Top Business Insurance Options for Ship Building and Repair Companies (NAICS 336611)

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Learn about the key insurance types ship builders and repairers should consider like general liability, property, workers' comp, commercial auto and more to protect their business.

Key Takeaways

  • General liability insurance protects against costly lawsuits from injuries and property damage claims
  • Property insurance covers rebuilding costs if facilities are damaged by disasters like fires or storms
  • Workers compensation insurance pays medical bills and lost wages if employees are hurt on the job
  • Commercial auto insurance provides liability coverage for company vehicles used to transport crews and materials
  • Umbrella insurance increases liability limits and coverage for risks not addressed by underlying policies
  • Marine policies cover risks specific to shipyards like defective repairs causing damage or pollution incidents

Introduction

As a ship building or repair business, you face various risks on a daily basis due to the hazardous nature of construction and maintenance work on vessels. Maintaining proper insurance coverage helps protect your company financially from costly claims and lawsuits. This article outlines the key types of insurance ship builders should consider to safeguard their operations and bottom line.

General Liability Insurance

General liability insurance is an important type of coverage for businesses in the ship building and repairing industry (NAICS 336611) to protect against costly legal claims and lawsuits. General liability insurance provides coverage for a variety of risks these businesses face, such as injuries to workers and visitors on their premises, damage to customer’s vessels while under repair, pollution events from operations, and legal liability from faulty repairs or modifications. It ensures claims from incidents at facilities or during operations are paid for. Based on average rates, the estimated annual cost for general liability insurance would be around $3,000-$5,000.

Category List
Benefits
  • Protects against third party claims of bodily injury or property damage
  • Covers lawsuits from accidents that occur on your worksite or during operations
  • Pays for legal defense costs if you’re sued
  • Provides coverage for incidents involving subcontractors
  • Covers premises liability for incidents on your property
  • Protects against pollution claims from releases during operations
  • Covers product liability claims if a defect causes damage or injury
Use Cases
  • Cover lawsuits and claims arising from injuries to shipyard workers
  • Cover lawsuits and claims arising from injuries to customers and visitors at shipyard facilities
  • Cover lawsuits arising from damage to customer’s ships while under repair or modification at shipyard facilities
  • Cover lawsuits arising from pollution events arising from shipyard operations
  • Cover lawsuits arising from damage or destruction to other ships or property while ships are being repaired or modified
  • Cover lawsuits arising from faulty repairs or modifications leading to safety issues on customer’s vessels

Based on average rates for businesses in the ship building and repairing industry (NAICS 336611), the estimated annual cost for general liability insurance would be around $3,000-$5,000. Rates are calculated based on various risk factors such as number of employees, annual revenue/sales, types of activities performed, safety record/claims history, and geographic location.

Estimated Pricing: $3,000-$5,000

Property Insurance

Property insurance provides financial protection for shipbuilding and repair businesses against unexpected losses and damage to their facilities, equipment, vessels and other property assets. It ensures operations can continue after a covered incident and protects the significant investment in properties and machinery essential for this industry.

Some key benefits of property insurance for these businesses include covering costs to repair or rebuild damaged properties, reimbursing for damaged equipment or property during worksite accidents, and replacing damaged assets to keep operations running smoothly after an insured loss. Coverage for equipment breakdown, materials awaiting installation, debris removal after a claim, and protection from disasters like fires or storms further support business continuity.

Category List
Benefits
  • Covers loss or damage to property and equipment from hazards like fire, wind damage, hail, explosions etc.
  • Covers costs to repair or rebuild properties after accidental damage
  • Covers loss of income and expenses if operations are suspended due to covered damage
  • Covers equipment breakdown like damage to boilers, pressure vessels or electrical systems
  • Provides coverage for materials and supplies awaiting installation
  • Covers debris removal costs after covered losses
Use Cases
  • Protection against loss or damage of facilities and equipment from disasters like fires, storms and explosions
  • Coverage for buildings, machinery, tools and equipment from theft or vandalism
  • Reimbursement for property damaged in an accident on the work site
  • Replacement value coverage to fully repair or rebuild properties after a loss
  • Equipment breakdown coverage for boilers, engines and other mechanical systems
  • Ordinance or law coverage to pay for upgrading undamaged portions of properties to comply with current codes after a loss

Based on typical pricing rates, the average annual cost of property insurance for businesses in the ship building and repairing industry (NAICS 336611) would be around $5-7 per $100 of insured assets. This rate takes into account the higher risks associated with this type of industrial activity, including risks of fire or other incidents causing property damage during ship construction or repair processes. The final price would depend on factors like total insured assets, loss history, safety practices, and risk mitigation measures in place.

