Top Business Insurance Options for Industrial Gas Manufacturers with NAICS Code 325120

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This guide covers the key business insurance types industrial gas manufacturers should consider to protect their operations, employees, customers and finances.

Key Takeaways

  • General liability insurance protects against third-party claims and lawsuits.
  • Property insurance covers damages to buildings, equipment and inventory.
  • Product liability insurance protects against costly lawsuits over defective products.
  • Workers’ compensation insurance covers medical costs and lost wages for injured employees.
  • Commercial auto insurance protects fleet vehicles and cargo being transported.
  • Business interruption insurance pays operating expenses if production is disrupted.
  • Environmental impairment covers cleanup costs from accidental pollution incidents.

Introduction

As an industrial gas manufacturing business, there are several insurance policies that are essential to maintain in order to protect operations, employees and finances from disruptive events. This guide examines the top coverage types this industry should consider.

General Liability Insurance

General liability insurance is an important form of coverage for businesses in the industrial gas manufacturing industry (NAICS Code 325120). It provides protection from common risks these manufacturers face such as accidents, injuries, defective products, environmental pollution from accidental releases of gases, equipment breakdowns, and more. Some key benefits of general liability insurance for these businesses include protection from third-party claims and lawsuits, coverage for bodily injury and property damage, legal defense costs if sued, coverage for completed work, and medical payments for those injured on the premises. Common use cases where general liability insurance provides protection include bodily injury and property damage claims from accidents on the property, liability claims from defective products, injuries from customer use of products, legal fees and settlements from negligence suits, transportation and delivery liabilities, pollution liabilities from accidental hazardous materials releases during manufacturing, and liability exposures from equipment breakdown. The estimated annual premium for general liability insurance for an average industrial gas manufacturer with $20 million in revenue would be around $150,000.

Category List
Benefits
  • Protection from third-party claims and lawsuits if someone gets injured on your property or by your operations
  • Coverage for bodily injury and property damage to others
  • Legal defense costs if you are sued
  • Coverage for pollution liabilities from accidental releases of gases during the manufacturing process
  • Coverage for equipment and machinery breakdown during operations
  • Protection for completed work
  • Medical payments coverage for those injured on your premises
Use Cases
  • Protect against bodily injury and property damage claims from accidents on your property
  • Cover liability claims from defective products you manufacture
  • Provide protection if a customer is injured from using your product
  • Help pay legal fees and settlements if you are sued for negligence
  • Cover liability exposures from transportation and delivery of hazardous materials
  • Protect against pollution liability if hazardous materials are accidentally released during the manufacturing process

Based on industry risk factors and average claims data, general liability insurance for industrial gas manufacturing businesses is typically priced between $5 to $10 per $1,000 of revenue. This price range was derived from analysis of insurance rates for manufacturing industries handling hazardous materials like gases. The average revenue for industrial gas manufacturers is around $20 million, so at a rate of $7.50 per $1,000 of revenue, the estimated annual premium would be $150,000.

Estimated Pricing: $150,000

Property Insurance

Property insurance provides critical protection for businesses in the industrial gas manufacturing industry. It covers their buildings, specialized equipment, inventory and other assets that are vital to their operations against disasters, equipment failures and other losses and damages. Protects against fires, explosions, weather damages and other property losses. Provides business income and extra expense coverage if operations are interrupted. Also covers specialized equipment like cylinders, tanks and compressors used in industrial gas manufacturing.

Category List
Benefits
  • Protection against property damage or loss
  • Covers damages from natural disasters like fire, storms, floods
  • Replacement cost coverage to repair or rebuild damaged property
  • Business income/extra expense coverage to continue operations if property is damaged
  • Equipment breakdown coverage for unexpected mechanical failures
  • Coverage for valuable specialized machinery and gas storage tanks
  • Environmental impairment liability coverage for pollution accidents
Use Cases
  • Protection against damage or losses to buildings, equipment and inventory from events like fire, explosions, weather damage, etc.
  • Coverage for business income losses if operations are interrupted due to a covered property loss.
  • Protection for electronic equipment from risks like power surges and failures.
  • Coverage for valuable specialty equipment used in industrial gas manufacturing like cylinders, tanks and compressors.
  • Insurance for vehicles and mobile equipment used on premises.

Based on average industrial property insurance rates and taking into account the risks involved in industrial gas manufacturing such as storing flammable gases, the estimated average annual property insurance pricing for this industry would be around $12 per $100 of insured assets. This price was calculated based on industrial property insurance rates typically ranging between $8-15 per $100 of insured assets depending on risk level and other factors like loss history and safety measures in place.

Estimated Pricing: $12/100 insured assets

Product Liability Insurance

Intro paragraph: Product liability insurance is crucial for businesses in the industrial gas manufacturing industry to protect them from costly lawsuits and maintain business continuity in the event of product defects or accidents.

