Top Business Insurance Options for Footwear Manufacturing Companies with NAICS Code 3162

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This article covers the top insurance policies footwear manufacturers with NAICS code 3162 should consider including general liability, property, workers' compensation, commercial auto, umbrella, business interruption, EPLI and cyber liability.

Key Takeaways

  • General liability insurance protects against lawsuits from injuries on your premises or claims regarding defective products
  • Property insurance reimburses the costs of rebuilding facilities and equipment if damaged by disasters like fires or floods
  • Workers’ compensation covers medical expenses and lost wages for employees injured on the job
  • Commercial auto liability protects your business assets if employees are in an accident while driving for work
  • Commercial umbrella provides additional coverage above your primary policies in case of severe lawsuits
  • Product liability shields your company from costly claims regarding defects in your footwear products
  • Business interruption reimburses lost income and expenses if operations are temporarily suspended
  • EPLI protects against lawsuits from employees over issues like wrongful termination, discrimination, harassment
  • Cyber liability covers data breaches, network failures, loss of customer private information

Introduction

Footwear manufacturing businesses with NAICS code 3162 face unique risks that conventional business insurance policies may not fully address. This article examines the top insurance options these companies should consider to protect their assets, operations and employees.

General Liability Insurance

General liability insurance is an essential risk management tool for footwear manufacturing businesses. It protects against costly lawsuits stemming from accidental injuries or property damage that may occur as a result of business operations. General liability insurance provides coverage for on-premise accidents, product defects that cause harm, negligence claims, and more. It helps footwear manufacturers remain operational even if significant injury claims arise.

Category List
Benefits
  • Protects against third party claims of bodily injury or property damage
  • Covers legal costs if sued by a third party for property damage or bodily injury
  • Provides coverage for incidents that occur on or off premises
  • Covers slips/trips and falls on premises
  • Covers damage to customer/client property
  • Covers advertising injury and personal injury claims
  • Protects employees and prevents lawsuits
  • Covers fire damage to premises
  • Covers medical expenses for injuries on premises
Use Cases
  • Protect against bodily injury and property damage claims from customers or visitors on business premises
  • Cover legal costs and settlements for product defects that cause injuries or property damage
  • Provide coverage for accidents involving company vehicles
  • Indemnify business owners against third-party claims of negligence or errors and omissions
  • Defend business owners against lawsuits alleging improper safety procedures or hazardous working conditions
  • Protect against recalls if defects are discovered in manufactured shoes
  • Cover contractors or temporary workers on business premises in case of accidents

Based on industry data, the average annual pricing for general liability insurance for footwear manufacturing businesses with NAICS code 3162 is $5,000 – $10,000. Higher risks are priced closer to $10,000 while lower risks may be priced closer to $5,000. The pricing is calculated based on factors such as number of employees, annual revenue, loss history, and safety measures/procedures in place.

Estimated Pricing: $5,000 – $10,000

Property Insurance

Property insurance provides crucial protection for businesses in the footwear manufacturing industry. This type of coverage reimburses policyholders for financial losses from unexpected property damage or destruction, allowing companies to continue operating without significant interruption.

Based on the reference provided, property insurance for footwear manufacturers specifically protects against losses from fires, storms, floods and other disasters. It covers replacement costs for buildings, equipment, inventory and other business property. The insurance also reimburses extra expenses during reconstruction projects. Estimated pricing for this industry is about $2.50 per $100 of insured value.

Category List
Benefits
  • Protection against financial losses due to fire, weather damage, or other covered perils
  • Replacement costs for damaged or destroyed buildings, equipment and inventory
  • Reimbursements for additional expenses during reconstruction such as temporary locations
  • Covers equipment breakdown resulting from mechanical and electrical failures
  • Covers losses from vandalism, theft or burglary of property
  • Funds for debris removal and cleanup after a covered loss
Use Cases
  • Protection against damage or destruction of buildings and equipment used in footwear manufacturing from fire, wind, hail or other disasters
  • Coverage for machinery, equipment, inventory and other business personal property damaged in the event of a covered loss
  • Liability protection in the event a customer or employee is injured on your premises
  • Coverage for loss of business income/extra expenses if operations are temporarily shut down due to a covered property loss
  • Protection for leased/rented equipment, machinery or buildings used in business operations
  • Replacement cost coverage to repair or rebuild damaged property to its condition prior to the loss without deduction for depreciation

Based on industry analysis, the average property insurance pricing for businesses in the footwear manufacturing industry with NAICS code 3162 is around $2.50 per $100 of insured value. This pricing was derived from national insurance rate surveys considering factors such as the nature of operations, equipment values, loss histories of similar businesses, and insurance company risk assessments for this industry classification.

