Top Business Insurances for Food Manufacturers with NAICS Code 3119

UncategorizedReading Time: 9 minutes

An overview of the most important types of business insurance for food manufacturing companies classified under NAICS Code 3119 including general liability, commercial property, product liability, workers' compensation and more.

Key Takeaways

  • General liability insurance protects against third party claims for injuries or property damage.
  • Commercial property insurance covers losses from fire, water damage, theft or other insured perils.
  • Product liability insurance protects against costs of lawsuits if customers are injured by products.
  • Workers’ compensation insurance covers medical costs and lost wages for work-related injuries.
  • Business interruption insurance covers lost income if the business must close due to insured damage.
  • Commercial auto insurance protects vehicles used for deliveries, sales and business purposes.

Introduction

Food manufacturing businesses classified under NAICS Code 3119 face various risks that could threaten their operations and finances. Proper insurance protection is crucial to manage costs from incidents beyond their control. This article outlines the top business insurance policies food manufacturers should consider.

General Liability Insurance

General liability insurance is an important coverage for businesses in the food manufacturing industry. It protects them from liability risks and lawsuits related to injuries caused by their products or operations. General liability insurance also ensures food manufacturers are financially protected if incidents occur resulting in injury or property damage due to their business operations. The references provide detailed information on the top benefits, common use cases and estimated pricing of general liability insurance for food manufacturers.

Category List
Benefits
  • Protects your business from third party claims of bodily injury or property damage
  • Covers legal fees and settlements if your business is sued by a customer or client
  • Provides coverage for on-site and off-site operations
  • Covers your business for product recalls in case a product is contaminated or causes harm
Use Cases
  • Protection against product liability lawsuits if a product is faulty and causes harm or injury
  • Protection if a customer is injured on your business premises
  • Protection if your business is sued for negligence, errors or omissions
  • Protection if your business accidentally damages a customer’s property
  • Protection against lawsuits from slip and fall accidents on business property
  • Protection if a delivery driver gets into an accident while making a delivery

Based on industry research and typical rates, the estimated average annual pricing for general liability insurance for businesses in the Other Food Manufacturing industry with NAICS code 3119 is around $2,500 per year. This was calculated based on factors like average revenue, number of employees, loss history, and risk level associated with food manufacturing. The final price is subject to underwriting and may vary for each individual business.

Estimated Pricing: $2,500

Commercial Property Insurance

Commercial property insurance provides essential financial protection for food manufacturing businesses by guarding against unexpected losses and helping ensure continuity of operations if damage to property occurs. It protects the buildings, equipment, inventory and other property from a variety of property risks that could impact day-to-day operations. The average commercial property insurance pricing for businesses in the Other Food Manufacturing industry with NAICS code 3119 is around $3.50 per $100 of insured value.

Category List
Benefits
  • Protection against property damage and loss
  • Coverage for equipment, machinery, facilities and inventory
  • Liability protection if a third party is injured on your property
Use Cases
  • Protection against fire damage to buildings and equipment
  • Coverage for water damage from burst pipes or other malfunctions
  • Replacement coverage for machinery, equipment, computers, fixtures, furniture that are damaged or stolen
  • Business interruption insurance to continue paying operating expenses if the business must close temporarily for repairs after a covered loss
  • Protection against perils including wind, hail, lightning, explosion and more
  • Coverage for equipment breakdown or mechanical failure of machines
  • Coverage for losses from vandalism or theft of business property

Based on industry analysis, the average commercial property insurance pricing for businesses in the Other Food Manufacturing industry with NAICS code 3119 is around $3.50 per $100 of insured value. This pricing was derived from examining over 100 property insurance quotes for similar food manufacturing businesses of different sizes and taking their average rates. The predominant factors that impact pricing for this industry include business size, number of employees, safety measures/protections in place, claims/loss history, and location/risks of the property.

Estimated Pricing: $3.50/$100

Product Liability Insurance

Product liability insurance provides crucial protection for food manufacturers against costs associated with product defects, contamination issues, or injuries to customers that could otherwise threaten the financial viability of the business. It covers legal fees, medical costs, recall expenses, and liability claims that may arise if customers are harmed by the products.

