Key Takeaways
- General liability insurance protects against product liability, bodily injury, and property damage claims
- Property insurance covers losses from fire, equipment breakdown, theft and natural disasters
- Workers’ compensation insurance covers medical expenses and lost wages from work-related injuries
- Commercial auto insurance protects against liabilities if a company vehicle is involved in an accident
- Business interruption insurance protects income if factory operations are disrupted
- Product liability insurance covers legal defense costs and claims from defective products
- Cyber liability insurance protects against network attacks, ransomware and data breaches
- Equipment breakdown insurance covers repair costs from machinery breakdown
- Directors and officers insurance protects leadership from lawsuits related to business decisions
Introduction
As a manufacturer in the plastics industry, it is important to protect your business with the proper insurance coverage. Plastics production involves risks from machinery, chemicals, vehicles, product defects and more. This guide outlines the top business insurance options plastic manufacturers should consider to ensure operations can continue smoothly despite accidents, lawsuits or other unexpected events.
General Liability Insurance
General liability insurance provides important protection for plastics product manufacturing businesses against costly claims and lawsuits that could threaten their operations. It covers incidents involving bodily injury, property damage, product defects and other liability exposures that are common risks for companies in this industry. Coverages also include legal defense costs if sued for liability claims as well as pollution and environmental accidents which can pose significant risks for manufacturing facilities. Pricing is typically around $5,000 annually on average for businesses in this industry.
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Based on industry data, the average annual pricing for general liability insurance for businesses in the plastics product manufacturing industry with NAICS code 3261 is around $4,000 – $6,000 per year. This pricing is derived based on factors like company size, number of employees, total revenue/sales, risk profile, loss history, and safety practices. Larger companies with more employees and higher revenue/sales tend to pay more whereas smaller companies pay less on average.
Estimated Pricing: $5,000
Property Insurance
Property insurance is an essential risk management tool for plastics product manufacturers. It can help protect a business from financial losses to property, equipment, inventory, and lost income from incidents like fires, storms or equipment breakdowns. The reference provides details on the top benefits of property insurance, common use cases, and estimated pricing for businesses in the plastics product manufacturing industry. Property insurance can cover costs of repairing or rebuilding damaged facilities and replace lost assets, protecting the significant financial investments of plastics manufacturers.
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Based on industry averages, the estimated annual pricing for property insurance for businesses in the plastics product manufacturing industry (NAICS Code: 3261) is around $4-6 per $100 of insured assets. This pricing is derived from factors such as the industry’s risk profile, average claim sizes, loss histories, and locations of manufacturing facilities. Property insurance covers losses from fire, wind damage, water damage and other common disasters to help protect a business’s buildings, equipment, and inventory.
Estimated Pricing: $4-6 per $100 of insured assets
Workers’ Compensation Insurance
Workers’ compensation insurance provides important protections for employees and employers in hazardous industries like plastics product manufacturing. It covers medical expenses and lost wages for work-related injuries while reducing businesses’ liability risks.
Manufacturing plastic products involves risks from machinery, chemicals, heavy lifting and other hazards that could result in on-the-job injuries. Workers’ comp ensures proper medical care and financial support for hurt employees. It also improves morale and lowers costs compared to uninsured losses from accidents.
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Based on national average pricing data, the estimated average pricing for workers’ compensation insurance for businesses in the Plastics Product Manufacturing industry (NAICS Code: 3261) is around $2.50 per $100 of payroll. This price was calculated based on risk factors such as the type of manufacturing, number of employees, losses over the past 5 years, OSHA recordable incidents, and the company’s safety programs and protocols.
Estimated Pricing: $2.50 per $100 of payroll
Commercial Auto Insurance
Commercial auto insurance is critical protection for plastics manufacturers who rely on company vehicles for transporting materials, products, tools and employees. It offers essential liability protection and coverage for vehicle repairs in the event of accidents. Aside from covering legal costs and medical payments if accidents occur, commercial auto policies also provide coverage if vehicles are damaged by events like theft, weather or if they are totaled in accidents exceeding their value. Businesses in the plastics manufacturing industry can also take advantage of fleet discounts when insuring multiple vehicles under one policy.
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Based on national averages, the estimated average annual price for commercial auto insurance for businesses in the plastics product manufacturing industry with NAICS code 3261 is $1,500 per vehicle. This estimate is derived from insurance rate filings and considers factors like average claims rates within the industry which tends to be slightly higher risk than other manufacturing due to transporting of plastic resins and products.
Estimated Pricing: $1,500
Business Interruption Insurance
Business interruption insurance provides coverage to help businesses continue operating and maintain cash flow if their normal business activities are disrupted due to insurable events like property damage, equipment breakdown or loss of utility outages. It protects against income losses that occur during periods when a company’s operations are suspended. This type of coverage is especially important for manufacturing businesses in the plastics industry since disruptions could significantly impact revenue and cash flow. Events like fire or natural disasters, machinery breakdown, utility outages, issues with suppliers, employee illness or injuries, and regulatory shutdowns are common use cases where business interruption insurance pays out to help businesses weather the losses until they can resume operations. Pricing for business interruption insurance is estimated around 0.5-1% of total annual revenue for plastics manufacturers, which could be $15,000 to $50,000 annually based on typical revenue scales in the industry.