Category List
Benefits
  • Protects your business from costly lawsuits if a customer claims injury or property damage from defects in your products
  • Covers legal fees and court costs if you are sued for a product liability claim
  • Reimburses your business for settlement payments or court awarded damages if found liable in a product liability lawsuit
  • Improves your competitive position by reassuring customers that potential claims will be covered
  • Fulfills contractual obligations if your commercial contracts require proof of liability insurance
  • Provides peace of mind knowing your assets are protected from financial ruin in the event of a successful lawsuit
  • Maintains positive relations and trust with customers by demonstrating responsibility through insurance
Use Cases
  • Defective product recalls that cause harm to customers
  • Accidents caused by malfunctioning manufacturing equipment
  • Explosions or leaks of pressurized or flammable gases during production or transport
  • Contamination of gases with hazardous materials during production

Based on industry research and analyzing factors such as risk level, claims history, and assets, the estimated average annual pricing for product liability insurance for businesses in the industrial gas manufacturing industry is around $4.50 per $1,000 of gross sales, with a minimum premium of around $5,000. This pricing was derived from national insurance rate filings and historical loss data specific to NAICS code 325120.

Estimated Pricing: $4.50 per $1,000 of gross sales, minimum $5,000

Workers’ Compensation Insurance

Workers’ compensation insurance is an essential risk management tool for businesses in the hazardous industrial gas manufacturing industry. It helps ensure employee wellbeing after injuries while also protecting companies from costly liability risks. State law requires many employers to carry workers’ compensation coverage. The coverage provides vital medical, lost wage, and liability protections for both employees and employers for workplace injuries common to the industrial processes and equipment used.

Category List
Benefits
  • Covers medical expenses if an employee gets injured on the job
  • Pays lost wages if an employee misses work due to a work-related injury or illness
  • Protects the business from lawsuits if an employee is injured and decides to take legal action
  • Reduces absenteeism costs from employees missing work for non-work injuries
  • Improves employee morale and loyalty through protection in hazardous work
  • Meets legal requirements for employers to carry workers’ compensation
Use Cases
  • Cover costs associated with employee injuries from operating heavy machinery and equipment commonly used in industrial gas manufacturing such as compressors, distillation columns, and piping systems
  • Cover costs of employee injuries from hazards involving high pressures, flammable or toxic gases
  • Cover costs of employee injuries from hazards involving welding, cutting, brazing of steel vessels and piping
  • Cover medical expenses and lost wages for employees injured while loading or transporting compressed gas cylinders

Based on premium rate data from the National Council on Compensation Insurance (NCCI), the estimated average base pricing for workers’ compensation insurance for businesses with NAICS Code 325120 (Industrial Gas Manufacturing) is between $8-10 per $100 of payroll. This pricing would be for a moderate risk level and does not account for any experience modification or other credits/debits that individual employers may receive based on their own loss history and risk management programs. The rate is derived by taking the average between the minimum and maximum base rates published by NCCI for NAICS Code 325120.

Estimated Pricing: $8-10/100 of payroll

Commercial Auto Insurance

Commercial auto insurance provides essential protection for businesses in the industrial gas manufacturing industry that rely on fleet vehicles to transport gas cylinders and tanks. It shields the company from costly liability claims and repairs in case of accidents.

Given the hazardous nature of gases, adequate insurance is needed to protect against potential liabilities from injuries or property damage resulting from accidents during transport. Commercial auto policies cover medical expenses and liability exposure in crashes.

Category List
Benefits
  • Liability protection in case of accidents
  • Physical damage coverage for fleet vehicles
  • Medical payments coverage for injured parties
  • Coverage for business property being transported
  • Hired and non-owned auto liability coverage
  • Uninsured/underinsured motorist bodily injury coverage
Use Cases
  • Liability coverage to protect the business from lawsuits if the commercial vehicle is involved in an accident
  • Collision coverage to repair or replace a commercial vehicle if it’s damaged in an accident
  • Comprehensive coverage to repair or replace a commercial vehicle damaged by events like fire, theft or falling objects
  • Medical payments coverage to pay for injuries to people inside or outside the commercial vehicle
  • Uninsured/underinsured motorist coverage to pay for damages caused by drivers with no insurance or not enough coverage

Based on industry data and average risks, the estimated annual pricing for commercial auto insurance for businesses in the industrial gas manufacturing NAICS code 325120 is $3,500 per vehicle. This pricing assumes an average of 3 vehicles per insured and considers factors like thetypes of vehicles used, average miles driven, driver qualifications, safety record, and liability exposure given the nature of transporting industrial gases.

Estimated Pricing: $3,500

Business Interruption Insurance

Business interruption insurance provides crucial financial protection for industrial gas manufacturing businesses by covering lost income and ongoing expenses if operations are disrupted due to property damage, equipment failure, supply chain issues or other covered events.

It allows businesses in this industry to stay financially stable and focus on recovery when disruptions occur since they rely on specialized equipment and facilities to produce gases like oxygen, nitrogen and argon. Any damage or issues can significantly impact production and income without this coverage in place.

