Key Takeaways
- General liability insurance protects against third party claims for bodily injury and property damage.
- Property insurance covers repair or replacement costs if buildings, machinery or inventory are damaged.
- Workers compensation covers medical expenses and lost wages for injured employees.
- Product liability protects against lawsuits if a product defect causes harm.
- Commercial auto covers vehicle accidents and injuries involving company vehicles.
- Umbrella insurance provides additional liability coverage beyond primary policies.
- Equipment breakdown covers repair costs if machinery experiences mechanical failures.
- Business interruption insurance covers loss of income if manufacturing facilities shut down.
- Cyber liability protects against data breaches, network outages and other cyber incidents.
- Environmental impairment covers cleanup costs and lawsuits from pollution incidents.
Introduction
Businesses in the fluid power cylinder and actuator manufacturing industry face various risks that could threaten operations or finances if not properly insured. This article examines the top business insurance policies manufacturers should have in place, including general liability, property, workers compensation, product liability, commercial auto, commercial umbrella, equipment breakdown, directors & officers, business interruption, cyber liability and environmental impairment coverage.
General Liability Insurance
General liability insurance provides important protection for fluid power cylinder and actuator manufacturers, covering them against liability risks from injuries, defects, or other issues that could result in costly lawsuits. It protects the business from third-party claims of bodily injury, property damage, or personal/advertising injury. It also covers legal fees if sued, helps attract customers by demonstrating liability protections are in place, and allows the business to continue operating if a major lawsuit occurs by limiting financial risk from unforeseen incidents.
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After reviewing industry benchmarks and considering factors like business size, revenue, number of employees, past claims experience, and risk level of the operations, the estimated annual average pricing for general liability insurance would be around $5,000-$7,000 per year. This price range was calculated based on industry averages where mechanical component manufacturers typically pay $4-8 per $100 of payroll for their general liability policies.
Estimated Pricing: $5,000-$7,000
Property Insurance
Property insurance provides important protection for the physical assets, inventory and operations of businesses in the fluid power cylinder and actuator manufacturing industry. It reimburses costs from unexpected property damage or losses to keep businesses running smoothly.
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Based on industry averages, property insurance for manufacturers in NAICS 333995 Fluid Power Cylinder and Actuator Manufacturing typically costs between $3-$5 per $100 of insured assets or property value. Considering the typical assets involved in manufacturing such as machinery, equipment, inventory, and facilities, an estimated average annual premium would be around $75,000-$125,000 for a mid-sized manufacturer with $2.5M-$4M in insured property values.
Estimated Pricing: $75,000-$125,000
Workers Compensation Insurance
Workers compensation insurance is an essential protection for businesses in the fluid power cylinder and actuator manufacturing industry to cover costs of workplace injuries and ensure employees receive support if injured. It also helps avoid expensive lawsuits and improves safety. The top benefits include providing medical coverage and lost wages for injured employees, protecting businesses from liability lawsuits, being required by law, helping retain quality employees, and offering discounts for strong safety records. Common injuries in this industry involve operating machinery, lifting heavy objects, chemical exposure, and slips/falls. The estimated average cost is $2.50 per $100 of payroll based on the industry risk factors.
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Based on industry data, the estimated average pricing for workers compensation insurance for businesses in the fluid power cylinder and actuator manufacturing industry (NAICS Code: 333995) is around $2.50 per $100 of payroll. This price was derived based on the industry’s average total case rate and experience modification factor. The total case rate for this industry in the last 3 years was about 3.5, which is higher than the national average of around 1.5. The experience modification factor was also higher at around 1.2. Both factors contribute to the above average risk level and pricing for this industry.
Estimated Pricing: $2.50 per $100 of payroll
Product Liability Insurance
Product liability insurance provides important protections for businesses that manufacture fluid power cylinders and actuators. This type of insurance can help cover expenses related to injuries, property damage, recalls, and lawsuits if a defect in one of the manufacturer’s products is found to be the cause. The top benefits section outlines how it protects a manufacturer’s business from costly lawsuits, covers legal fees and expenses, reimburses costs associated with a recall, and covers lost income/extra expenses if operations must shut down due to an issue. Additionally, the top use cases section explains common situations like defective products that cause harm, component failures leading to accidents, recalled products needing repairs, or negligence claims from design/manufacturing issues. The estimated pricing section provides that on average, coverage costs $1.50 per $100 of gross receipts with a $1,500 minimum premium for this industry.