Estimated Pricing: $5-7/$100 of insured assets

Workers Compensation Insurance

Workers compensation insurance provides critical financial protection for employees and employers in hazardous industries such as ship building and repairing. It ensures employees receive medical treatment and compensation if injured on the job while also protecting businesses from costly liability lawsuits. Maintaining coverage is mandatory by law and helps reduce replacement costs from workplace accidents. Policies for this industry address injury risks from operating heavy machinery, falls, and chemical exposures.

Category List
Benefits
  • Covers medical expenses for injured employees
  • Covers part of lost wages for injured employees
  • Covers rehabilitation costs for injured employees’ return to work
  • Protects the business from liability lawsuits from employees’
  • Required by law in all states for businesses with employees
  • Reduces turnover and hiring/training costs from workplace injuries
  • Coverage tailored specifically for hazardous ship building/repairing work
Use Cases
  • Covering employees who get injured on the job while working with heavy machinery and equipment.
  • Providing benefits to employees who suffer long-term injuries or disabilities from accidents.
  • Paying medical expenses and lost wages for employees hurt in workplace accidents.
  • Covering liability if an employee is injured due to unsafe or hazardous work conditions.
  • Protecting the company from expensive lawsuits if an employee is severely injured and allegs negligence.

Workers compensation insurance pricing for businesses in the ship building and repairing industry (NAICS 336611) is typically high due to the hazardous nature of the work. Based on industry data and averages, the estimated annual pricing for workers compensation insurance for a typical ship building and repairing business with 50 employees would be around $150,000. This price was calculated based on the business’ payroll, premium rates that consider risk factors for this industry such as injuries from heavy equipment, falling, and chemical/hazardous materials exposure.

Estimated Pricing: $150,000

Commercial Auto Insurance

“Commercial auto insurance is an essential coverage for ship building and repair businesses. It provides important liability protection and physical damage coverage for company vehicles used to transport workers, equipment, parts and materials between job sites. In addition, it offers medical payments coverage for passengers and pedestrians injured in accidents involving commercial vehicles. For ship building companies that rely on transportation between different worksites, commercial auto insurance ensures operations can continue even if vehicles need repairs.”

Category List
Benefits
  • Liability protection in case of accidents
  • Physical damage coverage for company vehicles
  • Medical payments coverage for passengers and pedestrians injured in an accident
  • Coverage for hired and non-owned vehicles
  • Reimbursement for loss of income if vehicles are in the repair shop
  • Coverage for transportation of parts and materials between job sites
Use Cases
  • Covering owned business vehicles like trucks used to transport supplies and materials
  • Covering non-owned vehicles like employees’ personal vehicles used for business purposes with permission
  • Covering hired/rented vehicles like temporary trucks used during peak seasons
  • Covering company vehicles used to transport workers between worksites

Based on industry data and risk factors, the estimated average annual pricing for commercial auto insurance for businesses in the ship building and repairing industry (NAICS 336611) would be around $2,500-$3,500 per vehicle. Rates are calculated based on number of vehicles, drivers, years in business, loss history, garage locations, and other underwriting factors. Material handling equipment like forklifts and cranes used onsite would be included.

Estimated Pricing: $2,500-$3,500

Commercial Umbrella Insurance

As a business operating in the ship building and repairing industry, commercial umbrella insurance provides valuable protection against large liability claims above your standard insurance limits. It acts as an important safety net for risks inherent to this hazardous field like workplace injuries, defective work, pollution incidents, and more. Commercial umbrella insurance also protects personal assets, covers legal costs, and ensures adequate protection for issues arising after jobs are completed. Umbrella insurance is especially important for ship building businesses due to the risks of heavy equipment, machinery, and hazardous work activities involved.

Category List
Benefits
  • Provides additional liability coverage above your commercial general liability and auto insurance limits
  • Covers negligent acts and omissions that are excluded under your general liability policy
  • Protects personal assets from lawsuits in case the business is sued
  • Covers contractual liability your business assumes in agreements with clients or vendors
  • Affords coverage for claims involving employment practices, discrimination or wrongful termination
  • Provides higher liability limits to protect against large claims resulting from accidents in the shipyard or during repairs
  • Covers legal costs and fees if your business is involved in litigation over claims, reducing out-of-pocket legal expenses
  • Protects against liability claims from injuries to contractors, subcontractors or other third parties working on locations
  • Insures the business for completed operations liability for issues that may arise after a ship is delivered to a client
  • Insures against pollution and environmental impairment liability from accidents or incidents involving hazardous materials used in construction and repair processes
  • Covers your business for general tort or civil liability claims not specifically addressed by other insurance policies you carry
Use Cases
  • To protect the business from large liability claims that exceed the limits of the underlying commercial general liability (CGL) policy
  • To protect business owners and managers from personal liability claims arising from their roles and responsibilities with the company
  • To provide additional liability coverage for on-the-job injuries and workplace accidents not covered by workers’ compensation
  • To protect the business from lawsuits resulting from defective workmanship or product failures related to the ships and vessels repaired or constructed
  • To protect the business from environmental pollution liability arising from spill or discharge of chemicals and fuels during ship repair operations

Based on analysis of loss data and industry factors, the estimated average annual premium for $1M of commercial umbrella insurance coverage for businesses in the ship building and repairing industry (NAICS 336611) would be $4,500. This pricing takes into account factors like the risks associated with heavy machinery, high limits policies, welding risks and overall hazards of the shipyard environment.

