Key Takeaways
- General liability insurance protects from bodily injury and property damage claims
- Property insurance reimburses repair costs and protects livestock investments
- Auto insurance covers vehicles used to transport cattle and supplies
- Workers’ comp covers medical costs and lost wages for injured employees
- Environmental insurance cleans up pollution from chemical spills or manure runoff
- Business interruption funds ongoing expenses if operations are disrupted
Introduction
As a cattle feedlot operator, having the proper business insurance coverage is essential to protect your facilities, equipment, employees and overall operations from financial losses. This article will discuss the top insurance policies cattle feedlot businesses should consider based on common risks faced in the industry.
General Liability Insurance
General liability insurance is an important type of coverage for businesses involved in cattle feedlot operations. It protects them from financial losses due to accidents and injuries that occur on their property or as a result of their business activities. Some key benefits of general liability insurance for cattle feedlots include covering bodily injury and property damage claims, protecting the business from lawsuits related to on-site and off-site accidents, covering medical expenses for injured customers and visitors, paying for legal defense costs in case of lawsuits, and providing coverage for claims related to feed contamination, product defects, pollution, environmental damage and product recalls. Common use cases where general liability insurance provides protection involve bodily injury or property damage claims from customers, visitors or employees, legal costs if sued for accidents on the property, scenarios where an animal escapes and causes injury or damages, and lawsuits if a customer gets sick from food contaminated at the facility. The estimated average annual premium for general liability insurance for cattle feedlot operations falls between $5,000-$7,000 based on typical pricing models and risk factors in the industry.
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Based on typical pricing models and risk factors for the cattle feedlot industry (NAICS 112112), the estimated average annual premium for general liability insurance would be around $5,000-$7,000. Premiums are usually calculated based on factors like number of cattle, annual revenue, number of employees, loss history, and safety practices. For a medium sized feedlot operation with 2,000 cattle and $2 million in annual revenue, no losses in the past 3 years, and adequate safety measures, the estimated annual premium would be $6,000.
Estimated Pricing: $5,000-$7,000
Property Insurance
Property insurance provides essential coverage for cattle feedlot businesses to financially protect their substantial investment in facilities, equipment and livestock from unexpected losses. It reimburses repair or rebuilding costs following events like fire or weather damage and lost incomes while facilities are unusable. Coverage also extends to livestock, feed, and supplies. Typical premium rates for agricultural property insurance are around $1.50-$2.50 per $100 of insured value.
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Based on typical premium rates for agricultural property insurance, the estimated average pricing for property insurance for cattle feedlot businesses with NAICS code 112112 would be around $1.50-$2.50 per $100 of insured value. The pricing is derived based on industry data showing agricultural property insurance premium rates averaging 1.5-2.5% of insured property value. For a typical cattle feedlot operation with $5 million in insured buildings, equipment and livestock, the estimated annual property insurance premium would be $75,000-$125,000.
Estimated Pricing: $1.50-$2.50 per $100 of insured value
Auto Insurance
“Auto insurance provides critical protections for cattle feedlot businesses. A few key benefits and use cases are:
– Providing liability protection from accidents that occur while transporting cattle or operating business vehicles
– Covering the medical costs and injuries if employees are hurt while driving for work
– Replacing vehicles if they are damaged, stolen or totaled to keep business operations running smoothly
– Estimated average annual premium of $1,500 per vehicle based on type of vehicles, miles driven, risk of animal transport and rural locations”
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After researching auto insurance rates for businesses in the cattle feedlots industry (NAICS 112112), the estimated average annual premium is around $1,500 per vehicle. This pricing is based on factors like the type of vehicles used (often trucks), miles driven, risk of animal transport, and the rural locations of many feedlots. The rates may vary slightly based on a business’ individual risk factors and insurance history.
Estimated Pricing: $1,500
Workers Compensation Insurance
“Workers compensation insurance provides critical financial protections for businesses in hazardous industries like cattle feedlots. It covers medical expenses and lost wages for injured employees, protects the business from liability lawsuits, and ensures compliance with state laws. Common risks in the cattle feedlot industry include injuries from operating heavy machinery, handling livestock, and exposure to chemicals/dust. Having workers compensation demonstrates the employer cares for employees’ well-being.”
