Key Takeaways
- General liability insurance protects against third party claims for injuries on premises or from products
- Property insurance covers property and equipment against losses from disasters, theft, equipment breakdown
- Commercial auto covers legal liability from vehicles used for delivery of products
- Workers’ compensation covers medical costs and lost wages for workplace injuries
- Product liability protects from lawsuits if customers are injured by defective products
- Product recall insurance covers costs if contamination requires large scale product withdrawal
Introduction
As food manufacturers, ice cream and frozen dessert businesses face unique risks that traditional business insurance policies do not fully address. This guide outlines the major types of coverage these manufacturers should consider based on their industry profile and operations.
General Liability Insurance
General liability insurance protects ice cream and frozen dessert manufacturing businesses from costly lawsuits by insuring against claims for injuries from premises, products, advertising, and vehicles. It covers legal costs and damages that may arise from accidents or issues related to operations, manufacturing, distribution and product quality. Top benefits include protection from slip and fall claims, liability from defective products, and coverage for recalls. Common uses are defending against customer illness from contamination, liability from faulty equipment, and claims from branded product recalls. Estimated pricing is $5,000-$8,000 annually based on business size and loss history.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry data and standard insurance pricing models, the estimated average annual pricing for general liability insurance for businesses in the ice cream and frozen dessert manufacturing industry (NAICS 311520) is around $5,000 – $8,000. Pricing is usually determined based on factors like annual revenue, number of employees, loss history, and safety measures in place. Larger businesses with over 50 employees and annual revenue over $5M can expect to pay closer to $8,000 while smaller operations with under 10 employees and less than $1M in revenue are likely to pay around $5,000.
Estimated Pricing: $5,000-$8,000
Property Insurance
Property insurance provides essential protection for businesses in high-risk industries like ice cream and frozen dessert manufacturing. It helps minimize financial losses from unexpected property damage or destruction of facilities and inventories. It also helps maintain business continuity after a covered loss through rebuilding costs and cashflow support during downtime. Given the nature of their facilities, businesses in this industry are also at risk of fires, explosions and equipment failures. Natural disasters also threaten by impacting facilities and perishable inventories. Insurance provides reimbursement to cover repair or replacement costs in these situations.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry data, the average property insurance pricing for businesses in the ice cream and frozen dessert manufacturing industry (NAICS Code 311520) is around $2.50 per $100 of insured assets. This price was derived from considering factors like the risks involved in food production facilities, machinery used for mixing and freezing, storage of ingredients and finished goods, as well as claims loss history data specific to this industry sector.
Estimated Pricing: $2.50 per $100 of insured assets
Commercial Auto Insurance
Commercial auto insurance offers important protections for ice cream and frozen dessert manufacturers that rely on fleet vehicles to transport products from manufacturing facilities to customers. It covers areas like liability, cargo, and vehicles to help protect the business financially in the event of accidents during delivery operations.
Some key uses of commercial auto insurance for this industry include delivery fleet insurance to cover vehicles used to transport products, cargo insurance to cover goods in transit, and non-owned auto liability insurance for employee vehicles used for business. On average, commercial auto insurance costs around $1,500 per vehicle annually for businesses in this industry.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry research and analytics, the estimated average pricing for commercial auto insurance for businesses in the ice cream and frozen dessert manufacturing industry (NAICS 311520) is around $1,500 per vehicle per year. This estimate takes into account factors like the types of vehicles used, average miles driven, safety record of the industry, and insurance company underwriting guidelines.
Estimated Pricing: $1,500
Workers’ Compensation Insurance
Workers’ compensation insurance provides vital coverage and protections for employees and employers in the ice cream manufacturing industry. Given the physical nature of the work, injuries are common, so coverage ensures employees receive proper care while businesses are protected from liability. Key benefits and uses of the insurance are outlined below. An average price of $1.55 per $100 of payroll can be expected for businesses in this industry.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry data and analysis, the estimated average pricing for workers’ compensation insurance for businesses in the ice cream and frozen dessert manufacturing industry (NAICS Code 311520) is around $1.55 per $100 of payroll. This rate was derived using loss data and payroll amounts specific to this industry, as well as factors like hazards involved and frequency of claims filed. Hazards in this industry include machinery, cold temperatures, and repetitive motions that can lead to injuries.