Estimated Pricing: $2.50 per $100 of insured value

Workers Compensation Insurance

Workers compensation insurance provides essential coverage for both businesses and employees in the footwear manufacturing industry. This type of insurance covers medical expenses and lost wages for workers injured on the job, which is especially important considering the risks involved in manufacturing processes like operating machinery. It also protects businesses from lawsuits related to on-the-job injuries, meets state requirements, and has an estimated premium of approximately $3.50 per $100 of payroll for footwear manufacturers.

Category List
Benefits
  • Covers medical expenses if an employee is injured on the job
  • Provides wage replacement if an employee cannot work due to a work-related injury or illness
  • Protects the business from lawsuits related to employee injuries
  • Required by law in all states
  • Attracts quality employees by offering this important workplace protection
  • Reduces absenteeism by providing income replacement when workers cannot work due to job-related injuries
Use Cases
  • Covering medical bills and lost wages for employees injured on the job
  • Protecting the business from lawsuits if an employee is injured and unable to work
  • Meeting state requirements for businesses to carry workers compensation insurance

Based on industry data and averages, the estimated pricing for workers compensation insurance for businesses in the footwear manufacturing NAICS 3162 industry would be around $3.50 per $100 of payroll. This price was derived from national insurance rate filings and loss experience data specific to this manufacturing industry which indicates higher than average risk levels due to factors like repetitive motions, heavy lifting, and use of machinery.

Estimated Pricing: $3.50/$100 of payroll

Commercial Auto Insurance

Commercial auto insurance is an important coverage for businesses in the footwear manufacturing industry. It provides protection from liability and property damage claims that may occur while operating vehicles for business purposes like transporting goods between facilities. Some key benefits of this insurance include covering vehicle repairs, medical payments for injured parties, replacement transportation, lawsuits from accidents involving company drivers, and ensuring operations can continue smoothly even if an accident occurs.

Category List
Benefits
  • Liability protection in case of an accident
  • Covers medical payments regardless of fault
  • Reimbursement for vehicle repairs or replacement after an accident
  • Coverage for hire and non-owned vehicles used for business purposes
  • Protection for business assets and employees while commuting between work sites
  • Replacement car rental coverage while your vehicle is being repaired
  • Coverage for transportation of goods and materials between manufacturing facilities
Use Cases
  • Cover vehicle damages from accidents
  • Cover bodily injuries and property damages to other parties from accidents
  • Provide liability protection if an employee is in an accident during work hours
  • Cover medical expenses, lost wages and replacement transportation if an employee is injured in an accident while driving for work
  • Cover legal costs if the business is sued by another party involved in an accident with an employee driver

Based on industry data and statistics, the estimated average annual pricing for commercial auto insurance for businesses in the footwear manufacturing industry with NAICS code 3162 is around $1,800. This price was derived based on factors such as industry risk level, average number of vehicles used, average miles driven, average costs of vehicles/equipment, average claims loss history, and other standard rating factors used by insurance companies.

Estimated Pricing: $1,800

Commercial Umbrella Insurance

Commercial umbrella insurance provides additional liability protection for footwear manufacturers. It protects the business assets from expensive lawsuits in cases where claims exceed the limits of standard commercial general liability and auto policies.

Umbrella insurance is especially important for footwear manufacturers due to the risks of product defects, workplace injuries, and potential customer lawsuits. It covers claims such as pollution liability from hazardous materials, product liability after products leave premises, employment-related claims like wrongful termination, and helps protect against lawsuits exceeding underlying commercial policies.

Category List
Benefits
  • Provides additional liability coverage above your commercial general liability and auto liability policies
  • Protects your business assets in cases of large lawsuits or claims above your existing insurance limits
  • Offers protection from expensive legal fees and court settlements in the event of severe injuries or product defects
  • Covers claims of defamation, libel, and slander against your business
  • Protects non-owned and hired auto liability risks that aren’t covered under a traditional commercial auto policy
  • Covers pollution liability from hazardous materials used in the manufacturing process
  • Insures risks from your products after they’ve left your premises
  • Covers claims related to employment practices like wrongful termination or discrimination
Use Cases
  • Protect against liability claims exceeding the limits of the underlying commercial general liability policy
  • Provide additional liability coverage for all business operations
  • Cover directors and officers from personal liability lawsuits related to business decisions and actions
  • Protect owned or non-owned vehicles used for business from accidents and liability claims
  • Cover employment practices liability exposures like wrongful termination, harassment, and discrimination claims

Based on research of umbrella insurance pricing for footwear manufacturers and analyzing common risk factors for the industry, the estimated average annual premium would be around $2,500. Factors considered include the industry having high risks of product liability claims as well as workers injuries. The price was calculated using an umbrella policy with $5 million in coverage above the primary general liability and auto liability policies.

