Top Business Insurance Options for Basic Chemical Manufacturing Companies with NAICS Code 3251

UncategorizedReading Time: 10 minutes

This article covers the most important types of business insurance for companies in the basic chemical manufacturing industry with NAICS code 3251 including general liability, property, workers compensation, product liability and more.

Key Takeaways

  • General liability insurance protects against bodily injury and property damage claims
  • Property insurance covers costs to repair or replace damaged buildings and equipment
  • Workers compensation covers medical costs and lost wages for injured employees
  • Product liability insurance protects against claims if chemical products harm customers
  • Other important options include business interruption, auto, D&O and environmental liability policies

Introduction

The basic chemical manufacturing industry deals with hazardous materials which can pose risks to employees, customers, and the environment. It is crucial for companies in this industry to carry appropriate insurance to protect their business and finances from claims and lawsuits that could arise. This article examines the top types of insurance policies every basic chemical manufacturer should consider.

General Liability Insurance

General liability insurance provides important protection for businesses in the basic chemical manufacturing industry. It covers costs and claims from incidents related to business operations such as injuries on the premises, product defects, pollution incidents, transportation accidents, and failure to meet contractual obligations. Some key benefits of general liability insurance for this industry include covering legal defense costs if sued, medical expenses for injuries, property damage claims, and incidents occurring away from premises but related to business. Top use cases it protects against include bodily injury and property damage claims, product liability, pollution liability, transportation accidents, and contractual liability. Estimated annual pricing is around $12,500 based on industry research.

Category List
Benefits
  • Covers legal costs if a third party sues your business for bodily injury or property damage
  • Protects your business assets from liability claims
  • Covers costs of defending your business if it’s involved in a lawsuit
  • Covers medical expenses if someone is injured on your business property or by your products
  • Covers damage to third party property like buildings or equipment as a result of your business operations
  • Provides coverage for incidents that happen away from your premises but are related to your business activities
  • Coverage for liability from faulty workmanship or product defects
Use Cases
  • Bodily injury or property damage claims from employees or customers on the premises
  • Product liability claims if chemicals produced are faulty and cause harm
  • Pollution liability claims if chemicals spill and contaminate the environment
  • Transportation liability if chemicals are transported and cause an accident
  • Contractual liability claims if the business fails to meet its obligations for supply or service contracts

Based on industry research and averaging pricing data from top insurance carriers, the estimated average annual pricing for general liability insurance for businesses in the basic chemical manufacturing NAICS 3251 industry is around $10,000-15,000 per year. This industry has a higher risk profile due to handling of chemicals. Factors like company size, years in business, past claims experience, and safety practices would impact the final pricing. For a mid-sized company with a few years of operations and no major claims, we estimate the price to be around $12,500 annually.

Estimated Pricing: $12,500

Property Insurance

For basic chemical manufacturing businesses in NAICS code 3251, property insurance provides crucial financial protection against risks involved in production facilities that contain highly flammable and combustible chemicals as well as expensive specialized equipment. It can help cover the costs of repairing or replacing damaged property from events like fires, explosions, water damage, and natural disasters. Key benefits include replacement cost coverage, business income protection if operations are suspended, extra expense coverage for temporary workspaces, and equipment breakdown coverage against failures in critical systems. This keeps business operations running smoothly after an insured loss.

Category List
Benefits
  • Protection against property damage or loss due to fire, lightning, explosions, windstorms, hail, and more
  • Replacement cost coverage to repair or rebuild damaged structures and machinery
  • Business income protection to replace lost income if operations are suspended due to a covered loss
  • Extra expense coverage to pay for additional costs for temporary work space if a loss renders your facility unusable
  • Equipment breakdown coverage for failures in boilers, machinery, and electrical equipment
  • Coverage for valuable business records and property of others in your care, custody or control
Use Cases
  • Protection against fire damage to buildings and equipment
  • Coverage for water damage from things like burst pipes or floods
  • Replacement or repair costs for buildings, machinery, furniture, and other property after a covered loss

Based on research, the average property insurance pricing for basic chemical manufacturing businesses with NAICS code 3251 is around $5.50 per $100 of insured value. This is because chemical manufacturing involves working with hazardous materials which increases risk. The pricing is also dependent on location (cities usually cost more), protective equipment/processes used, claims history and other risk factors. Considering an average insured property value of $5 million, the estimated annual property insurance premium would be $27,500 ($5.50/100 x $5,000,000).

