Key Takeaways
- General liability insurance protects your business from liability claims and lawsuits
- Property insurance covers repair/replacement costs if facilities or equipment are damaged
- Product liability insurance covers injury claims and lawsuits related to defective products
- Professional liability insurance protects from lawsuits related to faulty products or equipment
- Workers’ compensation covers medical expenses and lost wages for injured employees
- Commercial auto insurance covers vehicles used for business purposes
- Cyber liability insurance protects from data breaches and network security incidents
- Directors and officers insurance protects corporate leaders from lawsuits
- Employment practices liability insurance covers workplace discrimination/harassment claims
- Equipment breakdown insurance covers repair/replacement of specialized manufacturing equipment
Introduction
As a business in the farm machinery and equipment manufacturing industry, it is important to have adequate insurance in place to protect your operations from financial risks. Some of the key types of coverage to consider include general liability, property, product liability, professional liability, workers’ compensation, commercial auto, cyber liability, directors and officers liability, employment practices liability and equipment breakdown insurance. These forms of insurance can help shield your business from potentially expensive lawsuits, injuries, property damage and more.
General Liability Insurance
General liability insurance provides key protections for businesses in the farm machinery and equipment manufacturing industry. It covers incidents that occur on the business’s premises as well as issues that may arise from defective products after sale, ensuring the business is financially protected from potentially expensive claims. The top benefits of general liability insurance for these businesses include protecting from financial loss due to incidents, covering medical expenses and property damage claims from third parties, meeting contract requirements, and providing peace of mind. The top use cases involve protecting the business from product liability lawsuits, covering legal costs and damages if someone gets injured on premises, and indemnifying the business if a contractor gets injured while working onsite. Pricing for general liability insurance for these businesses averages around $5-7 per $1,000 of gross receipts, with a minimum premium of $1,500-2,000.
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Based on industry data and standards, the average annual pricing for general liability insurance for businesses in the farm machinery and equipment manufacturing industry (NAICS 333111) is around $5-7 per $1,000 of gross receipts, with a minimum premium of $1,500-2,000. This pricing takes into account factors like the risks associated with manufacturing machinery/equipment as well as historical loss data for the industry.
Estimated Pricing: $5-7 per $1,000 of gross receipts, minimum of $1,500-2,000
Property Insurance
Property insurance helps protect businesses in the farm machinery and equipment manufacturing industry from financial losses due to damage or theft of property and facilities. It covers costs of repairs, replacements and lost revenue from covered incidents such as fires, storms or equipment malfunctions to keep operations running smoothly. Manufacturing facilities house expensive equipment and inventory essential for building farm machinery. Insurance provides coverage to repair or replace costly machines, tools, and raw materials if damaged to continue production. Affordable average rates help safeguard major investments in property critical to operations.
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Based on industry analysis, the average pricing for property insurance for businesses in the farm machinery and equipment manufacturing industry is around $1.50 per $100 of insured property value. This price was derived from general industry data on average property values and losses for this NAICS code. The machinery, equipment, and inventory involved in farm equipment manufacturing can be expensive to replace in the event of a covered loss like fire or storms. Insurers also factor in compliance with manufacturing safety standards to help determine pricing.
Estimated Pricing: $1.50/100
Product Liability Insurance
Product liability insurance provides important protection for farm machinery and equipment manufacturers. It shields companies from financial losses due to injury claims and lawsuits related to defective products. It also reimburses costs of product recalls and covers damage caused to crops or other equipment by faulty products. Maintaining customer trust and meeting contractual obligations are additional key benefits of this type of coverage for businesses in this industry.
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Product liability insurance pricing for farm machinery and equipment manufacturing businesses (NAICS 333111) is typically estimated to be around $2-3 per $100 of revenue. This pricing is derived based on the high risk nature of machinery and equipment that could potentially cause injuries. It also factors in past claims data for this industry which shows significant injury risks from large farm equipment.
Estimated Pricing: $2-3 per $100 of revenue
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, is crucial coverage for businesses in the farm machinery and equipment manufacturing industry due to the risks of defective products. It can help cover costs of lawsuits, legal defense, product recalls, and lost income from issues involving manufactured equipment or vehicles.
Some key benefits of this type of insurance for manufacturers in NAICS code 333111 include protecting from costs of investigating and recalling defective products, reimbursing lost business income during a product issue, and covering judgements or settlements above a company’s standard liability limits. It also pays for legal defense if a customer sues over economic damages related to equipment faults. Common use cases where this coverage applies include product liability claims, property damage from machines, bodily injury from products, and legal defense in lawsuits over alleged defects.
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Based on typical policies offered for manufacturers in this industry, the estimated average annual premium for professional liability insurance would be $8,000-$10,000. Factors like annual revenue, number of employees, claims history would be considered in determining the final price. Larger firms with higher revenue and more employees tend to pay closer to $10,000 while smaller manufacturers may pay closer to $8,000.
Estimated Pricing: $8,000-$10,000
Workers’ Compensation Insurance
“Workers’ compensation insurance provides important protections and benefits for both employees and employers in hazardous industries like farm machinery and equipment manufacturing. It can help ensure employees receive support while recovering from workplace accidents and also protects businesses from expensive lawsuits. This type of insurance is also required by law in most states and provides an average estimated pricing of $1.70 per $100 of payroll for businesses in this industry.”
