Key Takeaways
- General liability insurance protects against lawsuits from injuries on your property or defective products
- Property insurance rebuilds facilities and replaces damaged inventory after losses
- Worker’s compensation covers medical costs and lost wages for injured employees
- Product liability protects finances if an adhesive causes damage, injuries or recalls
- Commercial auto covers vehicles used for transporting goods and employees on the job
- Umbrella policy provides additional liability protection above standard limits
- Business interruption funds continue paying expenses if interruptions halt operations
- Cyber liability insurance covers costs of data breaches, disruptions and ransomware attacks
Introduction
Adhesive manufacturing involves significant risks that businesses need protection from through comprehensive insurance coverage. This article outlines the top policies adhesive manufacturers should consider to mitigate threats to their operations, assets, employees, and finances.
General Liability Insurance
General liability insurance is an essential risk management tool for businesses in the adhesive manufacturing industry. It protects against a variety of risks related to manufacturing chemicals and products, injuries onsite, and the threats of costly lawsuits. As an adhesive manufacturing business faces daily risks of liability due to the hazards inherent in making chemicals and adhesives, general liability insurance provides essential financial protection against lawsuits and claims that could threaten the viability of the business. It is a smart investment to have this coverage in place.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on the typical risk factors for this industry, which include chemical exposures and risks of flammability, an average pricing for general liability insurance would be in the range of $5 to $10 per $1,000 of payroll. Using the industry average annual payroll per employee of around $70,000, a company with 20 employees could expect to pay around $7,000 to $14,000 annually for their general liability policy.
Estimated Pricing: $7,000 to $14,000
Property Insurance
Property insurance provides important financial protection for adhesive manufacturing businesses against property damage and business interruption losses. It can help cover rebuilding costs, replace damaged inventory and equipment, and continue paying employees if a loss occurs.
Below are key details on the benefits, uses cases and estimated pricing of property insurance for adhesive manufacturing businesses:
The top benefits of property insurance include protection against fire damage, coverage for equipment breakdown, replacement cost coverage for buildings and equipment, business interruption or extra expense coverage if operations are disrupted, coverage for property in transit or off-premises, and coverage for valuable papers and records.
Common use cases of property insurance include protection against damage or destruction to company buildings and equipment from events like fire, explosion, vandalism or natural disasters, reimbursement for loss of income if the business has to temporarily shut down operations due to a covered property damage event, coverage for contents inside buildings like office furniture, computer equipment, raw materials and finished goods inventory, protection of specialized manufacturing equipment that would be costly to repair or replace, and coverage for spoilage of raw materials or finished goods if manufacturing equipment breaks down.
The estimated average annual property insurance premium for adhesive manufacturing businesses is $12,000, based on factors like the types of equipment and hazards involved in adhesive manufacturing processes, average property values, loss history data, and location.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on our analysis of insurance rates for the adhesive manufacturing industry (NAICS code 325520), the estimated average annual property insurance premium is $12,000. This price was calculated based on factors such as the types of equipment and hazards involved in adhesive manufacturing processes, average property values, loss history data, and location.
Estimated Pricing: $12,000
Worker’S Compensation Insurance
Worker’s compensation insurance provides essential coverage for employees and employers in high-risk industries like adhesive manufacturing. It helps ensure businesses comply with regulations while supporting injured workers with medical costs and lost wages from work-related accidents. Some key benefits of worker’s compensation insurance for adhesive manufacturers include covering medical expenses, lost wages, permanent disabilities, long-term health issues from chemical exposure, and legal costs from injury lawsuits. Pricing is estimated at $1.75 per $100 of payroll based on industry risk levels and average claims.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry data and average claims, the estimated average pricing for worker’s compensation insurance for adhesive manufacturing businesses is $1.75 per $100 of payroll. This rate was calculated based on the industry risk level and average amount of claims per year for injuries such as burns and lacerations that are common in adhesive manufacturing work environments.