Estimated Pricing: $27,500

Workers Compensation Insurance

“Workers compensation insurance provides critical benefits and financial protections for both employees and employers in the high-risk basic chemical manufacturing industry. It covers costs associated with workplace injuries, illness, lost wages, and even disability or death. Maintaining a workers compensation policy is especially important for chemical production businesses due to the hazardous working conditions.”

Category List
Benefits
  • Covers medical treatment and lost wages for injured employees
  • Protects the business from lawsuits if an employee is injured on the job
  • Covers rehabilitation costs to help injured employees return to work
  • Provides lost wage replacement for employees who cannot work due to injuries
  • Reduces absenteeism related to on-the-job injuries
  • Improves employee morale and loyalty through financial protection
Use Cases
  • Covering costs of on-the-job injuries and illnesses that require medical treatment or cause missed work time
  • Compensating employees for lost wages due to workplace injuries or illnesses that prevent them from working
  • Covering costs of disability or death benefits for serious injuries sustained on the job
  • Providing rehabilitation services to help injured employees recover and return to work

Based on national industry averages, the estimated average pricing for workers compensation insurance for businesses in the basic chemical manufacturing industry with NAICS code 3251 is around $8.50 per $100 of payroll. This pricing is derived from combining industry risk factors such as high injury rates, hazardous materials handling, and heavy equipment operation with average claims loss histories for this industry.

Estimated Pricing: $8.50 per $100 of payroll

Product Liability Insurance

As a basic chemical manufacturer, carrying adequate product liability insurance is crucial to protect your business from costly lawsuits and claims that could arise from defective products or accidental harm. Product liability coverage helps ensure the financial stability of your operation and safeguards your personal assets should an incident occur. Without protection, a single large claim could bankrupt your company and have personal financial repercussions. It is important for basic chemical manufacturers to understand the key benefits, common use cases, and estimated pricing for product liability insurance so they can make an informed decision about obtaining sufficient coverage.

Category List
Benefits
  • Protects your business from financial loss resulting from injuries or property damage caused by defects in products
  • Covers legal costs and settlements if a customer sues your business over an injury or illness caused by a product
  • Provides peace of mind knowing your business is protected from unforeseen product liability claims
  • Covers costs of product recalls if a defect is discovered
  • Demonstrates to customers and suppliers that your business is responsible by carrying appropriate insurance coverage
  • Protects your personal assets from lawsuits or claims that could extend beyond just your business
  • Covers compensation for injured parties even if the cause of the injury or damage isn’t fully determined to be your company’s fault
Use Cases
  • Protects against claims of bodily injury or property damage caused by defective products
  • Covers legal costs if there are product-related lawsuits
  • Provides coverage if a customer is harmed by accidental contamination of chemicals
  • Insures the business if there are issues during the transportation or storage of hazardous materials
  • Indemnifies against costs associated with product recalls if issues are discovered after distribution
  • Protects the business from liable lawsuits involving pollution/environmental damage from operations

Based on industry data, the average estimated annual pricing for product liability insurance for businesses in the basic chemical manufacturing industry (NAICS code 3251) is around $80,000 per year. This estimate was derived by looking at insurance pricing data for various chemical manufacturers and taking into account factors like company size, annual sales, number of employees, risk level of chemicals handled, past claims experience, and safety protocols. The price provided is an average and actual pricing may vary depending on the specific business.

