbrella coverage limits if primary limits increase
  • Peace of mind knowing a wider range of risks are covered
  • Umbrella insurers have large financial resources to pay major claims
  • Helps reduce risk and prevent financial ruin from a severe lawsuit
Use Cases
  • Protection from large liability claims that exceed primary general liability policy limits
  • Additional liability coverage for pollution, asbestos exposure and other excluded risks under the primary policy
  • Coverage for lawsuits from defective products or improper installations
  • Protection for accidents caused by owned or non-owned vehicles

Based on typical rates for the manufacturing industry and the risks associated with foam product manufacturing, the estimated average annual pricing for $1 million of commercial umbrella insurance would be around $1,500. This pricing assumes the business carries at least $1 million of commercial general liability insurance as underlying coverage. The rate is derived from published industry loss data and guidelines.

Estimated Pricing: $1,500

Business Interruption Insurance

Business interruption insurance provides crucial protection for businesses in manufacturing industries that rely on specialized equipment and continuous operations. Any disruption to the production process can negatively impact revenue and cash flow. Business interruption insurance covers lost income and profits if the business has to temporarily shut down due to covered causes of loss. It also covers extra expenses to maintain operations during downtime, such as renting temporary workspace. Having this insurance supports quick restoration of business activities after an insurable interruption occurs.

Category List
Benefits
  • Covers loss of income if the business suffers an interruption
  • Replaces lost profits if the business has to temporarily shut down operations
  • Covers extra expenses like renting temporary workspace if the business location is unusable
  • Provides funds to maintain payroll and pay operating expenses during downtime
  • Covers costs to repair or replace specialized equipment that is damaged or destroyed
  • Helps the business avoid financial losses due to interruptions from power outages or utility disruptions
  • Protects against losses from disruptions to the supply chain or delays in receiving raw materials
  • Supports continuity of operations so the business can get back up and running quickly after an interruption
Use Cases
  • Equipment breakdown or mechanical failure that stops or slows down production
  • Fire or natural disaster damage to the facility that halts operations
  • Loss of suppliers that prevents access to raw materials
  • Loss of major customers that reduces demand and sales
  • Power outage or utility disruption affecting production
  • Labor strike or shortage that limits workforce capacity

Based on industry statistics and typical insurer calculations, businesses in the Urethane and Other Foam Product manufacturing industry (NAICS 326150) on average pay around 1-2% of their annual revenue or Gross Profit for 12 months of Business Interruption Insurance coverage. For a company in this industry with $10 million in annual revenue, their BI insurance would be approximately $100,000-$200,000 per year.

Estimated Pricing: $100,000-$200,000 per year

Conclusion

By maintaining the right insurance package for your business needs, you can focus on operations while ensuring your company is financially protected. Work with an experienced agent to review your risks and policies regularly to stay compliant and protected as your business grows.

Frequently Asked Questions

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