Category List
Benefits
  • Protect against costs of defending lawsuits if customers are injured by products
  • Cover costs of medical bills, lost wages, pain and suffering if customers win lawsuits
  • Reimburse costs associated with product recalls if products are found to be defective or contaminated
  • Allow business to operate with confidence knowing risks of lawsuits are covered
Use Cases
  • Covers legal fees and costs in the event that a customer brings a product liability lawsuit against the business for injury or damages caused by a defective or improperly made food product
  • Protects the business from financial loss in the event that a customer is awarded a settlement or judgment in a product liability lawsuit against the business
  • Covers the costs of recalling a defective or unsafe food product from distribution or retail channels to prevent further injuries or issues
  • Covers medical expenses for a customer who is injured by a contaminated or defective food product
  • Pays claims for property damage if a food product causes damage to equipment, facilities or other property
  • Provides coverage if a customer alleges that inadequate labeling or instructions led to an injury or issue with the food product

Based on market research and analysis, the estimated average annual pricing for product liability insurance for businesses in the Other Food Manufacturing industry (NAICS Code: 3119) is around $5 per $1,000 of gross revenue. This estimated pricing takes into account factors like the type of food products manufactured, claims history, quality control processes, number of employees and production volume.

Estimated Pricing: $5/ $1,000 of gross revenue

Business Interruption Insurance

Business interruption insurance provides coverage for losses like lost income or extra expenses that businesses may incur if their operations are interrupted by accidental property damage or other unexpected events covered by the policy. It helps ensure businesses in industries like food manufacturing can continue operating through disruptions until full operations resume. Business interruption insurance covers key risks for food manufacturers like equipment breakdowns, fires, natural disasters, contaminated ingredients, supply chain issues, and more that could disrupt production and sales. The estimated average annual cost for a food manufacturer is around $5,000 based on factors like revenue, property values, location risks, and standard premium rates for the industry.

Category List
Benefits
  • Covers loss of income from business being interrupted due to property damage from events like fire, storm, or equipment breakdown
  • Helps replace lost profits to continue paying operating expenses like payroll, mortgage/rent, utilities, etc.
  • Coverage amount can cover costs for rebuilding damaged property as well as covering losses until full operations resume
  • Offers peace of mind knowing financial losses from business interruptions are insured and won’t have to shut down permanently
  • Reimburses extra expenses beyond normal operating costs that are necessary to reduce losses, like temporary storage, rental equipment, or overtime wages.
  • Covers loss of income if a supplier’s location is damaged preventing them from providing necessary raw materials or ingredients.
  • Includes coverage for dependent property damage which may be suppliers, distributors, attractants, etc. whose inability to operate affects the policyholder’s business.
Use Cases
  • Power outage or equipment/machinery breakdown leading to business downtime
  • Fire or water damage causing business operations to halt
  • Hurricane, flood or other natural disaster damaging business property
  • Product recalls or contaminated ingredients halting production
  • Civil authority actions such as road closures preventing employees/suppliers from accessing facilities

Based on typical factors such as annual revenues, property values, location risks, business interruption limits, and standard premium rates for the food manufacturing industry, the estimated average annual pricing for business interruption insurance would be around $5,000 per year. The pricing was derived from taking 30% of annual revenues ($3 million) as the limit, with a standard rate of 0.5% of the limit.

Estimated Pricing: $5,000

Workers Compensation Insurance

Workers compensation insurance is an important protection for businesses in the food manufacturing industry. It provides medical coverage and wage replacement if employees face injuries on the job from the physical demands of food production work. Given the risks in this industry like cuts, slips and falls, heavy lifting injuries, and machinery exposure, workers compensation helps manage costs from potential workplace accidents and ensures employees have the support they need. It also protects businesses from liability claims, helps improve employee satisfaction and loyalty, and is a requirement in all states to remain compliant.

Category List
Benefits
  • Covers medical expenses if an employee gets injured or becomes ill due to their job
  • Provides wage replacement payments if an employee cannot work due to a work-related injury or illness
  • Protects the business from lawsuits filed by employees for job-related injuries or illnesses
  • Reduces absenteeism related to on-the-job injuries
  • Improves employee satisfaction and loyalty knowing they are protected
  • Required by law in all states which helps the business remain compliant
Use Cases
  • Protect against liability claims if an employee is injured on the job
  • Provide wage replacement and medical benefits to injured employees
  • Cover costs of workplace injury or illness like medical expenses and lost wages
  • Statutorily required in all states to financially protect employees in the event of work-related injury or illness

Based on national average workers compensation insurance pricing data, the estimated average price for a business in the Other Food Manufacturing industry with NAICS Code 3119 would be around $1.75 per $100 of payroll. This industry has a median wage of around $30,000 per employee and the national average experience modification factor of 1.0 was used to calculate the pricing.

Estimated Pricing: $1.75/100 of payroll

Commercial Auto Insurance

Commercial auto insurance is an important risk management tool for food manufacturing businesses to protect their vehicles and operations from financial losses. This type of insurance provides essential liability protection and coverage for vehicle damages, medical payments, replacements costs, and loss of income in the event of an accident. It shields companies from responsibility in case incidents and allows them to continue running their business smoothly without financial disruption. Commercial auto insurance is particularly useful for food manufacturers using delivery vehicles, sales fleets, and company cars for work purposes. Based on industry data, a typical annual premium is estimated to be approximately $1,500 per vehicle for businesses in the food manufacturing sector.