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Based on industry data and analysis, the average workers’ compensation insurance pricing for businesses in the farm machinery and equipment manufacturing industry (NAICS Code 333111) is around $1.70 per $100 of payroll. This rate is derived considering injury rates, claim frequencies and costs, compliance with safety procedures by businesses in this industry, which has moderate risk level for workplace injuries compared to other manufacturing industries.
Estimated Pricing: $1.70 per $100 of payroll
Commercial Auto Insurance
Commercial auto insurance provides important protections and liability coverage for businesses in the farm machinery and equipment manufacturing industry. It helps shield companies from financial loss and liability risks associated with fleet vehicles used to transport machinery, equipment, employees and conduct business operations. Key benefits of commercial auto insurance for this industry include coverage for company-owned delivery vehicles, employee commuting vehicles, service/repair vehicles, and vehicles used in product demonstrations. Estimated annual premiums for commercial auto insurance per vehicle in this industry range from $1,200 to $1,500.
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Based on industry trends and average claims, the estimated annual premium for commercial auto insurance for businesses in the farm machinery and equipment manufacturing industry is around $1,200-$1,500 per vehicle. Premiums are calculated based on number of vehicles, driver records, average miles driven annually, liability limits, and location among other factors. Higher risk territories or drivers may pay more than this estimated range.
Estimated Pricing: $1,200-$1,500
Cyber Liability Insurance
As a manufacturer of farm machinery and equipment, understanding and mitigating cyber risks is crucial. The manufacturing of farm equipment increasingly relies on digital technologies and collection of customer data, exposing businesses to growing cyber threats. Cyber liability insurance helps protect against costs associated with data breaches, network outages, ransomware, third party liability claims, reputational damage from a cyber incident. It also provides access to risk management resources and crisis response services to strengthen security defenses and guide recovery efforts.
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Based on research, the average price for cyber liability insurance for businesses in the farm machinery and equipment manufacturing industry with NAICS code 333111 is around $3,000-$5,000 annually. This pricing was derived from analyzing insurance quotes from several top carriers for companies in this industry with $10-50 million in annual revenues and 50-200 employees. The pricing takes into account the company size, data they collect and store, security protocols, number of incidents in the past, and risk level of the industry.
Estimated Pricing: $3,000-$5,000
Directors And Officers Insurance
Directors and officers insurance, also known as D&O insurance, provides liability protection for corporate executives and directors from litigation expenses and various legal costs resulting from lawsuits.
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Based on research of average pricing from top D&O insurance providers for businesses in the farm machinery and equipment manufacturing industry (NAICS 333111), the estimated average annual premium is around $5,000-$10,000. The pricing is usually determined based on factors like the company’s annual revenue, number of employees/directors, litigation risk level in the industry, and claims history.
Estimated Pricing: $5,000-$10,000
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) is an important insurance protection for companies in the farm machinery and equipment manufacturing industry. EPLI covers legal costs and potential payouts associated with lawsuits involving issues like discrimination, wrongful termination, harassment and other employment-related claims that are common risks for all employers.
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Based on typical pricing models for this industry, the estimated average annual premium for Employment Practices Liability Insurance would be between $5,000 to $10,000. Premiums are typically calculated based on number of employees and annual revenue. With an average of 100 employees and $50 million in annual revenue, the mid-point price of $7,500 would be a reasonable estimate for companies in this industry segment.
Estimated Pricing: $7,500
Equipment Breakdown Insurance
Equipment breakdown insurance provides coverage for repair or replacement costs if specialized equipment used in the farm machinery manufacturing industry fails unexpectedly. It can help minimize disruptions to operations by providing funds quickly to address equipment issues. Equipment breakdown insurance is especially important for businesses in the farm machinery manufacturing industry since their operations rely heavily on specialized industrial equipment that can be very expensive to repair or replace if damaged. Having this coverage can help minimize disruptions to operations by providing funds quickly to address issues and resume production. Businesses in the farm machinery and equipment manufacturing industry rely heavily on specialized and precision equipment to produce their goods. An unexpected breakdown or failure of a major piece of manufacturing equipment could be extremely costly and disruptive to operations. Equipment breakdown insurance helps cover the costs of repairs or replacement in the event equipment fails unexpectedly. Based on industry analysis, the average equipment breakdown insurance pricing for businesses in the farm machinery and equipment manufacturing industry (NAICS 333111) is around 0.40% to 0.50% of total property values insured. Key factors that affect pricing include total property values, age of facilities and equipment, location, loss history, and risk management practices. For a company with $50 million in total property values, the estimated annual premium would be $200,000 to $250,000.
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Based on industry analysis, the average equipment breakdown insurance pricing for businesses in the farm machinery and equipment manufacturing industry (NAICS 333111) is around 0.40% to 0.50% of total property values insured. Key factors that affect pricing include total property values, age of facilities and equipment, location, loss history, and risk management practices. For a company with $50 million in total property values, the estimated annual premium would be $200,000 to $250,000.
Estimated Pricing: $200,000 to $250,000
Conclusion
In summary, companies in the farm machinery and equipment manufacturing industry should evaluate their insurance needs and purchase appropriate types of coverage such as general liability, property, product liability, professional liability, workers’ compensation, commercial auto, cyber liability, directors and officers liability, employment practices liability, equipment breakdown and others. Comprehensive insurance protection can help minimize financial losses from risks outside of a company’s control and allow the business to focus on producing quality farm equipment.