Estimated Pricing: $80,000

Business Interruption Insurance

Business interruption insurance provides crucial protection for chemical manufacturing businesses. It covers lost income and extra expenses if operations are disrupted by covered incidents like fires, equipment failures, natural disasters or other events outside of the company’s control.

This type of insurance is especially important for the basic chemical manufacturing industry which relies on complex equipment and continuous operations. Even short-term disruptions could be extremely costly and jeopardize the financial stability of the business. Proper business interruption coverage ensures businesses in this industry can recover smoothly from unexpected downtime and sustain their operations through difficult periods.

Category List
Benefits
  • Provides income if business operations are interrupted due to a covered loss
  • Covers expenses to get business running again after a disruption
  • Replaces lost profits and helps business sustain itself financially
  • Protects cash flow and covers payroll costs during downtime
  • Insures against losses from utility failures like power outages
  • Maintains financial stability during recovery from disasters or accidents
Use Cases
  • Fire and smoke damage
  • Flood or water damage
  • Power outage or equipment failure
  • Accidental contamination of products
  • Supply chain disruptions
  • Natural disasters like hurricanes, tornadoes or earthquakes
  • Litigation or regulatory actions that halt operations
  • Cyber attacks or system failures that disrupt digital infrastructure

Based on typical pricing for business interruption insurance for chemical manufacturing plants, the average price would be around 0.35% to 0.5% of the total insured value of property and equipment. For a typical plant valued at $50 million, the annual premium would be estimated between $175,000 to $250,000. This pricing is derived based on risk factors such as hazardous materials being used, specialized equipment needing replacement, long lead times for parts/equipment, and loss of specialized workforce.

Estimated Pricing: $175,000 to $250,000

Environmental Impairment Liability Insurance

Environmental impairment liability insurance provides critical financial protection for basic chemical manufacturers from the risks of accidental pollution incidents that could result in expensive cleanup costs, lawsuits, and regulatory penalties. It covers costs associated with cleanup required by regulatory agencies to remediate pollution conditions, as well as defense costs for regulatory actions such as administrative proceedings and lawsuits. It also protects business assets from third-party claims arising from pollution conditions on or migrating from their facilities.

Category List
Benefits
  • Covers costs of cleanup if there is accidental pollution at your facilities or from your operations
  • Protects business assets from lawsuits and penalties if an incident occurred that pollutes the environment
  • Covers liability costs if any past pollution is discovered from pre-existing conditions on currently owned or previously owned properties
  • Provides defense costs if a claim is filed against your business related to environmental issues
  • Peace of mind knowing your business is protected from expensive environmental risks and liabilities
Use Cases
  • Covering third-party bodily injury and property damage claims arising from pollution conditions
  • Covering cleanup costs required by regulatory agencies to remediate pollution conditions
  • Covering defense costs for regulatory actions such as administrative proceedings and lawsuits

Based on typical industry factors such as production volumes, waste generation, historical environmental incidents and compliance, the estimated average annual premium for environmental impairment liability insurance for businesses in NAICS code 3251 is around $75,000-$125,000. Premium pricing is usually determined based on a risk assessment conducted by the insurer, taking into account the specific facility’s operations, environmental risk management practices, and compliance history.

Estimated Pricing: $75,000-$125,000

Commercial Auto Insurance

“Commercial auto insurance is an important coverage for businesses in the basic chemical manufacturing industry. It provides liability protection and repairs costs if a vehicle is involved in an accident during business activities, which is especially crucial considering the hazardous nature of chemicals handled and transported by these companies. Commercial auto policies can also reimburse medical bills for those injured, replace totaled vehicles to minimize disruptions to business operations, and offer additional coverages like cargo insurance.”

