Top Business Insurance Options for Crop Harvesting Businesses With NAICS Code 115113

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This article covers the top business insurance options crop harvesting businesses primarily using machinery with NAICS code 115113 should have in place to protect their operations, employees, equipment and limit liability.

Key Takeaways

  • Commercial general liability insurance protects against third party claims of injury or property damage.
  • Commercial auto insurance covers vehicles, equipment, and drivers in the event of an accident.
  • Commercial property insurance protects buildings, equipment, crops, and income from losses.
  • Workers’ compensation insurance covers medical expenses and lost wages for job injuries.
  • Umbrella insurance provides additional liability coverage above primary limits.
  • Business interruption insurance covers lost income if operations are disrupted.

Introduction

Crop harvesting businesses that primarily use machinery face various risks to their operations, property, employees, and income potential. Having the proper business insurance policies in place is crucial to protecting the business from financial losses and liability issues. This article covers the top insurance options these businesses should strongly consider.

Commercial General Liability Insurance

Commercial general liability (CGL) insurance is an essential policy for crop harvesting businesses to protect against liability claims and lawsuits that may arise from day-to-day operations. CGL insurance provides liability protection from both on-site and off-site operations. It covers legal fees and settlements if the business is found liable for incidents involving bodily injury, property damage, or other liability risks associated with the use of machinery, equipment, chemicals/fertilizers, and other normal business activities like crop harvesting. Maintaining adequate CGL coverage also helps crop harvesting businesses comply with insurance requirements in contracts and maintain positive relationships with customers and landowners.

Category List
Benefits
  • Protects the business from third party claims of bodily injury or property damage
  • Covers legal defense costs if a claim is filed against the business
  • Pays for damages, fees and settlements if the business is found liable for a claim
  • Covers liabilities from on-site and off-site operations
  • Covers liability from use of machinery and equipment
  • Provides peace of mind knowing the business is protected from unexpected lawsuits
  • Helps the business maintain positive relationships with landowners and customers
  • Compliance with contracts – Many contracts require businesses to carry liability insurance
Use Cases
  • Protects against premises liability if someone gets injured on your property
  • Covers legal costs if you are sued for accidentally damaging someone else’s property during harvesting operations
  • Provides liability protection if your equipment causes an accident while operating on public roads
  • Covers liability claims if someone alleges that they became ill from contact with crops you harvested
  • Protects against liability if chemicals or fertilizers used on crops drift and damage neighboring properties
  • Covers liability if one of your employees gets in an accident while operating machinery for work

Based on industry risk factors and average claims, the estimated pricing for commercial general liability insurance for crop harvesting businesses primarily using machines (NAICS Code: 115113) would be around $8-12 per $1,000 of gross receipts. Crop harvesting presents risks from the operation of machinery around crops and in agricultural settings. Premiums are typically calculated based on gross receipts to account for business size and potential losses. An average sized crop harvesting business with $5 million in annual gross receipts could expect to pay around $40,000-60,000 annually for commercial general liability coverage.

Estimated Pricing: $8-12 per $1,000 of gross receipts

Commercial Auto Insurance

Commercial auto insurance is a critical tool for risk management and financial protection for businesses engaged in crop harvesting primarily through the use of machines. Some of the key benefits, use cases, and estimated pricing are outlined below:

Category List
Benefits
  • Covers liability if an employee gets into an accident while driving a company vehicle for work
  • Covers repairs or replacement of company vehicles if damaged in an accident
  • Covers medical expenses for employees injured in an accident while on the job
  • Covers legal costs if the business is sued due to an accident
  • Covers towing and rental car costs if a company vehicle needs repairs after an accident
  • Covers damage or theft of company vehicles
  • Customized coverage for specialized farming vehicles and equipment
  • Higher liability limits that fully cover risks of operating heavy machinery
Use Cases
  • Covering fleet vehicles like trucks and tractor trailers used to transport crops
  • Insuring harvesting equipment like combines and tractors used in the fields
  • Protecting liability from accidents involving the vehicles and equipment

Based on research on typical commercial auto insurance rates for businesses engaged in crop harvesting primarily by machine (NAICS Code: 115113), the estimated average annual pricing would be around $4,500-$6,000. Rates are derived based on factors such as number of vehicles, driver information, claims history, coverage limits. Due to the hazardous nature of operating large farming machinery on public roads, insurance rates tend to be on the higher side for this industry. Further discounts may be available for safety features or driver training programs.

Estimated Pricing: $4,500-$6,000

Commercial Property Insurance

“Commercial property insurance provides important coverage for businesses in the crop harvesting industry. This type of insurance can help protect against financial losses from damage to expensive agricultural equipment and property.”

Category List
Benefits
  • Protects expensive agricultural equipment and machinery from losses due to fire, theft, or other covered causes of loss
  • Covers buildings such as barns, sheds, and other structures used for storage or operations
  • Replaces lost income if equipment is damaged and unable to work for an extended period
  • Covers crops in the field or in storage if damaged by a covered cause of loss like fire or weather events
  • Provides liability protection if employees are injured or property damage occurs for which the business is found responsible
  • Covers debris removal and building code upgrades after a covered loss to help get operations running again quickly
Use Cases
  • Protect harvest equipment like combines, tractors, trucks from theft, damage or destruction
  • Cover the costs to repair or replace facilities like barns and sheds if damaged by natural disasters like hail, wind or fire
  • Provide liability coverage if equipment causes damage to other property during operations
  • Replace lost income if equipment is unavailable due to a covered loss event

Based on typical factors such as property value, location, claims history, and industry risk level, the estimated average annual pricing for commercial property insurance for businesses in the Crop Harvesting, Primarily by Machine with NAICS Code 115113 industry would be around $5,000-$8,000. Pricing tends to be on the higher side for this industry due to risk of equipment damage/loss from field work, weather events impacting crops/property, and liability risks.