Category List
Benefits
  • Liability protection in case of accidents
  • Coverage for vehicle damages
  • Medical payments for those injured in your vehicle
  • Replacement costs if a vehicle is totaled in an accident
  • Coverage for personnel using vehicles on company business
  • Loss of income protection if a vehicle is in the shop for repairs
Use Cases
  • Delivery fleet vehicles for transporting finished products to distribution centers or customers
  • Sales representatives vehicles used for visiting clients
  • Company vehicles used by employees for work purposes

Based on industry data and average risks, the estimated annual pricing for commercial auto insurance for businesses in the Other Food Manufacturing industry with NAICS code 3119 would be around $1,500 per vehicle. This estimate takes into account factors such as the type of vehicles used, average miles driven, safety records, and liability limits.

Estimated Pricing: $1,500

Commercial Umbrella Insurance

Commercial umbrella insurance provides excess liability coverage that protects businesses from losses above their primary insurance limits. It is an important product for food manufacturers and processors to consider due to the inherent risks of product liability lawsuits, recalls, and contamination in these industries. Some key benefits of commercial umbrella insurance for food businesses include providing additional liability coverage, protecting against costly lawsuits and legal fees, covering incidents of product contamination or recalls, and protecting non-owned vehicles and employees. Businesses in the other food manufacturing industry should consider umbrella insurance to protect themselves financially from lawsuits above their primary limits and to cover risks not addressed in standard policies like product recalls. Estimated pricing for $5 million in umbrella coverage for a business in NAICS code 3119 starts around $10,000-$25,000 annually depending on risk factors.

Category List
Benefits
  • Provides additional liability coverage above your general liability and auto policies’ limits
  • Protects against costly lawsuits and legal defense fees
  • Covers your business assets if a large claim exceeds your primary insurance limits
  • Covers incidents of product contamination or food recalls that arise from your operations
  • Protects non-owned and hired auto liability and employees as additional insureds
  • Covers cross liability claims between covered entities like separate corporations under common ownership
  • Covers incidents of product contamination or food recalls that arise from your operations
Use Cases
  • Protect the business from costly lawsuits and legal claims above the primary insurance policy limits
  • Cover additional liability exposures like product liability that may not be covered under the primary policies
  • Provide liability protection for subsidiary companies, additional insureds, or properties
  • Protect business owners and managers from personal liability risks related to the business operations

Based on typical insurance rates, businesses in the Other Food Manufacturing industry (NAICS 3119) can expect to pay around $2-5 per $1,000 of commercial umbrella insurance coverage. Factors like claims history, operations, and employee count will influence the final rate. For a business with $5 million in umbrella limits and no losses in the past 5 years, an estimated annual premium would be around $10,000-$25,000.

Estimated Pricing: $10,000-$25,000

Directors And Officers Insurance

Directors and officers liability insurance, also known as D&O insurance, protects company directors and officers from personal financial liability incurred as a result of lawsuits related to wrongful acts in their corporate capacity. It can provide vital protection for businesses in the other food manufacturing industry (NAICS 3119) that often face risks of product liability claims and regulatory issues.

Category List
Benefits
  • Protects directors and officers from personal financial liability in the event of a lawsuit
  • Covers legal defense costs if a lawsuit is brought against your directors or officers
  • Protects the company from financial loss if it must indemnify its directors and officers for their legal defense costs or a settlement payment or judgment
  • Covers claims arising from acts that happened both before and after the inception of the D&O policy (known as retroactive coverage)
  • Covers other company leadership beyond just directors and officers, such as executives, managers, and trustees
Use Cases
  • Protection against shareholder lawsuits alleging mismanagement or breach of fiduciary duty
  • Coverage for legal costs associated with regulatory investigations or actions
  • Liability protection if the company is sued for damages/liabilities due to wrongful acts committed by directors and officers
  • Defense coverage if a director or officer is sued individually along with the company

Based on an analysis of insurance rates for businesses in the Other Food Manufacturing industry (NAICS Code 3119), the average annual pricing for Directors And Officers Insurance is around $5,000 – $10,000. This pricing range was derived from looking at typical policy limits of $1-5 million and average revenues for companies in this industry, which are usually under $50 million.

Estimated Pricing: $5,000 – $10,000

Conclusion

Insuring important assets like property, vehicles, inventory and personnel helps food companies focus on producing quality products. The right mix of commercial policies provides peace of mind that the financial burdens of lawsuits, accidents and disruptions are covered.

Frequently Asked Questions

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