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Based on industry analysis and benchmarks, the estimated average pricing for product liability insurance for businesses in the fluid power cylinder and actuator manufacturing industry with NAICS code 333995 is around $1.50 per $100 of gross receipts, with a minimum premium of $1,500. This pricing was derived from national averages for manufacturing industries combined with risk factors specific to this industry such as the inherent dangers of high pressure fluids/gases.
Estimated Pricing: $1.50/$100 gross receipts, $1,500 minimum
Commercial Auto Insurance
Commercial auto insurance provides important protection for businesses that rely on vehicles as part of their operations. It protects companies financially from losses related to vehicle accidents and injuries while using vehicles for business purposes. The following key benefits, use cases, and estimated pricing for commercial auto insurance are important for businesses in the fluid power cylinder and actuator manufacturing industry.
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Based on industry data, the average estimated price for commercial auto insurance for businesses in the Fluid Power Cylinder and Actuator Manufacturing industry (NAICS Code: 333995) is around $1,500 per vehicle per year. This price was derived based on analyzing historical insurance quotes and average claims for this industry, which involves activities such as manufacturing hydraulic and pneumatic fluid power cylinders, hydraulic and pneumatic actuators, and related hydraulic components.
Estimated Pricing: $1,500
Commercial Umbrella Insurance
Commercial umbrella insurance provides additional liability protection for fluid power cylinder and actuator manufacturing businesses. It protects companies from expensive claims exceeding primary insurance limits such as product liability, pollution incidents, and other catastrophic risks that could threaten a business’s survival. Umbrella insurance kicks in after primary commercial policies are exhausted, protecting companies from astronomical liability suits. It extends coverage for on-the-job injuries, product defects, and other unforeseen incidents that could threaten a business’s survival. As a fluid power cylinder and actuator manufacturer, there are risks of product liability claims, pollution incidents, and other large commercial claims that could exceed primary general and pollution liability limits. Commercial umbrella insurance provides additional protection for these types of catastrophic risks and helps minimize financial loss.
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Based on average rates for manufacturing companies, umbrella policies for this industry typically price between $2/thousand for the first million of coverage and $1/thousand thereafter, subject to minimum premiums. As fluid power cylinder companies in this NAICS code work with hydraulic systems and pressurized materials, their risk profile places them above average for general manufacturers but not in the highest risk tiers. Applying the typical rates above, umbrella coverage of $2 million would estimate around $4,000 annually before any credits or surcharges are applied.
Estimated Pricing: $4,000
Equipment Breakdown Insurance
Reliable, specialized machinery is essential for the fluid power cylinder and actuator manufacturing process. Equipment breakdown insurance protects businesses financially in the event critical manufacturing equipment fails unexpectedly, helping minimize disruption to production schedules. It ensures funds are available to cover repair costs and lost income while equipment is repaired or replaced after breakdowns.
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Based on industry analysis, the average estimated pricing for equipment breakdown insurance for businesses in the fluid power cylinder and actuator manufacturing industry (NAICS Code: 333995) is around $1.50-$2.00/thousand dollars of equipment value. This price range was derived from considering typical equipment values, claims ratios, and premiums paid by companies in this industry with similar risk profiles.
Estimated Pricing: $1.50-$2.00/thousand
Directors And Officers Insurance
Directors and officers (D&O) insurance provides crucial protection for businesses in the fluid power cylinder and actuator manufacturing industry (NAICS Code 333995). It shields corporate directors and officers from personal liability and legal expenses associated with lawsuits arising from alleged wrongdoings while conducting business operations. D&O insurance also covers legal costs from government investigations, regulatory actions, and disputes with key suppliers or customers. The top benefits of D&O insurance for this industry include protecting directors and officers from personal liability in shareholder lawsuits or regulatory actions, reimbursing defense costs if a suit is filed, and indemnifying losses and damages if a legal claim is successful. The estimated annual premium for D&O insurance for medium sized manufacturing companies in this industry ranges from $15,000 to $25,000.
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Based on typical rates for medium sized manufacturing companies with under $100 million in annual revenue, the average estimated annual premium for Directors And Officers Insurance would be between $15,000 to $25,000. This pricing is derived from looking at average rates charged by top insurance carriers for this line of coverage, taking into account factors like number of employees, annual revenue, and risk profile of the industry.
Estimated Pricing: $15,000 – $25,000
Conclusion
Maintaining adequate insurance protection is essential for fluid power cylinder and actuator manufacturers to shield their operations from costs associated with lawsuits, accidents, equipment failures and other unexpected incidents. The policies discussed provide layers of financial defense for these businesses against risks inherent to manufacturing activities.