Estimated Pricing: $5,000-$8,000

Workers’ Compensation Insurance

“Workers’ compensation insurance provides critical protection for employees and employers in the crop harvesting industry that primarily uses machines. It covers medical expenses and lost wages for workers who get injured on the job from common risks like equipment accidents and repetitive motion. Rates for this type of insurance in the crop harvesting machine industry typically range from $1.50 to $2.00 per $100 of payroll.”

Category List
Benefits
  • Protects the business from liability lawsuits if an employee gets injured on the job
  • Covers medical expenses and lost wages for injured employees
  • Mandatory in most states for businesses with employees
  • Reduces turnover from workplace injuries
  • Lowers other insurances costs like general liability
  • Demonstrates care for employee well-being
Use Cases
  • Cover medical expenses if an employee gets injured on the job
  • Provide lost wages if an employee cannot work due to a job-related injury or illness
  • Pay for vocational rehabilitation if an injury prevents an employee from returning to their previous job

Based on research, the average workers’ compensation insurance pricing for businesses in the Crop Harvesting, Primarily by Machine industry (NAICS Code 115113) is around $1.50 to $2.00 per $100 of payroll. Rates can vary depending on a company’s experience modification rate and claims history but are generally in this range. Machinery operations do carry more risk than other agricultural jobs, so rates tend to be on the higher side compared to other crop production activities.

Estimated Pricing: $1.50 – $2.00/100 of payroll

Umbrella Insurance

Umbrella insurance provides crop harvesting businesses additional liability protection above their primary insurance limits. It covers claims such as accidents during harvesting operations, equipment failures that cause crop damage, injuries to employees, and risks associated with transporting harvested crops. Here are the top benefits of umbrella insurance for crop harvesting businesses:
– Protects against liability claims above the primary insurance limits
– Provides additional liability coverage for all business operations
– Covers legal costs if sued for damages
– Provides liability protection for owned or non-owned watercraft
– Covers claims from slander, libel, or defamation of character
– Insures against pollution and environmental damage claims
– Protects directors and officers from liability lawsuits

Category List
Benefits
  • Protects against liability claims above the primary insurance limits
  • Provides additional liability coverage for all business operations
  • Covers legal costs if sued for damages
  • Provides liability protection for owned or non-owned watercraft
  • Covers claims from slander, libel, or defamation of character
  • Insures against pollution and environmental damage claims
  • Protects directors and officers from liability lawsuits
Use Cases
  • Protecting against liability claims from accidents during harvesting operations
  • Covering liability in the event of equipment failure leading to crop damage
  • Providing liability protection if employees are injured during harvesting
  • Covering liability risks associated with transportation of harvested crops

Based on average risks and losses for crop harvesting businesses that primarily use machinery, umbrella insurance would typically price between $2-$5 per $1,000 of coverage above the primary general liability limits, which are often $1 million. Given average assets and revenues for businesses in this industry, $2 million of umbrella coverage would be a common amount, pricing out to around $4,000-$10,000 annually.

Estimated Pricing: $4,000-$10,000 annually

Business Interruption Insurance

Business interruption insurance provides critical protection for crop harvesting businesses that depend on a narrow harvest window each season. This type of insurance can help cover lost income and ongoing expenses if unexpected events disrupt normal harvesting operations and timelines. It also reimburses repair costs and protects against liability issues that could impact profits.

Category List
Benefits
  • Provides financial assistance if crop losses prevent harvesting operations due to weather events like hail, drought or flooding
  • Covers lost income and ongoing expenses if equipment breakdowns or mechanical issues stop harvesting
  • Reimburses costs for cleaning, repairing or replacing damaged property after events like severe storms or fires
  • Allows you to cover net income that would have been earned if operations had not been interrupted or impacted by an insurable event
  • Helps minimize disruption to cash flow and enables you to continue paying employees and cover fixed costs when revenues are reduced
  • Covers loss of crops or stored commodities if damaged on-site by insured perils like fire or wind
  • Includes extra expenses to temporarily relocate operations or rent replacement equipment/facilities to resume business
  • Protects against loss of profits if a supplier’s location is damaged, preventing them from providing key crop materials
  • Provides liability coverage if a business interruption claim from a third party like a contractor or customer results from your operations being impacted
Use Cases
  • Machinery breakdown causes harvesting operations to halt
  • Weather events like hail or flooding damage crops and delay harvest
  • Labor strike or shortage prevents harvesting on schedule
  • Regulatory actions or permits issues stop harvesting operations
  • Power outage or equipment failure halt post-harvest storage and transport

Based on typical business interruption insurance pricing formulas, which take into account factors like annual revenues, fixed costs, and exposure to specific perils for the industry, the estimated average annual premium for crop harvesting businesses (NAICS 115113) would be around 1.25% of annual revenues. Given the average annual revenue per firm in this industry is approximately $660,000, the estimated price would be $8,250 per year.

Estimated Pricing: $8,250 per year

Conclusion

In summary, commercial general liability, auto, property, workers’ compensation, umbrella and business interruption policies provide layered protection for common risks facing crop harvesting businesses. Maintaining adequate insurance limits and coverages helps manage financial risks and ensures business continuity even if unexpected incidents occur.

Frequently Asked Questions

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