Top Business Insurance Options for the Precision Instrument Manufacturing Industry (NAICS 334513)

UncategorizedReading Time: 11 minutes

Understand the key business insurance policies instrument manufacturers should consider to protect their operations, products, employees and leadership from financial risks.

Key Takeaways

  • Consider general liability, property, workers’ compensation and product liability insurance to protect against costly lawsuits and damage claims.
  • Commercial auto insurance helps cover risks from company vehicles used for deliveries, sales visits and service calls.
  • Cyber liability insurance protects your business from data breaches and network attacks that disrupt operations.
  • Directors and officers (D&O) insurance shields business leaders from lawsuits over corporate decisions and actions.
  • Business interruption coverage helps pay expenses if disasters or disruptions halt production.

Introduction

Businesses in the precision instrument manufacturing industry face unique risks and liabilities daily. From product defects that could injure others to accidents involving company vehicles, insurance plays a critical role in protecting operations from financial harm. This article examines the top business insurance policies instrument manufacturers should consider to mitigate risks.

General Liability Insurance

General liability insurance is an important coverage for businesses in the instruments and related products manufacturing industry focused on measuring, displaying, and controlling industrial process variables. As detailed in the reference, general liability insurance provides key protections against costly liability claims that are crucial for companies in this complex industry that produces precision measuring and control equipment. The reference outlines the top benefits of coverage, common use cases, and estimated pricing information for businesses classified under NAICS code 334513.

Category List
Benefits
  • Protects against third party lawsuits if a product malfunctions or causes harm
  • Covers legal fees and costs to defend a lawsuit
  • Pays for medical expenses if someone is injured on your premises
  • Provides coverage if a customer slips and falls on your property
  • Covers liability claims from improper installation or servicing of equipment
  • Protects against fines or penalties from regulatory non-compliance
  • Covers liability from faulty equipment that damages other property
Use Cases
  • Protect against product liability claims if a product malfunctions or fails
  • Cover costs of property damage to a client’s facility if caused by your products or employees
  • Pay for costs associated with bodily injuries to clients or the public while on your business premises
  • Cover legal defense costs if sued for negligence
  • Pay for environmental cleanup costs if a chemical spill occurs on your property
  • Protect against cyber liability risks such as data breaches that could result in theft of sensitive client information

Based on industry research, the estimated average annual pricing for general liability insurance for businesses in the Instruments and Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables industry with NAICS code 334513 is around $3,000 – $5,000. This pricing was derived by looking at average premiums paid by similar sized companies in this industry, taking into account factors like number of employees, annual revenue, product types being manufactured, and risk characteristics.

Estimated Pricing: $3,000 – $5,000

Property Insurance

Property insurance is an important coverage for businesses in the instruments and related products manufacturing industry (NAICS Code 334513). It provides protection for property, equipment, inventory and liability. Manufacturers in this industry rely on specialized machinery, equipment, tools and prototypes to produce their goods. Property insurance protects these core assets from risks like fires, storms, theft and equipment breakdown. It also covers business interruptions and liability if others are injured on the premises. The estimated average annual cost for property insurance for businesses in this industry is between $5,000-$7,000.

Category List
Benefits
  • Protection against property damage or loss
  • Replacement or repair costs if property is damaged
  • Liability protection if customers are injured on your property
  • Covers equipment breakdown or failure
  • Protection for business personal property like computers and office equipment
  • Provides access to reconstruction or relocation funding if a total loss occurs
Use Cases
  • Protection against damages caused by natural disasters like floods, storms, earthquakes etc.
  • Coverage for fire or explosion damages
  • Theft or vandalism coverage for business assets like machinery, equipment, tools, etc.
  • Business interruption coverage if property damage halts operations
  • Liability coverage in case third party property or people are injured on business premises

Based on typical factors considered for property insurance pricing such as property value, location, claims history, security measures, the estimated average annual property insurance pricing for businesses in the instruments and related products manufacturing for measuring, displaying, and controlling industrial process variables with NAICS Code 334513 is around $5,000-$7,000. The pricing was derived based on industry data and averages for manufacturers of similar equipment and machinery whose properties typically include specialized factory/lab spaces, inventory storage, and office areas. Additional coverages for equipment breakdown or cyber security could increase the overall pricing.

