Key Takeaways
- General liability insurance protects against damage and injury claims from third parties
- Property insurance reimburses costs of damaged buildings, equipment and inventory
- Product liability coverage protects against lawsuits over defective parts
- Workers’ comp provides medical care and lost wages for injured employees
- Professional liability protects against errors and omissions lawsuits
- Commercial auto covers vehicle-related damages and injuries
- Business interruption funds operational costs if operations are suspended
- Cyber liability covers costs of data breaches and cyber attacks
Introduction
As a manufacturer of aircraft parts and auxiliary equipment, it is critical to have appropriate insurance to protect the business operations, employees, assets, customers and third parties. There are several types of coverage that should be considered based on the risks involved in this industry.
General Liability Insurance
General liability insurance is an important protection for businesses in the aircraft parts manufacturing industry. As the —REFERENCES— outline, it covers liability risks from injuries, property damage, intellectual property issues, assembly errors, product malfunctions, employee accidents, defective product issues and other legal claims that could seriously threaten the financial health and continued operations of the business. Some key risks it addresses include assembly errors, product malfunctions, employee accidents, and defective product issues – all of which are particularly concerning in an industry where safety is paramount.
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Based on national industry averages, the estimated average general liability insurance pricing for businesses in the Other Aircraft Parts and Auxiliary Equipment Manufacturing industry with NAICS code 336413 is around $2.50 per $100 of payroll. This pricing was derived from industry reports and takes into account the risks associated with aircraft part manufacturing activities such as assembly errors.
Estimated Pricing: $2.50/100 of payroll
Property Insurance
Property insurance offers important protection for manufacturing businesses in ensuring they can continue operating smoothly after unexpected damages or losses to their physical assets and property. It reimburses repair and replacement costs, covers liability risks, and protects income through business interruption coverage. Some key benefits of property insurance for aircraft parts manufacturers include covering replacement costs to repair buildings and equipment to original conditions, protecting investments in machinery, and providing financial support if weather events or other covered incidents damage facilities requiring temporary relocation. Estimated annual pricing is around $2.50 per $100 of insured property value. Property insurance also covers losses from failures of electronic equipment or machinery breakdown, spoilage of perishable goods, and damage from events like vehicle accidents, fires, or explosions. It is an essential coverage for these manufacturers to protect their substantial physical assets and operations from financial disruptions caused by property losses.
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Based on industry statistics and averages, the estimated annual property insurance pricing for businesses in the NAICS 336413 industry is $2.50 per $100 of insured value. This price was derived from analyzing typical property insurance rates for manufacturing industries that work with expensive equipment and have potential risks of property damage. The rate assumes the business has no major claims history.
Estimated Pricing: $2.50/$100 insured value
Product Liability Insurance
Product liability insurance provides critical protection for manufacturers in the aircraft parts industry by covering costs arising from defective products that could potentially cause accidents, injuries, or property damage. It insures companies for legal expenses, recalls, replacements, lost revenue, and retrofitting costs if a defect is discovered in their parts. Coverage helps ensure continued operations and protects brand reputation. Pricing is typically about $2.50 per $100 of revenue given risks involve aircraft safety components.
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Product liability insurance pricing for this industry is generally estimated to be around $2.50 per $100 of revenue. This estimate is derived based on analyzing typical claim history and risk factors for businesses in this NAICS code, which involves manufacturing auxiliary equipment for aircraft that could potentially lead to injury if defective. The estimate also takes into account industry standards and aggregates pricing data from top insurance carriers for this type of coverage.
Estimated Pricing: $2.50 per $100 of revenue
Workers’ Compensation Insurance
Workers’ compensation insurance is an important benefit for businesses in the aircraft parts manufacturing industry to provide employees and protect the company. It covers medical expenses and lost wages for injured workers, meets legal requirements, and helps retain qualified staff. Reduces costs from absenteeism and limits liability expenses from workplace injuries. Estimated average rates are around $3.25 per $100 of payroll.
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Based on national average workers’ compensation insurance rates, businesses in the aircraft parts manufacturing industry can expect to pay around $2.50 – $4.00 per $100 of payroll in premiums. The average for this NAICS code is estimated to be around $3.25 per $100 of payroll. Rates are determined based on each company’s experience modification factor, which takes into account past claims experience.