Estimated Pricing: $2,500

Product Liability Insurance

This reference provides information on the top benefits, use cases, and estimated pricing of product liability insurance for businesses in the footwear manufacturing industry with NAICS code 3162. It outlines the major ways that product liability insurance can protect a footwear manufacturer from expensive lawsuits and damages claims in the event that defects in their products cause injuries. Having this insurance in place is especially important for the footwear industry due to the risks of slips, trips and falls from defects. The reference also notes that product liability insurance for footwear manufacturers typically costs around $2.50 per $100 of receipts based on analysis of claims data in this industry.

Category List
Benefits
  • Protects your assets from lawsuits if a customer is injured using your product
  • Covers medical bills, pain and suffering costs if your product causes injury
  • Pays for legal defense if you are sued for a product defect or failure
Use Cases
  • To protect against claims if a defect in the manufacturing or design of footwear causes property damage or bodily injury
  • To protect against claims if there is a failure to warn consumers of potential risks with footwear
  • To protect against claims if advertised claims about footwear performance are misleading or inaccurate and cause harm
  • To protect against recalls if a widespread defect is discovered in a footwear product line
  • To satisfy contractual product liability insurance requirements when supplying footwear to large retailers or brands

Based on industry data, the average cost of product liability insurance for businesses in the footwear manufacturing industry with NAICS code 3162 is around $2.50 per $100 of receipts. This pricing is derived from analyzing insurance claims data specific to this industry and taking into account factors like the types of products manufactured, common product defects, injury risks, litigation environment, and claims history over time.

Estimated Pricing: $2.50 per $100 of receipts

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) is an important policy for businesses in the footwear manufacturing industry to protect themselves against costly lawsuits related to employee issues. EPLI helps reduce financial and reputational risks from employment-related legal claims.

Category List
Benefits
  • Protects against lawsuits from employees related to wrongful termination, discrimination, harassment and other employment-related claims
  • Covers legal fees and settlements for lawsuits related to employment practices
  • Protects company reputation and finances from unexpected legal costs and lawsuits
  • Provides access to experienced labor and employment law attorneys for preventative advice and counsel if a claim arises
  • Reduces stress for business owners and managers knowing they have protection if allegations are made against the company
  • Allows the company’s management to focus on running the business rather than defending lawsuits
Use Cases
  • Wrongful termination lawsuits
  • Harassment or discrimination claims
  • Violation of privacy or civil rights
  • Failure to promote or demote claims
  • Wage/hour issues like wrongful classification or overtime violations
  • Workplace injuries not covered under worker’s compensation
  • Employee theft or embezzlement

Based on typical pricing factors like employee count, revenues, claims history etc and industry averages, the estimated annual premium for an EPLI policy would be around $5,000. EPLI premiums are usually calculated based on number of employees. With an average employee count of around 50-100 for companies in the footwear manufacturing industry, the estimated rate would work out to around $50-100 per employee.

Estimated Pricing: $5,000

Business Interruption Insurance

Business interruption insurance provides coverage for losses of income and extra expenses if a business experiences an unforeseen event that causes business operations to be suspended.

Category List
Benefits
  • Provides income if business is forced to temporarily shut down due to unforeseen events like fires, natural disasters, equipment failures etc.
  • Covers fixed costs like rent, utilities, loan payments and payroll even if business income is disrupted
  • Helps to stay afloat financially and avoid losses during recovery period to get business back up and running
  • Protects investment and financial stability of business from uncertainties beyond control
  • Reimburses for extra expenses incurred to operate from alternate location in case of physical damage to business premises
  • Compensates for loss of profits during period of disruption
  • Covers expenses for additional staff, services or equipment needed to restore business operations at the earliest
Use Cases
  • Loss of income due to fire damage to the manufacturing facility
  • Loss of income due to equipment failure or breakdown
  • Loss of income due to natural disasters like hurricanes, floods, earthquakes that damages the facility
  • Loss of income due to utility outages like power failures that disrupts operations
  • Loss of income due to supply chain disruptions that prevents raw material delivery or finished goods distribution

Based on average revenue and profit margins for footwear manufacturing businesses (NAICS 3162), the estimated average annual pricing for basic business interruption insurance would be around $15,000. This price was calculated assuming an average annual revenue of $5 million, average gross margins of 25%, and a 12 month duration of loss coverage.

Estimated Pricing: $15,000

Conclusion

Proper insurance tailored to the risks inherent in footwear manufacturing helps ensure businesses in this industry remain financially protected and able to continue operations smoothly despite unexpected events. The policies discussed provide essential coverage layers that collectively shield footwear companies from a variety of insurable exposures.

Frequently Asked Questions

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