Top Business Insurance Strategies for Fluid Power Pump and Motor Manufacturing Companies (NAICS 333996)

UncategorizedReading Time: 10 minutes

This guide covers the key insurances fluid power pump and motor manufacturers should consider including general liability, property, auto, workers' comp, product liability, business interruption, employment practices liability, and cyber liability coverage.

Key Takeaways

  • General liability insurance protects against injuries on your property and lawsuits over defective products
  • Property insurance covers costs to repair or replace buildings, equipment and inventory after disasters
  • Auto insurance provides liability protection when employees are driving for work and reimburses repair costs
  • Workers’ compensation coverage pays for employee injury medical bills and lost wages
  • Product liability shields the business from lawsuits if a pump or motor causes harm
  • Business interruption funds expenses if utilities fail or machinery breaks down halting operations
  • Employment practices liability protects against discrimination and wrongful termination lawsuits
  • Cyber liability coverage funds costs of responding to data breaches and cyber attacks

Introduction

As a fluid power pump or motor manufacturer, protecting your business operations and assets is critical. Several types of coverage are especially important for this industry due to its unique risks. This guide outlines the top insurances fluid power equipment companies should consider.

General Liability Insurance

General liability insurance is an important type of coverage for fluid power pump and motor manufacturing businesses. It provides protection from various risks associated with operating such a machinery-focused production business, including product liability, workplace injuries, property damage liability and more. The reference information provided details the key benefits, use cases and estimated pricing for general liability insurance specifically for companies in this NAICS code 333996 industry.

Category List
Benefits
  • Protects against costs associated with accidents or injuries occurring on your property
  • Covers legal expenses if you are sued by a third party for bodily injury or property damage
  • Protects your business assets by covering costs from lawsuits over accidents or incidents at your facility
  • Covers liability claims from defective products that cause property damage or injuries
  • Protects against pollution liability and cleanup costs if contaminants are accidentally released
  • Covers completed operations liability for injuries or damage occurring after a product is completed or shipped
Use Cases
  • Protect against product liability lawsuits if a pump or motor product causes property damage or bodily injury
  • Cover business if an employee is injured on the job or a visitor gets hurt on the premises
  • Provide protection if the business is sued for damages from pollution or contamination from its operations or waste disposal
  • Defend the business in the event of slip and fall or other premises liability claims from visitors
  • Indemnify contractors and customers as an additional insured with proof of coverage

Based on industry analysis of general liability insurance pricing for fluid power pump and motor manufacturing businesses (NAICS 333996), the estimated average annual premium is around $15,000. This pricing is derived considering risk factors such as machinery used in manufacturing, potential injuries in the workplace, property damage exposure, and average sales revenue for businesses in this industry. The final price is subject to the insurer’s underwriting and may vary depending on individual business characteristics.

Estimated Pricing: $15,000

Property Insurance

Property insurance provides critical protections for businesses in the fluid power pump and motor manufacturing industry (NAICS Code 333996) that rely heavily on specialized buildings, equipment, tools and inventory to operate their day to day activities. It covers costs from unforeseen incidents that could damage key assets and halt operations, such as fires, explosions, equipment failures, and transits accidents. It also offers financial support for costs of repairs, replacement of property, and temporary business expenses during recovery. Proper insurance allows businesses to resume normal functioning after a loss.

Category List
Benefits
  • Protection against property damage and theft
  • Replacement cost coverage to rebuild structures and facilities
  • Equipment breakdown coverage for machines and manufacturing assets
  • Inventory protection for raw materials and finished goods
  • Business interruption coverage to continue paying expenses if the facility is unusable
  • Extra expense coverage for temporary relocation costs if the business must move operations
  • Valuable papers and records coverage to replace important documents
Use Cases
  • Covering costs of damage to buildings and equipment from fires, explosions or other disasters
  • Covering loss or damage to inventory and raw materials on premises
  • Covering equipment breakdown or failure of machines during operation
  • Covering damage or theft of business property while in transit

Based on industry data and averages, property insurance for fluid power pump and motor manufacturing businesses typically range from $1.50 to $2.50 per $100 of insured property value. Considering the types of equipment and machinery used in this industry, an estimate towards the higher end of $2.50 per $100 would be appropriate. For a business with $10 million in property values, its annual property insurance premium would be approximately $250,000.

Estimated Pricing: $250,000

Workers Compensation Insurance

Workers compensation insurance is an essential risk management tool for fluid power pump and motor manufacturing businesses. It provides coverage for employee injuries sustained on the job while shielding companies from costly legal battles. Additionally, it ensures injured employees continue receiving medical treatment and wages if hurt at work. Typical costs for this industry range from $3 to $4 per $100 of payroll.