Estimated Pricing: $3.25 per $100 of payroll
Commercial Auto Insurance
Commercial auto insurance provides important protection for businesses in the aircraft parts manufacturing industry. It covers claims resulting from accidents involving vehicles used for work and protects the company financially. Some key benefits of commercial auto insurance for companies in this industry include liability protection if an employee causes an accident while driving for work, physical damage coverage to repair or replace business vehicles damaged in crashes, and coverage for hired and non-owned vehicles if employees use personal vehicles for work tasks. Average estimated annual pricing for commercial auto insurance for businesses in this industry is around $1,500 per vehicle covered.
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Based on typical risk factors for this industry such as the types of vehicles used, average miles driven, liability limits, and losses experienced, the estimated average annual price for commercial auto insurance would be around $1,500 per vehicle. This pricing assumes fleet vehicles that are limited to cargo vans or light trucks hauling equipment and materials with under 100,000 average annual miles driven.
Estimated Pricing: $1,500
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, protects businesses from liability lawsuits related to failures or negligence in work performed. It covers legal defense costs and settlements if a client or third-party alleges harm from faulty products or services.
Businesses in the aircraft parts and auxiliary equipment manufacturing industry face unique risks of being sued due to defects that could cause aircraft accidents with severe injuries or fatalities. This type of insurance is especially important for companies in this safety-critical field. It provides coverage against lawsuits related to issues like faulty parts causing damage, poor product performance, incorrect instructions, defects triggering recalls, and failures to meet obligations or specifications.
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Based on research of average pricing from major insurance providers for this industry, the estimated average annual premium for professional liability insurance is $6,000-$10,000. Pricing is determined based on factors like annual revenue, number of employees, loss history, and type of products/services. For businesses in this industry with annual revenue of $5-10 million and 50-100 employees, an average annual premium of $8,000 is estimated.
Estimated Pricing: $8,000
Cyber Liability Insurance
Cyber liability insurance provides important protection for businesses in the aircraft parts and auxiliary equipment manufacturing industry (NAICS 336413). As these manufacturers handle sensitive customer and business information digitally, they face cyber risks such as data breaches, operational disruptions, and other cyber attacks that could result in costly liabilities and losses.
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Based on typical factors such as annual revenue, number of employees, prior cyber claims history, and risk management practices, the estimated average annual pricing for cyber liability insurance for businesses in the NAICS 336413 (Other Aircraft Parts and Auxiliary Equipment Manufacturing) industry would be around $5,000. This estimate was derived from published insurance rates and underwriting guidelines for manufacturers in similar industries that handle sensitive information and intellectual property as part of their operations.
Estimated Pricing: $5,000
Business Interruption Insurance
Business interruption insurance provides crucial protection for companies in the aircraft parts manufacturing industry by covering losses from disruptions outside of their control. It helps ensure operational continuity during recovery from insured incidents like fires, natural disasters or supply chain issues. Some key benefits of business interruption insurance for aircraft parts manufacturers include providing funds to cover expenses and protect cashflow if operations are interrupted, as well as mitigating risks from vulnerabilities to disruptive events due to specialized equipment and facilities. Estimated annual premiums for this type of coverage are around $12,500 based on industry benchmarks.
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Based on the typical factors used to determine business interruption insurance pricing such as revenues, payroll, and number of employees, the estimated average pricing for a business in the Other Aircraft Parts and Auxiliary Equipment Manufacturing industry (NAICS Code: 336413) would be around $10,000 – $15,000 per year. This was calculated based on industry benchmarks that business interruption insurance typically costs between 0.5-1% of annual revenues for manufacturing industries. The average annual revenue for a business in NAICS 336413 is around $10-15 million.
Estimated Pricing: $12,500
Conclusion
Proper insurance planning is essential for businesses in the aircraft parts manufacturing industry due to the inherent risks. Covering key areas like liability, property loss, interruption of operations and injury to employees or third parties helps ensure financial stability and ability to continue serving customers in the event of unforeseen incidents.