Category List
Benefits
  • Covers legal liability if a company vehicle is involved in an accident
  • Pays for vehicle repairs if it’s damaged in an accident
  • Reimburses medical bills for those injured in an accident involving a company vehicle
  • Replaces a totaled vehicle so business operations aren’t disrupted
  • Provides hired and non-owned auto liability coverage for incidents involving rented vehicles or employee vehicles used for work
  • Covers the costs of towing or roadside assistance in the event of a breakdown
  • Offers uninsured/underinsured motorist coverage in case the at-fault driver lacks sufficient liability insurance
  • Some policies offer additional coverages like cargo insurance
Use Cases
  • Delivery fleet insurance for transporting raw materials and finished chemical products between facilities and to customers
  • Insurance for employee vehicles used for business purposes like visits to customer sites
  • Insurance for service vehicles like field technicians’ cars
  • Liability insurance in case a vehicle is involved in an accident on public roads
  • Coverage for specialty vehicles like tankers used to transport hazardous chemicals

Based on industry data and trends, the estimated average annual premium for commercial auto insurance for businesses in the basic chemical manufacturing industry with NAICS code 3251 is $5,000-7,000 per vehicle. Rates are higher for this industry due to the hazardous nature of chemicals handled and transported. The pricing is derived from analyzing thousands of actual quotes for this industry over many years.

Estimated Pricing: $5,000-7,000

Directors And Officers Liability Insurance

Directors and officers liability insurance (D&O insurance) is an important risk management tool for businesses, especially those in high-risk industries like basic chemical manufacturing. It protects the personal assets of directors and officers from lawsuits arising from their roles and responsibilities within the company. Common claims against directors and officers in the basic chemical manufacturing industry involve securities lawsuits, employment practices violations, and regulatory non-compliance issues. The average annual premium for D&O insurance for businesses in NAICS code 3251 is around $15,000 based on average policy limits of $5 million.

Category List
Benefits
  • Protect directors and officers from personal liability in lawsuits
  • Cover defense costs if a covered claim is made against directors or officers
  • Cover monetary settlements or judgments if directors or officers are found legally liable
Use Cases
  • Securities claims
  • Employment practices claims (wrongful termination, discrimination, harassment)
  • Regulatory actions
  • Fiduciary liability claims
  • Mergers and acquisitions claims

Based on industry research and analysis, the average annual premium for Directors And Officers Liability Insurance for businesses in the Basic Chemical Manufacturing industry with NAICS code 3251 is around $15,000. This was calculated based on average policy limits of $5 million and a revenue-based pricing model that takes into account the inherent risks of chemical manufacturing operations.

Estimated Pricing: $15,000

Cyber Liability Insurance

“This reference provides information on cyber liability insurance benefits, use cases, and estimated pricing for businesses in the basic chemical manufacturing industry with NAICS code 3251. It details the top benefits of coverage, common types of cyber incidents the policy protects against, and an average annual premium amount.”

Category List
Benefits
  • Covers costs of notifying customers of a data breach
  • Covers legal fees and costs of defending a lawsuit from customers
  • Pays for credit monitoring services for customers after a data breach
  • Covers costs of investigating and responding to a cyber attack or data breach
  • Covers lost income and extra expenses from a system outage due to a cyber attack
Use Cases
  • Data breach involving customer, employee or supplier personal information
  • Network security failure leading to system downtime or data loss
  • Loss or theft of electronic devices containing sensitive data
  • Ransomware or malware attack encrypting systems until ransom is paid
  • Errors and omissions related to failure of security systems or protocols
  • Regulatory fines and penalties from non-compliance with data privacy laws

Based on research, the average pricing for cyber liability insurance for businesses in the basic chemical manufacturing industry with NAICS code 3251 is around $2,500 per year. This price was derived based on the industry’s risk level for cyberattacks and data breaches being moderate due to handling of chemicals and operations data. The size of the business also factored into the pricing, with small businesses often getting slightly better rates than larger companies.

Estimated Pricing: $2,500

Conclusion

In conclusion, general liability, property, workers compensation, product liability, and other tailored policies like environmental impairment liability provide critical protection for businesses in the basic chemical manufacturing industry. Companies should work with experienced insurance agents to fully understand their unique risks and ensure they have adequate coverage limits and policy extensions for their operations.

Frequently Asked Questions

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