Category List
Benefits
  • Provide coverage for employee injuries sustained on the job
  • Protect the business from liability lawsuits from injured employees
  • Coverage is required by law in most states
  • Ensure employees receive medical treatment and lost wages if injured at work
  • Shield the business from costly legal battles
Use Cases
  • Covering medical expenses if an employee is injured on the job
  • Replacing part of lost wages for injured employees
  • Covering disability or death benefits for seriously injured employees

Based on national average pricing data from major workers compensation insurance carriers, the estimated average annual workers compensation insurance premium for businesses in the fluid power pump and motor manufacturing industry (NAICS 333996) is around $3.00 to $4.00 per $100 of payroll. This pricing is derived considering industry risk factors such as machinery operation and material handling. The rates may vary depending on individual business’s claims history, safety programs and measures in place.

Estimated Pricing: $3.00-$4.00 per $100 of payroll

Auto Insurance

Auto insurance provides important liability and physical damage coverage for fluid power pump and motor manufacturing businesses that rely on commercial vehicles for transportation of equipment, parts, and finished products between job sites and customer locations. It protects the financial health of operations by covering costs associated with accidents, reimbursing medical expenses for injured parties, and allowing for replacement rentals to keep business operations running smoothly after a loss. Average auto insurance rates for businesses in this industry tend to be on the higher side due to the types of commercial vehicles used and risks associated with transporting mechanical and hydraulic equipment.

Category List
Benefits
  • Protects against third-party liability claims if an employee is in an accident while driving a company vehicle
  • Covers medical expenses and lost wages if an employee is injured in a vehicle accident while on company business
  • Reimburses for damages, towing or car rental if a company vehicle is in an accident
  • Covers the value of company vehicles if they are totaled in an accident
  • Provides coverage when driving customers or transporting equipment between job sites
  • Covers legal fees and replacement rentals if a vehicle is impounded as part of a lawsuit following an accident
Use Cases
  • Covers owned vehicles used by employees for company business
  • Covers non-owned and hired vehicles used in operations
  • Provides liability protection if an employee causes an accident while driving for work
  • Covers business deliveries and transport of parts and products
  • Reimburses medical expenses for injured passengers or third parties in an accident

Based on industry research, the average auto insurance rate for businesses in the fluid power pump and motor manufacturing industry (NAICS 333996) is around $1,500-$2,000 per year. Rates can vary depending on factors like number of vehicles insured, driver records, location, coverage limits, deductibles, and optional endorsements. National industry data shows average rates for this NAICS code tend to be on the higher side due to the type of commercial vehicles used as well as potential risks of transporting or using mechanical or hydraulic equipment.

Estimated Pricing: $1,500-$2,000

Product Liability Insurance

Product liability insurance is essential for businesses in the fluid power pump and motor manufacturing industry, as this type of specialized machinery could potentially cause injuries if defects are present. The top benefits of product liability insurance for this industry include protecting the business from costly lawsuits and legal fees if a defective product harms someone. It also helps cover damages, recalls if issues are found, and maintains positive customer relationships. Given the potential hazards of high-pressure fluids, moving parts and electrical components, product liability insurance is important to mitigate financial risks from litigation and injuries. Estimated annual pricing is around $5,000-$10,000 per $1 million in sales.

Category List
Benefits
  • Protects your business from costly lawsuits if a defective product causes bodily injury or property damage
  • Covers legal fees and settlement costs if your business is sued for a product-related incident
  • Mitigates financial risk of product defects or failures that harm customers
  • Compensates injured parties for expenses like medical bills and lost wages if your product is found responsible
  • Maintains positive customer relationships and reputation by demonstrating accountability
  • Allows you to focus on operations rather than litigation in the event of an accident
  • Satisfies contractual obligations to customers who require proof of liability insurance coverage
  • Demonstrates liability protection to potential customers and helps increase sales
  • Policy limits, exclusions and conditions are clearly outlined to manage liability exposure
Use Cases
  • Covers legal costs if a customer is injured by a defective product
  • Pays damages awarded by a court if the customer wins a product liability lawsuit
  • Reimburses costs associated with a product recall if defects are discovered
  • Covers legal defense if the business is sued for intellectual property infringement like patent infringement
  • Protects against risks/financial losses from injuries caused by defective products or faulty workmanship in fluid power pumps, motors or their components

Based on industry data and risk factors, the estimated average annual pricing for product liability insurance for businesses in the fluid power pump and motor manufacturing industry (NAICS 333996) is around $5,000-$10,000 per $1 million of sales. This pricing level is derived considering risk factors such as the types of machinery and equipment being manufactured, potential hazards involved, overall claims history of the industry, and other insurance experience factors.

Estimated Pricing: $5,000-$10,000 per $1 million of sales

Business Interruption Insurance

Business interruption insurance provides critical coverage for businesses in the fluid power pump and motor manufacturing industry (NAICS 333996) in the event operations are disrupted due to events outside of their control such as equipment failures, supply chain issues, weather events, and more. It covers loss of income and expenses to keep businesses running during disruptions, helping protect cash flow and maintain financial stability. The top benefits include covering loss of income without physical property damage, reimbursing additional expenses, and reimbursing income during disruptions. Common use cases involve losses from equipment damage, supply chain issues, utility disruptions, cyberattacks, reliance on suppliers, and pandemic impacts. Pricing is estimated around $2.50 per $100 of insurable gross profits.