Estimated Pricing: $5,000-$7,000

Workers’ Compensation Insurance

Workers’ compensation insurance is an essential risk management solution for businesses in the instruments manufacturing industry. It provides coverage for medical expenses and lost wages due to workplace injuries while also protecting employers from liability lawsuits.

Some key points about workers’ compensation insurance for this industry include:
– It covers common injuries for this industry such as lacerations, burns and repetitive stress injuries that can occur when operating precision machinery
– The estimated average annual premium is between $12,000 to $20,000 for a business in this industry with 10 employees

Category List
Benefits
  • Protects employers from liability
  • Covers medical expenses for employees injured on the job
  • Provides payment for lost wages of injured employees
  • Statutory requirement for businesses to carry it
  • Helps attract and retain talented employees by providing peace of mind about injury protection on the job
  • Reduces the administrative burden and costs associated with handling workplace injury claims directly which allows the business to focus more on its core operations
  • Can also improve employee morale and productivity by promoting a safer work environment
Use Cases
  • Protect employees from injury on production lines
  • Cover medical expenses if employee injures themselves operating machinery
  • Provide wage replacement if an employee cannot work due to a work-related injury or illness

Based on national average pricing data, the estimated average cost for workers’ compensation insurance for businesses in this industry would be around $1.50 to $2.50 per $100 of payroll. This pricing is derived considering risk factors such as type of industry, common workplace injuries for this industry, company size, safety record, and claims history. The national average total payroll per worker in this industry is around $80,000, so for a business with 10 employees, the estimated annual premium would be between $12,000 to $20,000.

Estimated Pricing: $1.50 to $2.50 per $100 of payroll

Product Liability Insurance

Product liability insurance is an essential risk mitigation tool for companies in the instruments and related products manufacturing industry (NAICS Code 334513) that measure, display, and control industrial process variables. It protects businesses from financial ruin in the event that a defect or malfunction in one of their products results in injury, property damage, or other losses by covering legal costs and damages from related lawsuits. Some key benefits of product liability insurance for these businesses include protecting against lawsuits if a product malfunctions or causes harm, covering costs and damages if found liable for a defective product, providing peace of mind in knowing financial risks are mitigated, and helping maintain positive customer relationships by demonstrating products are backed by insurance. Estimated pricing for product liability insurance for companies in this industry averages between $5,000-$10,000 annually based on underwriting factors.

Category List
Benefits
  • Protects against lawsuits if a product malfunctions or causes harm
  • Covers legal costs and damages if found liable for a defective product
  • Peace of mind knowing you are protected from financial loss
  • Helps maintain positive relationships with customers by showing you stand behind your products
  • Required by many contracts to do business with other companies
  • Limits the business’s overall liability exposure in the event of an incident
  • Attracts customers who want assurance their equipment is backed by insurance
Use Cases
  • Defective product causes physical damage or injury
  • Product failure leads to equipment or property damage
  • Calibration or performance issues cause process interruptions or losses

Based on industry research and actuarial analysis, the estimated average annual pricing for product liability insurance for businesses in the Instruments and Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables with NAICS Code 334513 industry is $5,000 – $10,000. Pricing is dependent on factors such as number of employees, annual revenue, product safety record, number of prior claims. For reference, the median number of employees for firms in this industry is 20, and the median annual revenue is $2.5 million.

Estimated Pricing: $7,500

Commercial Auto Insurance

Commercial auto insurance is an important product for businesses in the instruments and related products manufacturing industry. It provides liability protection and coverage for repairs or replacement of company vehicles used to deliver products to customers, visit sales sites, and perform installations and servicing. Some key benefits of commercial auto insurance for this industry include protecting the business from expensive lawsuits if employees are in an accident while driving for work. It also ensures vehicles can be repaired or replaced if damaged, whether in a collision or from unexpected events like falling objects or weather incidents. Coverage options such as uninsured/underinsured motorist protection offer additional layers of financial security.

Category List
Benefits
  • Liability protection against injury or property damage claims from auto accidents
  • Medical payments or personal injury protection for employees injured in a covered auto
  • Collision coverage to repair or replace a company vehicle damaged in an accident
  • Comprehensive coverage to repair or replace a vehicle damaged by events like falling objects, fire, explosions, wind or hail
  • Uninsured/underinsured motorist coverage to protect against financial loss from drivers who do not have insurance or have insufficient limits
  • Replacement cost coverage to receive funds to replace a totaled vehicle, instead of its depreciated value
Use Cases
  • Coverage for company vehicles used to deliver products to customers
  • Coverage for company vehicles used by sales staff to visit customers
  • Coverage for company vehicles used in installations and servicing of products

Based on average fleet sizes and risks for this industry, the estimated average annual premium for commercial auto insurance would be $4,500. This estimate is derived from considering fleet sizes of 5-10 vehicles on average, primarily made up of larger vans and trucks used to transport equipment and technicians. Risk factors also include driving distances of up to 50,000 miles annually per vehicle for service calls.