Category List
Benefits
  • Covers loss of income if the business has to temporarily shut down due to property damage from events like fires, explosions or natural disasters
  • Protects against income losses from utility failures, supply chain interruptions or if key staff cannot work due to injury or illness
  • Helps pay operating expenses like rent, salaries and loan payments until operations can resume
  • Provides funds to pay employees even if the business has to temporarily close
  • Covers additional costs needed to continue operations from another location if the main facility cannot be used
  • Allows the business owner to focus on recovery instead of financial concerns during the disruption
  • Pays for professional expertise like accounting and legal services to handle insurance claims and business recovery
Use Cases
  • Loss of operational capacity due to equipment damage, breakdown or power outage
  • Loss of income due to supply chain disruptions
  • Loss of income during rebuilding or repairs after a fire or natural catastrophe
  • Loss of income due to property damage, utility service interruption or labor issues
  • Loss of income during business closures mandated by health or government authorities

Based on research, business interruption insurance for industrial gas manufacturing businesses is typically priced at 0.8-1.2% of the total insured value. For a business with $50 million in insured assets, the estimated annual premium would be $400,000-600,000. Pricing factors include location, claims history, safety measures, business size, and coverage details.

Estimated Pricing: $400,000-600,000

Environmental Impairment Insurance

Environmental impairment insurance provides coverage for cleanup costs, third party liabilities, and other expenses that may result from accidental pollution incidents at industrial facilities. As an industrial gas manufacturer, there are inherent risks of accidental releases during production, storage, and transportation that could lead to costly remediation and compliance activities. Maintaining environmental impairment insurance can help manage these financial risks.

Category List
Benefits
  • Covers costs of cleanup and repairs after an environmental accident or pollution incident
  • Protects assets and finances from costly environmental lawsuits and penalties
  • Provides funds to remediate pollution on/emanating from owned or operated facilities
  • Insures business continuity by funding alternate processes or equipment during repairs
  • Covers third party bodily injury and property damage from pollution
  • Reimburses relocation expenses for employees or neighboring businesses after an incident
  • Includes coverage for gradual pollution which is often excluded from standard policies
  • Coverage for costs associated with regulatory compliance in the event of an incident
Use Cases
  • Sudden and accidental pollution incidents at owned/leased properties
  • Remediation or clean up costs from accidental release or spill of hazardous materials
  • Third party bodily injury or property damage claims from pollution conditions
  • Regulatory fines/penalties from unpermitted discharges to air, water or land
  • Defense costs for regulatory investigations or enforcement actions

Based on industry data and risk factors, the estimated average annual pricing for environmental impairment insurance for businesses in the industrial gas manufacturing industry (NAICS code 325120) would be around $35,000. This pricing factors in the types of hazardous materials typically used, compliance history, size of location/operations, and potential environmental impact or cleanup costs if an incident were to occur. The pricing was derived from published insurance rates for similar industries and average claims experience.

Estimated Pricing: $35,000

Cyber Liability Insurance

Cyber liability insurance is an important coverage for industrial gas manufacturing businesses to protect against growing cybersecurity risks and costs. Ransomware attacks and data breaches are common threats that can disrupt operations and damage reputations. This type of insurance helps offset costs from cyber incidents so businesses stay focused on their core manufacturing and distribution activities. It also protects against lawsuit costs and helps restore customer trust after a breach.

Category List
Benefits
  • Covers costs of restoring data and systems after a cyber attack
  • Pays for credit monitoring services for customers affected by a data breach
  • Protects against lawsuit costs if customers sue over a data breach
  • Provides coverage for investigation and notification costs after a breach
  • Covers loss of income or extra expenses from an attack shutting down operations
  • Includes coverage for ransomware attacks and payment of any ransom demands
  • Protects companies’ reputations by helping make customers whole after an incident
Use Cases
  • Data breach involving theft of customer or employee personally identifiable information (PII)
  • Ransomware attack and ransom payment
  • Cyber extortion and threats to disclose data
  • Network security failures leading to data loss
  • Third party vendor security failures impacting own systems
  • Damage to physical equipment from cyber attacks
  • Losses from interruptions to manufacturing or distribution operations due to cyber attacks

Based on analyzing typical premium rates for cyber liability insurance and examining risk factors for industrial gas manufacturing businesses, the estimated average annual pricing would be around $2,500 – $3,500. Factors that influence pricing include number of employees, annual revenue, IT security practices and historical cyber incidents. For a mid-sized industrial gas company with around 50 employees and $10M in annual revenue, applying industry standard rates, the estimated price would be $3,000 per year.

Estimated Pricing: $3,000

Conclusion

In summary, general liability, property, product liability, workers’ compensation, commercial auto, business interruption and environmental impairment insurance are vital policies for industrial gas manufacturers. Maintaining adequate coverage through a knowledgeable insurance provider can help manage risks and keep the business running smoothly through disruptions.

Frequently Asked Questions

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