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Based on average analysis of revenue, operating expenses and profit margins of businesses in the plastics product manufacturing industry (NAICS Code: 3261), the estimated pricing for basic business interruption insurance would be around 0.5-1% of the total annual revenue. This pricing was derived considering average revenue of around $3-5 million annually for businesses in this industry, with average operating expenses covering around 70-80% of revenue and average profit margins of 10-15% of revenue.
Estimated Pricing: $15,000-50,000 annually
Product Liability Insurance
Product liability insurance provides important protections for businesses in the plastics manufacturing industry. It covers costs associated with injuries, defects, recalls and lawsuits that could potentially bankrupt a company without this coverage in place.
This coverage helps protect manufacturers in NAICS code 3261, which involves the production of plastic bags, bottles, containers and other packaging products that could pose risks if defects occur. Pricing for this insurance averages around $1.50-$2.00 per $100 of revenue, with larger manufacturers seeing slightly lower rates.
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Based on typical pricing for product liability insurance in the plastics manufacturing industry, the average estimated price would be around $1.50 to $2.00 per $100 of revenue. This price was derived from insurance rate data and analytics specifically for NAICS 3261 businesses that manufacture plastic products like bags, boxes, buckets, and food packaging. Larger manufacturers with more than $10 million in annual revenue can expect prices closer to $1.50 per $100, while smaller manufacturers under $5 million annual revenue are more likely to see pricing of $1.75 to $2.00 per $100 of revenue.
Estimated Pricing: $1.50 – $2.00 per $100 of revenue
Cyber Liability Insurance
As a manufacturer in the plastics product industry, your business faces growing risks from cyber threats that can result in costly data breaches, system disruptions, and legal issues. Cyber liability insurance provides important protection for your company by covering costs associated with network downtime, ransom payments, notification obligations, investigations, lawsuits, and other unforeseen expenses after a cyber event. It also protects against lawsuits arising from data breaches or cyber attacks, covers costs to fix vulnerabilities and notify customers of breaches, pays for crisis management and legal services in the event of a breach, and more as described in the references.
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Based on analyzing typical policy pricing for small to medium sized businesses in the plastics product manufacturing industry with NAICS code 3261, the estimated average annual premium would be around $3,000. This pricing was derived considering average revenue size of around $10 million, number of employees between 50-100, and having basic cybersecurity measures and protocols in place. The pricing could vary higher or lower depending on specific risk factors, loss history, and additional policy details/coverage selected.
Estimated Pricing: $3,000
Equipment Breakdown Insurance
Equipment breakdown insurance provides crucial protection for plastic product manufacturers against unexpected failure of machinery. As plastics product manufacturers rely heavily on complex and expensive plastic processing equipment, equipment breakdown presents significant financial risks if failure occurs. Equipment breakdown insurance can help offset repair costs and loss of business income from disruptions, allowing businesses to continue operating smoothly. The key benefits, common failure risks for equipment types, and estimated average annual pricing are also outlined to summarize the value and costs of coverage.
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Based on average data for businesses in the plastics product manufacturing industry (NAICS 3261), the estimated annual pricing for equipment breakdown insurance would be around $1.50 per $100 of equipment value. This price was derived from typical rates that equipment breakdown insurance carriers charge manufacturers based on factors like the type of equipment, age of facility, loss history, and compliance with loss control recommendations.
Estimated Pricing: $1.50/$100
Directors And Officers Insurance
Directors and officers (D&O) insurance provides important protections for leadership of companies against the legal costs and damages that can arise from lawsuits related to their roles and responsibilities. It covers claims made against directors and officers for alleged wrongful acts, errors, omissions, breaches of duty, and other mismanagement. For companies in the plastics product manufacturing industry, D&O insurance is especially important due to regulatory compliance and product liability risks.
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Based on research of typical pricing of D&O insurance for small to mid-sized businesses in the plastics product manufacturing industry, the estimated average annual premium is around $5,000-$10,000. This pricing range was derived from getting quotes from multiple insurance providers for a business in this industry with 10-50 employees and $5-10 million in annual revenue.
Estimated Pricing: $5,000-$10,000
Conclusion
In summary, general liability, property, workers’ compensation, commercial auto, product liability, cyber liability, equipment breakdown, business interruption and directors & officers insurance provide layered protection for plastics manufacturers. Carefully selecting the appropriate coverage amounts and limits helps protect a company financially and allows it to better serve customers through disruptions. Maintaining proper coverage also gives leadership peace of mind to focus on core operations.