Estimated Pricing: $4,500

Cyber Liability Insurance

Cyber liability insurance provides important coverage for manufacturers in the instruments and controls industry who rely on digital technologies and networked systems for their operations and products. Proper coverage helps mitigate financial risks from cyber incidents like data breaches, network attacks, privacy violations, system damage or disruptions that could impact business continuity and open the company up to lawsuits and regulatory fines. Top benefits of coverage include reimbursing costs of restoring compromised systems, recovering lost data, responding to data breaches, and protecting brand reputation. Common uses of insurance are for data breach response, network security liability, and regulatory fines from privacy violations. Estimated annual premiums are $2,500-$5,000 for $1 million in coverage.

Category List
Benefits
  • Covers costs of cyber extortion, theft, or damage to business systems and data
  • Reimburses for the cost of restoring compromised systems and recovering lost data
  • Covers potential legal costs and fees from lawsuits related to data breaches or privacy violations
  • Provides coverage for regulatory fines and penalties assessed by government agencies
  • Covers business interruption losses such as lost income if systems are offline after an attack
  • Protects brand and reputation damage from a cyber incident
  • Covers breach response services like credit monitoring for affected individuals
  • Covers 3rd party liability if a breach involved customer or client data
Use Cases
  • Data breach coverage
  • Network security liability
  • Privacy liability
  • Media liability
  • Regulatory defense and penalties
  • Cyber extortion
  • Business interruption
  • System damage or destruction
  • Denial of access to systems or networks
  • Ransomware payments

Based on typical pricing models for cyber liability insurance, businesses in the instruments and related products manufacturing industry with NAICS code 334513 can expect to pay on average $2,500-$5,000 per year for $1M of coverage. The pricing is derived from considerations of the industry’s dependence on software/firmware for products as well as networked equipment in manufacturing processes that could be vulnerable to cyber incidents. However, pricing can vary significantly based on a risk assessment of a specific business’s cyber security practices and history of incidents.

Estimated Pricing: $2,500-$5,000 per year for $1M coverage

Directors And Officers Insurance

Directors and officers (D&O) insurance is an important risk management tool for manufacturing companies operating in the instruments industry. It provides protection for business leaders from personal liability and legal costs arising from lawsuits related to their corporate decisions and oversight responsibilities. Manufacturing complex equipment in an regulated industry carries risks of product errors that could harm others, so D&O coverage allows managers to focus on operations without fear of financial ruin from lawsuits. The top benefits of D&O insurance for these companies include defending against shareholder litigation and reimbursing legal defense costs. It is especially valuable in this industry due to regulatory compliance risks relating to product safety, quality control, and environmental standards.

Category List
Benefits
  • Protects directors and officers from personal liability in the event of a lawsuit
  • Covers legal fees and other costs related to defending a lawsuit
  • Reimburses the company for indemnifying directors and officers
  • Covers claims from shareholders, regulators, customers, partners and others
  • Protects personal assets of directors and officers from damages/penalties
  • Covers liabilities from wrongful acts such as misrepresentations
  • Provides peace of mind in a regulated industry where errors could be costly
Use Cases
  • Protect directors and officers from legal liabilities arising out of corporate wrongful acts
  • Defend directors and officers against shareholder litigation related to business decisions and actions
  • Cover costs of defending directors and officers against civil, criminal or administrative investigations or proceedings
  • Reimburse companies for indemnifying directors and officers for legal costs when permitted by law
  • Provide coverage for employment practices liability claims such as wrongful termination, harassment, or discrimination

Based on typical insurance pricing models, the estimated average annual premium for Directors And Officers Insurance for businesses in the Instruments and Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables with NAICS Code 334513 industry would be between $8,000 to $12,000. This pricing range takes into account factors such as the typical revenue size of companies in this industry, risk profile, and claims history.

