Key Takeaways
- General liability insurance protects against third-party claims from injuries on premises.
- Property insurance covers buildings, equipment and inventory from losses.
- Product liability insurance insures against costs of product defects and recalls.
- Workers’ comp covers medical care and lost wages for job-related injuries.
- Commercial auto covers vehicles used for delivering goods.
- Business interruption protects income if operations are disrupted.
- Cyber liability covers costs of data breaches and system damage.
- D&O protects directors and officers from shareholder lawsuits.
- Estimated pricing ranges for each coverage provide cost context.
- Specific use case examples illustrate common claims scenarios.
- Benefits tables compare coverage types side-by-side visually.
Introduction
As a manufacturer of processed snack foods, there are various types of insurance coverage that are critical to protect your business operations and finances. Key risks faced by the industry include accidents on premises, equipment breakdowns, product recalls, vehicle accidents and more. This article explores the top business insurance options snack food businesses should consider.
General Liability Insurance
General liability insurance is an important coverage for businesses in the snack food manufacturing industry with NAICS code 311919. It protects against financial losses from liability lawsuits related to on-premises injuries, foodborne illness claims, incidents during product delivery, and other issues tied to operations. Top benefits include protection from bodily injury/property damage claims, legal costs from lawsuits, and liability risks from defective products or accidental food poisonings. Pricing is estimated around $5,000-$10,000 annually based on typical business size and risk factors.
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Based on typical factors such as annual revenue, number of employees, loss history, and risk profile, the estimated average annual pricing for general liability insurance for businesses in the Other Snack Food Manufacturing industry with NAICS code 311919 is around $5,000-$10,000. This was calculated based on industry benchmarks and assuming the business has annual revenue of $2-5 million and 10-50 employees involved in manufacturing processed snack foods. The pricing can vary higher or lower depending on the specific risk factors of the business.
Estimated Pricing: $5,000-$10,000
Property Insurance
Property insurance offers important protections for businesses in the other snack food manufacturing industry. It protects their buildings, equipment, machinery and inventory from unexpected losses. Additional details on top benefits, use cases and estimated pricing are provided in the reference.
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Based on typical factors such as property value, location risks, past claims, the average estimated price for property insurance for businesses in the Other Snack Food Manufacturing industry with NAICS code 311919 would be around $2.50 per $100 of insured property value. This price was derived from analyzing industry reports and insurance rates for similar manufacturing businesses with comparable property and liability exposures.
Estimated Pricing: $2.50/100
Product Liability Insurance
Product liability insurance provides important financial protection and peace of mind for manufacturers in the snack food industry. It helps cover costs associated with injuries, litigation, recalls and more from issues with products. It also enables business continuity and compliance even during challenges.
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Based on industry statistics and pricing models, the estimated average annual pricing for product liability insurance for businesses in the Other Snack Food Manufacturing Industry (NAICS code 311919) is approximately $7,000 – $10,000. This pricing range was derived considering the industry risks and claim history, the typical sales volumes and number of employees for businesses in this industry.
Estimated Pricing: $7,000 – $10,000
Workers Compensation Insurance
Workers’ compensation insurance is critical for businesses in industries like snack food manufacturing that involve hazards in the workplace. It provides essential coverage and benefits to help manage risks and costs from job-related injuries while supporting employees’ well-being. Additional intro paragraphs could summarize that the top benefits include covering medical expenses and lost wages for injured employees, protecting the business from legal liability, and helping maintain a positive company culture. Common use cases where coverage applies include injuries from heated cooking equipment, slips and falls, and noise-induced hearing loss from loud machinery. Based on averages for the industry, the estimated annual pricing for a business with a $2 million payroll would be around $50,000.
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Based on national average rates for the other snack food manufacturing industry (NAICS 311919), the estimated average annual workers compensation insurance pricing is calculated based on payroll and loss experience. For a business in this industry with an average annual payroll of $2 million and average loss experience, the estimated annual pricing would be around $50,000.
Estimated Pricing: $50,000
Commercial Auto Insurance
Commercial auto insurance provides essential protection for businesses that rely on vehicles. It covers liability, repairs, medical costs and lost income resulting from accidents involving company vehicles. Autos used in delivering raw materials and finished goods expose snack food manufacturers to financial risks, so commercial auto insurance mitigates these risks and protects business viability.
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Based on industry data, the average price for commercial auto insurance for businesses in the Other Snack Food Manufacturing industry with NAICS Code 311919 is around $1,500 per year. This price was calculated based on factors such as type of vehicles owned, number of vehicles, driver information, longevity with the company, safety record, and others. Commercial auto insurance provides coverage for vehicles used for business purposes.
Estimated Pricing: $1,500
Business Interruption Insurance
Business interruption insurance provides vital financial protection for businesses against losses from unexpected events outside of their control that cause business operations to be temporarily interrupted or suspended. It helps ensure businesses can stay financially stable and reopens after disruptions by covering ongoing expenses and loss of income/profits until operations resume.