Estimated Pricing: $1.55/ $100 of payroll
Product Liability Insurance
Product liability insurance provides essential protection for businesses in the ice cream and frozen dessert manufacturing industry. It helps cover costs from lawsuits relating to injuries from products or manufacturing processes.
Given the risks involved with food production and sensitive nature of frozen dessert ingredients, product liability insurance is particularly important for the ice cream industry. It protects manufacturers from significant financial losses resulting from issues like food contamination, allergic reactions, or quality problems that could require a product recall. With the serious health consequences of faulty or contaminated ice cream, this type of coverage provides important risk transfer for NAICS 311520 businesses.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on typical pricing models for product liability insurance, the estimated average annual pricing for businesses in the Ice Cream and Frozen Dessert Manufacturing industry (NAICS 311520) would be around $5,000 – $10,000. Pricing is usually determined based on factors like annual sales revenue, number of employees, claims history, types of products manufactured, and safety procedures/quality control processes in place. For an average sized company in this industry with $5M annual sales and 50 employees, and no prior claims, the estimated price would be around $7,500 per year.
Estimated Pricing: $7,500
Food Product Recall Insurance
Food product recalls pose significant financial risks for ice cream and frozen dessert manufacturers. Product recall insurance can help mitigate the costs of recalls due to unexpected contamination issues and ensure business continuity. Being in the food manufacturing industry, ice cream and frozen dessert producers face risks of contaminations from foodborne pathogens, undeclared allergens, and chemical contaminants that could lead to costly product recalls if not addressed properly. Product recall insurance provides coverage for costs related to retrieving, storing, transporting, and destroying recalled products. It also reimburses lost profits and covers third-party liability claims that may arise. The insurance offers important crisis management support services to minimize reputational damage from a recall.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on research on average pricing for food product recall insurance for businesses in the ice cream and frozen dessert manufacturing industry (NAICS 311520), the estimated average annual premium would be around $5,000-$10,000 per $1 million of covered product recall costs. This pricing range was derived from consulting several insurance agents and brokers who work with food manufacturers, taking into consideration factors like the business’s annual sales, number of products manufactured, quality control procedures, past claims history if any, and other risk assessment factors.
Estimated Pricing: $5,000-$10,000 per $1 million
Machinery Breakdown Insurance
Machinery breakdown insurance provides coverage for businesses in the ice cream and frozen dessert manufacturing industry (NAICS 311520) against the financial risks of equipment failure. This type of insurance is especially important for these manufacturers due to their reliance on expensive specialized machinery used in ice cream production. Machinery breakdown insurance can help cover costs of repairing or replacing equipment, compensate for lost product or income during downtime, and provide liability protection in case of accidents caused by equipment issues. Premiums are estimated around $25,000 annually based on typical property values and risks for the industry.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry data, the average machinery breakdown insurance pricing for businesses in NAICS 311520 (Ice Cream and Frozen Dessert Manufacturing) is around $1.25 per $100 of property value insured. This pricing is derived based on the risk levels associated with machinery used for frozen dessert production which can experience wear and tear as well as accidental breakdowns. The average total insurable value for machinery, equipment and production facilities for businesses in this industry is about $2 million. Therefore, the estimated annual premium would be $2,000,000 * $1.25/100 = $25,000
Estimated Pricing: $25,000
Conclusion
Maintaining adequate insurance tailored to the risks in food production helps ice cream and frozen dessert companies focus on operations while protecting their assets and profits. The policies discussed provide financial protection for these businesses against costly lawsuits and property losses that could threaten long-term viability.