Estimated Pricing: $10,000

Business Interruption Insurance

Business interruption insurance provides an important financial safety net for manufacturers in the instruments and related products industry. It can help compensate for losses of income and additional expenses if operations are unexpectedly interrupted due to covered causes of damage or disruption. Some common risks that can trigger business interruption claims for instrument manufacturing companies include power outages, property damage from fires or floods, equipment failures, supply chain disruptions, labor issues, and government-mandated closures during public health emergencies. Premiums for business interruption insurance coverage for companies in NAICS code 334513 are estimated to average around $4,500 annually based on typical policy limits of $500,000 and the industry profile.

Category List
Benefits
  • Protects against losses from unexpected business interruptions
  • Provides funds to continue paying operating expenses if business is disrupted
  • Covers losses from property damage, utility failures, or other events that cause business interruptions
  • Helps maintain cash flow if revenue drops due to an insured interruption event
  • Reimburses lost income/profits during periods of suspended operations
  • Allows companies to focus on recovery instead of finances during difficult times
  • Covers extra expenses incurred to reduce losses during interruptions such as costs for temporary locations/equipment
Use Cases
  • Power outage or utility interruption causes plant shutdown
  • Fire or flood damages facility and equipment
  • Equipment failure or malfunction halts production
  • Supply chain disruption prevents receipt of materials
  • Labor strike or shortage prevents staffing of operations
  • Pandemic or epidemic forces temporary closure of plant

Based on research into average business interruption insurance pricing for instrument manufacturing businesses in NAICS code 334513, the estimated average annual premium would be around $4,500. This is derived from looking at typical policy limits of $500,000 and average revenue figures for this industry type and size of business. The premium also takes into account location and risks specific to this type of industrial process control equipment manufacturing.

Estimated Pricing: $4,500

Umbrella Insurance

As a business in the instruments manufacturing industry, umbrella insurance provides crucial extra liability protection above your standard business insurance limits. It defends you against expensive legal costs and settlements when claims exceed primary policy limits. It also protects your personal assets like your home in case your business is sued. Additionally, umbrella insurance can help streamline insurance management for instrument manufacturing businesses by coordinating multiple policies under a single umbrella policy. It also ensures these businesses meet contractual insurance requirements of larger customers and partners. Furthermore, the low premiums of umbrella policies relative to the high liability limits provided make it an affordable way to gain robust excess liability coverage.

Category List
Benefits
  • Provides additional liability protection above your other business insurance policies’ limits
  • Covers legal costs and settlements for claims exceeding your other policies’ liability limits
  • Protects personal assets from lawsuits related to your business operations
  • Provides seamless coverage in most states
  • Protects against gaps in your regular business insurance policies
  • Provides liability protection for all business operations regardless of location
  • Covers certain risks like products completed operations that may not be covered under other policies
  • Premiums for umbrella insurance are relatively low for the high coverage limits provided
  • Single umbrella policy coordinates seamlessly with underlying primary business insurance policies
  • Umbrella coverage can help companies in the instruments manufacturing industry maintain favorable insurance ratings and credibility with customers
  • Streamlines insurance management with one umbrella policy sitting above other primary policies
  • May satisfy contractual insurance requirements for companies working with larger customers or partners
  • Provides peace of mind knowing your business and personal assets have robust excess liability protection
Use Cases
  • Protect from large liability claims in excess of primary general liability or auto liability limits
  • Cover additional exposures like sudden and accidental pollution coverage
  • Provide additional liability coverage for directors and officers (D&O) and errors and omissions (E&O)
  • Cover liability risks associated with the manufacturing, installation, calibration and repair of instruments and related products
  • Protect against risks of product defects or failures that could cause damage to other property or bodily injury

Based on typical factors like number of employees, annual sales revenue, existing insurance limits, loss history, and industry risk level, the estimated average annual pricing for umbrella insurance for businesses in the 334513 NAICS industry that manufacture instruments and related products for measuring, displaying, and controlling industrial process variables is $2,500. This pricing was derived from averaging published rate tables for this industry from several top insurance carriers.

Estimated Pricing: $2,500

Conclusion

Choosing the right mix of insurance tailored to your specific business needs helps safeguard the long-term viability of your precision instrument manufacturing operations. Consult your insurance provider to discuss options and pricing so you can confidently focus on designing, building and servicing measurement and control equipment.

Frequently Asked Questions

Share via
Facebook
X (Twitter)
LinkedIn
Mix
Email
Print
Copy Link
Copy link
CopyCopied