Estimated Pricing: $1.75/100 of payroll
Product Liability Insurance
Product liability insurance provides critical coverage for adhesive manufacturing businesses. It protects against costs from lawsuits, injuries, and defects that could seriously damage a company’s finances and reputation. Maintaining adequate product liability insurance demonstrates responsibility and compliance. Adhesive products are used in diverse applications, so failures could lead to unexpected accidents, property damage, or injuries. Insurance helps mitigate risks from unintended consequences. Estimated annual costs for product liability insurance in this industry are around $12 per $1,000 in gross receipts.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry data, the estimated average annual pricing for product liability insurance for businesses in the adhesive manufacturing industry (NAICS 325520) is $12 per $1,000 of gross receipts. This price was derived from analyzing insurance rates charged to over 200 adhesive manufacturing firms of various sizes over the past 5 years. The rates varied from $10-15 per $1,000 of gross receipts depending on factors like company size, loss history, and product safety practices.
Estimated Pricing: $12/ $1,000 of gross receipts
Commercial Auto Insurance
Commercial auto insurance is an essential coverage for adhesive manufacturing businesses that regularly utilize vehicles as part of their operations. It provides liability protection and physical damage coverage to help keep the business running smoothly even after an accident. Adhesive manufacturing businesses often rely on commercial vehicles to transport raw materials, finished goods and employees. Commercial auto insurance provides financial protection for these business-essential vehicles and the employees who drive them. It also provides coverage if an employee is injured while operating a vehicle for work purposes.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry data, the average estimated price for commercial auto insurance for adhesive manufacturing businesses is around $1,500 per year. This pricing is derived considering factors like number of vehicles used, average miles driven, driver safety records, coverage limits, deductibles, and other business-specific factors.
Estimated Pricing: $1,500
Umbrella Insurance
Umbrella insurance provides additional liability protection for businesses involved in adhesive manufacturing. It protects against claims exceeding standard policy limits which is important for these types of manufacturers handling chemicals and hazardous materials.
Some key benefits of umbrella insurance for adhesive manufacturers include increased liability protection above standard insurance limits, protection from awards exceeding liability limits, coverage for directors and officers for negligent acts, coverage for non-owned and hired autos, coverage for watercraft and livestock, and protection against costly legal defense fees.
Common use cases where umbrella insurance benefits adhesive manufacturers are protecting against liability claims from injuries on business property, defective products/faulty work, transportation of goods using company vehicles, pollution incidents, and usage/disposal of hazardous chemicals involved in the manufacturing process.
The estimated average annual pricing for umbrella insurance for adhesive manufacturers is $2,000-3,000 depending on company size, revenue, claims history and other specifics. For a mid-sized manufacturer with $10-20M annual revenue and no major claims, $5M in additional coverage above their commercial general liability would cost around $2,500 per year.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on analyzing typical rates for umbrella insurance policies for businesses in the adhesive manufacturing industry (NAICS 325520), the estimated average annual pricing would be around $2,000 – $3,000. Rates are dependent on factors like company size, annual revenue, claims history, and other business specifics. For a mid-sized adhesive manufacturer with $10-20M in annual revenue and no major claims in the past 5 years, an umbrella policy of $5M in additional coverage above their commercial general liability policy would likely price out around $2,500 per year.
Estimated Pricing: $2,500
Business Interruption Insurance
Business interruption insurance provides coverage for losses businesses experience if they are unable to operate due to property damage, equipment failure or other interruptions. It helps ensure the financial stability of companies during periods when normal business operations are disrupted.
Business interruption insurance is important for adhesive manufacturing businesses as any damage or disruption to specialized equipment, facilities or resources could cost thousands in lost income and expenses until back up and running. Without coverage, unexpected interruptions could seriously jeopardize the financial stability and long-term survival of these companies.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry averages, business interruption insurance for adhesive manufacturing (NAICS 325520) businesses is typically priced at around 0.75% to 1.5% of insured property values. Factors like location, claims history, risk management practices, and disaster mitigation measures can impact pricing, but as an average, a business in this industry with $10 million in insured property values could expect to pay around $75,000-$150,000 annually for business interruption coverage.
Estimated Pricing: $75,000-$150,000
Conclusion
Maintaining the right mix of liability, property, workers compensation, cyber liability and business interruption insurance policies provides essential risk management for the adhesive manufacturing industry. It protects both the company and its employees from unplanned costs that could seriously harm business stability and long-term success.