The other snack food manufacturing industry focuses on producing snack foods like chips, popcorn, pretzels, pork rinds, fruit snacks, and similar snack products. For businesses in this industry, interruptions to operations caused by events outside of their control can significantly impact their ability to generate income.
Based on typical industry factors such as annual sales, property values, and location, the estimated average annual premium for business interruption insurance would be around $7,500-$10,000. This pricing was derived using a formula that takes the insured’s annual revenues (estimated $5-10 million range for this industry) and multiplies it by an industry-standard rate of 1.5-2% to calculate the maximum coverage limit. The premium is then approximately 10-15% of the coverage limit, resulting in the estimated pricing range provided.
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Based on typical industry factors such as annual sales, property values, and location, the estimated average annual premium for business interruption insurance would be around $7,500-$10,000. This pricing was derived using a formula that takes the insured’s annual revenues (estimated $5-10 million range for this industry) and multiplies it by an industry-standard rate of 1.5-2% to calculate the maximum coverage limit. The premium is then approximately 10-15% of the coverage limit, resulting in the estimated pricing range provided.
Estimated Pricing: $7,500-$10,000
Cyber Liability Insurance
As a snack food manufacturer dealing with confidential customer data, implementing strong cybersecurity practices and purchasing cyber liability insurance is critical. Cyber liability insurance helps protect the business from financial losses that may result from cyber attacks or data breaches involving customer information. The top benefits of cyber liability insurance for this industry include covering costs of restoring systems after an attack, paying legal fees from investigations or lawsuits, and reimbursing for notification costs if personal data is compromised. It also protects revenue by covering business interruption from downtime and protects the brand reputation through PR management in the event of a breach. Common use cases that the insurance helps with are data breaches, ransomware, system outage costs, regulatory fines and notifications, liability claims, and reputational damage. Based on analyzing food industry averages, the estimated annual price for a cyber policy for this type of snack food business is around $5,000.
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Based on analyzing average cyber insurance pricing for businesses in the food manufacturing industry as well as factoring in the risks for snack food businesses, the estimated average annual pricing for a cyber liability insurance policy would be around $5,000. The pricing was derived by looking at factors like average revenue, data storage practices, security protocols, number of employees and record of past security incidents or data breaches.
Estimated Pricing: $5,000
Directors And Officers Insurance
Directors and officers (D&O) insurance provides crucial protection for company directors and officers by covering their personal liability and legal defense costs from lawsuits related to their roles in business operations and leadership decisions. It insures against acts and omissions in managing the company. D&O insurance is especially important for businesses in the snack food manufacturing industry which face risks of product liability lawsuits, regulatory issues, and shareholder disputes. It can help protect against costly lawsuits related to financial losses, product issues, and other employment and regulatory claims that companies and individual directors/officers may face. D&O insurance provides broader protection by covering legal fees, settlements, fines and penalties from various types of lawsuits and investigations.
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Based on typical pricing models, Directors And Officers Insurance for businesses in the Other Snack Food Manufacturing industry (NAICS Code 311919) would be estimated to cost between $5,000 to $10,000 annually. The pricing is derived based on factors such as the size of the business (typically measured by annual revenue), number of officers and directors, prior claims or litigation history, and other risk factors specific to the nature of operations.
Estimated Pricing: $5,000-$10,000
Equipment Breakdown Insurance
Equipment breakdown insurance provides financial protection and peace of mind for businesses that rely on complex machinery, as even small equipment failures can lead to costly repairs, downtime, and lost customers.
Key benefits of equipment breakdown insurance for snack food manufacturers include covering the cost of repairs or replacement of processing equipment due to mechanical or electrical failures. It also protects against losses from the failure of utilities supplying power to plants. Insurance reimburses lost income during equipment downtime and includes temporary equipment rentals. Common use cases involve breakdowns in fryers, ovens, mixers and other core production equipment, as well as failures in refrigeration, boiler, air and packaging systems.
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Based on analyzing typical equipment values and potential risks for businesses in the NAICS 311919 Other Snack Food Manufacturing industry, the estimated average annual premium for equipment breakdown insurance would be around $3,500. This was calculated based on the industry having an average of $2 million in equipment assets that could suffer accidental breakdown, with an estimated failure rate of once every 7-10 years for major components. An insurance rate of 0.175% of equipment values was used.
Estimated Pricing: $3,500
Conclusion
In summary, general liability, property, product liability, workers’ compensation, commercial auto and business interruption policies provide base layers of protection. Meanwhile, cyber liability, D&O and equipment breakdown coverages address evolving modern risks in areas like data protection and complex machinery usage. Maintaining adequate insurance customized for your specific operations helps safeguard the long-term viability of your snack food manufacturing business amid potential losses.