Estimated Pricing: $4,500

Marine General Liability Insurance

Marine general liability insurance protects ship building and repair companies from financial risks. It covers costs from lawsuits and claims related to operations, defective work, accidents and more. The policy provides benefits such as coverage for injuries on premises, property damage claims, legal costs if sued, faulty workmanship resulting in property damage, and pollution incidents. It is commonly used to insure against liability from risks involved in day-to-day operations, defective workmanship, pollution events, sea trial accidents, transportation incidents, and breach of contract claims. Estimated annual pricing for a mid-sized company in the industry is around $18,000 based on their revenue, employees and loss history.

Category List
Benefits
  • Covers liability claims from injuries that occur on your premises or during operations
  • Protects against property damage claims from accidents, like fires or equipment malfunctions
  • Defends and pays legal costs if you’re sued by a customer or third party for damages or injuries
  • Provides coverage if your faulty workmanship results in property damage to a vessel you worked on
  • Covers liability claims from faulty or defective parts you supplied for repairs
  • Covers medical costs if an employee is injured on the job
  • Pays damages if your completed work causes a loss of use for the vessel owner
  • Insures against pollution claims from accidents involving fuels, oils or other hazardous materials
  • Provides coverage for cyber liability claims such as data breaches
  • Insures the transportation of parts, tools and vessels for repairs or upgrades
  • Protects against liability from faulty designs or plans for new ship construction
Use Cases
  • Protect against bodily injury or property damage claims from shipbuilding and repairing operations
  • Cover liability claims from defective workmanship or faulty repair jobs
  • Insure against pollution events and environmental damages from operations
  • Provide coverage for accidents that occur during sea trials after new ship construction or major repairs
  • Cover lawsuits from incidents that occur during transportation of ships and vessels to and from the shipyard
  • Defend legal claims related to breach of contractual agreements for shipbuilding and repairs

Based on market data and actuarial analysis, the estimated average annual pricing for Marine General Liability Insurance for businesses in the Ship Building and Repairing industry (NAICS Code 336611) is $15,000-$25,000. The pricing is highly dependent on factors like annual revenue, number of employees, loss history, location. For a mid-sized company in this industry with $10M annual revenue, 50 employees and no major losses in past 5 years, the estimated annual pricing would be around $18,000.

Estimated Pricing: $18,000

Marine Protection And Indemnity (P&I) Insurance

Marine P&I insurance provides important liability coverage and protections for ship building and repairing businesses. It shields these operations from significant costs of lawsuits, damages, and other risks that commonly occur in their industry. Some key coverage includes pollution liability, cargo liability, wreck removal costs, legal defense against third party claims. Pricing is estimated around $12,000-$15,000 annually depending on company size and risk factors. Marine P&I insurance is a crucial risk management solution for these businesses due to the high risks involved in their vessel operations and maintenance activities.

Category List
Benefits
  • Liability coverage for injuries or damage to third parties
  • Legal costs coverage for defending against third party claims
  • Wreck removal coverage
  • Pollution liability coverage
  • Cargo liability coverage
Use Cases
  • Cover third-party liabilities such as injury or death of crew, passengers, stevedores or other persons on or near the vessel
  • Provide coverage for pollution caused by accidental discharge or escape of oil or other substances from the insured vessel
  • Cover liability for damage caused by collisions with other vessels or property
  • Cover costs of wreck removal in the event that a vessel becomes a wreck
  • Cover stowaways, refugees and persons rescued at sea on board the vessels
  • Cover liability related to cargo loss or damage during loading, carrying or unloading operations

Based on typical industry rates, the estimated average annual pricing for Marine P&I Insurance for ship building and repairing businesses with NAICS code 336611 is around $12,000-$15,000 per year. This price is derived based on factors such as the company’s annual revenue, number of employees, types of ships built/repaired, safety record, etc. Larger and higher risk companies may see higher rates while smaller lower risk operations can find prices on the lower end of the range.

Estimated Pricing: $12,000-$15,000

Conclusion

In summary, general liability, property, workers comp, commercial auto, umbrella and marine policies provide layered protection against different risks shipyards commonly face. Maintaining adequate coverage with reputable insurers helps ensure your business can continue operating smoothly even after accidents, natural disasters or other unforeseen incidents covered by the policies.

Frequently Asked Questions

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