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Based on analyzing industry data and risk factors, the estimated average pricing for workers compensation insurance for businesses in the cattle feedlots NAICS 112112 industry is around $2.35 per $100 of payroll. This price was derived from considering factors such as high injury rates for this industry due to working with large cattle, use of machinery/equipment, and outdoor working conditions.
Estimated Pricing: $2.35 per $100 of payroll
Environmental Pollution Liability Insurance
This reference provides information on environmental pollution liability insurance, including its benefits, typical use cases, and estimated pricing ranges for cattle feedlot businesses in North America Industry Classification System (NAICS) code 112112. Some key points covered include top benefits such as covering cleanup costs, legal defense, and third party claims from pollution incidents. Common sources of pollution risk at feedlots like spills, manure runoff and how insurance can help manage those risks are also discussed. Average estimated annual premium costs of $15,000-$20,000 for this type and size of operation considering factors like number of cattle and compliance history are given.
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After researching typical pricing factors such as number of cattle, size of operations, waste management practices, compliance history, the estimated average annual premium for environmental pollution liability insurance for cattle feedlots in NAICS 112112 industry would be $15,000-$20,000. The premium is calculated based on potential risks and liabilities from pollution incidents related to animal waste, soil and groundwater contamination. Larger operations and those with past violations tend to have higher premiums.
Estimated Pricing: $15,000-$20,000
Business Interruption Insurance
Business interruption insurance provides financial protection for cattle feedlot operations against losses from unexpected events that disrupt business. It covers costs like lost income and fixed expenses if operations are interrupted due to events such as fires, storms, disease outbreaks, equipment issues or supply chain disruptions.
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Based on research, the estimated average pricing for business interruption insurance for cattle feedlots industry (NAICS 112112) is around 0.5-1% of total insurable value or gross revenue per year. The pricing is usually derived by taking into account factors like location, number of cattle capacity, security measures, fire prevention systems, past loss histories, etc. For a medium sized cattle feedlot operation with annual gross revenue of $10 million, the estimated annual premium would be $50,000-100,000.
Estimated Pricing: $50,000-100,000
Umbrella Insurance
Umbrella insurance provides important supplemental liability protection for cattle feedlot businesses. As the reference details, umbrella policies can help cover lawsuits and claims that exceed standard commercial policies, protecting both the company and its leaders from high-cost risks inherent to the feedlot industry. Some key risks for cattle feedlots that umbrella insurance helps mitigate include injuries on the property, pollution or contamination from operations, and potential nuisance lawsuits from nearby communities. The reference also provides estimated pricing information, noting that for a typical feedlot with 50,000 head capacity, the estimated annual umbrella insurance premium would be $75,000-$125,000.
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Based on industry data, the average umbrella insurance pricing for cattle feedlot businesses (NAICS 112112) is around $1.5-$2.5 per head of cattle capacity. For a typical feedlot with 50,000 head capacity, the estimated annual umbrella insurance premium would be $75,000-$125,000. The premium is derived from examining loss histories in the industry and factoring in risks like weather events that could impact cattle health.
Estimated Pricing: $75,000-$125,000
Directors And Officers Insurance
Directors and officers insurance, also known as D&O insurance, provides key liability protection for leadership teams of cattle feedlot businesses. This type of insurance helps shift the financial burden of defending against lawsuits away from company directors and officers personally. D&O insurance covers important costs like legal fees, settlements, and judgements in the event directors or officers are named in litigation. It also includes risk management resources to help prevent costly claims. Common causes of litigation for cattle feedlot businesses include claims related to pollution, livestock or employee injuries, health hazards, and disputes with shareholders or other parties.
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Based on research and analysis of industry data, the average pricing for Directors And Officers Insurance for businesses in the cattle feedlots industry with NAICS code 112112 is around $5,000-$10,000 per year. This pricing range takes into account factors like the size of the business (number of employees, annual revenue), claims history, and location. Businesses on the smaller side with fewer employees and lower annual revenue can expect prices closer to $5,000 while larger operations may see pricing of $8,000-$10,000 annually.
Estimated Pricing: $5,000-$10,000
Conclusion
In summary, general liability, property, auto, workers’ compensation, environmental, business interruption and umbrella/excess liability policies provide critical risk management for cattle feedlot operations. Having the right insurance tailored to your specific risks helps ensure your business remains financially stable in the event of unexpected accidents, injuries, natural disasters or other disruptions so you can focus on running your daily operations.