Category List
Benefits
  • Covers loss of income if business operations are interrupted
  • Provides funding to cover operating expenses if facilities are unusable
  • Insures income even if there is no physical damage to property
  • Reimburses additional expenses to keep business running during disruption
  • Protects cash flow and helps maintain financial stability
Use Cases
  • Loss of income due to building damage from fire, storms, or equipment failure
  • Loss of income due to equipment damage and repairs from break downs or accidents
  • Loss of income due to supply chain disruptions affecting availability of key materials
  • Loss of income due to utility disruptions like power outages affecting production
  • Loss of income due to cyberattacks or technology failures affecting operations
  • Loss of income due to contingent business interruption from supplier failures
  • Loss of income due to pandemic restrictions on operations and shutdowns

Based on industry studies and analysis of risk factors, the estimated average annual pricing for business interruption insurance for businesses in the fluid power pump and motor manufacturing industry (NAICS 333996) would be around $2.50 per $100 of insurable gross profits. This price was derived considering factors such as the industry’s risk of property damage losses from machinery accidents or breakdowns that could disrupt operations, average claims history, financial stability of companies in the sector, and target profit margins for insurance underwriters.

Estimated Pricing: $2.50 per $100 of insurable gross profits

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) is an important type of coverage for businesses in the fluid power pump and motor manufacturing industry. EPLI provides protection from expensive lawsuits related to workplace issues like discrimination, harassment, wrongful termination and other employment-related claims that are common risks for manufacturers.

Category List
Benefits
  • Protection from lawsuits related to wrongful termination, discrimination, sexual harassment or other civil rights violations
  • Defense costs in the event of an employment-related legal claim or lawsuit
  • Payout for settlements or judgments if your business is found liable for an employment practice violation
  • Access to attorneys specializing in labor and employment law for advice and risk prevention strategies
Use Cases
  • Wrongful termination lawsuits
  • Discrimination or harassment claims
  • Wage and hour violation lawsuits
  • Failure to promote/demotion lawsuits
  • Leave of absence violation lawsuits
  • Retaliation claims

Based on typical rates for businesses in this industry, the estimated average annual pricing for Employment Practices Liability Insurance would be around $3,500. Rates are calculated based on factors such as number of employees, annual payroll, type of business operations, claims history, and risk management practices. For a mid-sized company in this industry with 50 employees and $5 million in annual payroll, no recent claims, and proper HR training and documentation processes in place, the estimated price would be in the range of $3,000 – $4,000 per year.

Estimated Pricing: $3,500

Cyber Liability Insurance

Cyber liability insurance provides important coverage for fluid power pump and motor manufacturers who handle sensitive customer and technical data. It can help protect against costs associated with data breaches, cyber attacks, business interruptions and lawsuits. Some key benefits of cyber insurance for this industry include covering notification costs, credit monitoring, legal fees, fines and lost income from attacks. Given these manufacturers deal with designs, engineering data and customer information, they could be targets for cyber criminals. The average estimated annual price for a $1M policy is around $2,500.

Category List
Benefits
  • Covers costs of notifying customers of a data breach
  • Pays for credit monitoring services for customers after a breach
  • Covers legal costs and fines/penalties from a data breach
  • Provides resources for a cyber incident response team in the event of an attack
  • Covers costs of a public relations firm to manage communications after a breach
  • Covers business interruption costs such as lost income if systems are offline due to an attack
  • Protects against lawsuits from customers and clients if their data is compromised
  • Covers costs of a public relations firm to manage communications after a breach
Use Cases
  • Data breach or cyber attack leading to loss of customer, employee or business partner data
  • Costs associated with responding to a cyber attack such as notifying affected individuals, providing credit monitoring services, forensics investigations and legal fees
  • Business interruption and lost income if systems are compromised by a ransomware or other cyber attack
  • Regulatory fines and penalties for failure to protect data as required by laws like Europe’s GDPR and California’s CCPA
  • Lawsuits by customers, employees or business partners whose private information was compromised
  • IP theft, disclosure of trade secrets or confidential proprietary information through cyber attacks

Based on industry research, the average pricing for cyber liability insurance for businesses in the fluid power pump and motor manufacturing industry with NAICS code 333996 is around $2,500 per year. This was calculated based on typical policy limits of $1 million and a deductible of $25,000. Higher limits and lower deductibles would increase the price, while lower limits and higher deductibles would decrease the price. Employee count, data security practices, and claim history also impact pricing.

Estimated Pricing: $2,500

Conclusion

Proper insurance planning tailored to your business needs can help fluid power pump and motor manufacturers in NAICS code 333996 protect their finances and sustainability. The coverages discussed provide protection from lawsuits, repairs, lost income and more to keep operations running smoothly after incidents. Directors & officers insurance also protects business owners and managers from lawsuits over their decisions.

Frequently Asked Questions

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