Top Business Insurances for Manufacturers in Military Vehicle, Tank, and Tank Component Industry with NAICS 336992

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Learn the key business insurances and policies military vehicle and tank manufacturers should consider including general liability, property, workers' compensation, product liability and more.

Key Takeaways

  • General liability insurance protects against costly lawsuits from injuries on premises or defects.
  • Property insurance covers expensive manufacturing equipment, facilities and inventory from damages.
  • Workers’ compensation covers injuries from operating heavy machinery and hazardous materials exposure.
  • Product liability protects if a defect leads to harm during military use years later.
  • Professional liability defends design or manufacturing errors and omissions claims.
  • Commercial auto covers vehicles transporting heavy equipment between sites.
  • Cyber insurance protects against data breaches, ransomware, IP theft of sensitive military plans.
  • Directors and officers liability defends personal assets of executives from lawsuits.
  • Employment practices liability avoids costs from discrimination, harassment or wrongful termination claims.

Introduction

Businesses that manufacture military armored vehicles, tanks and their components face unique risks due to the hazardous nature of their work. Protecting the operation requires considering various insurance policies to mitigate financial exposure from lawsuits, equipment damages and workplace injuries that are inherent to this industry.

General Liability Insurance

General liability insurance offers important protection for businesses in the military armored vehicle, tank, and tank component manufacturing industry. It covers costs from lawsuits related to injuries, property damage or defects from products in this high-risk sector. The top benefits include protecting the business from costly litigation, covering legal defense fees, providing peace of mind, and insuring against environmental hazards. The key use cases center around defects that could lead to serious accidents and liability for failures during military operations. Pricing for this industry averages $15,000 annually due to the hazardous nature of work.

Category List
Benefits
  • Protects your business from costly lawsuits if a customer/third party claims they were injured by your products/services
  • Covers legal fees and other costs associated with defending against a lawsuit
  • Provides peace of mind knowing that you have coverage in place should an incident occur
  • Covers bodily injury and property damage claims from testing accidents, injuries at facilities or during transportation/delivery of products
  • Insures against pollution and environmental damage claims related to manufacturing processes
  • Covers product recall expenses in the event a defect is discovered
Use Cases
  • Protects against third-party lawsuits if a product is defective or malfunctions
  • Covers costs if a customer or third party is injured on your premises
  • Pays legal costs if you are sued for damages to someone else’s property
  • Covers liability if a vehicle or component malfunctions during testing or demonstrations
  • Protects the business if a vehicle or component failure causes bodily harm or property damage during military exercises or combat

Based on industry analysis, the average estimated pricing for general liability insurance for businesses in the Military Armored Vehicle, Tank, and Tank Component Manufacturing industry with NAICS Code: 336992 is $15,000/year. This pricing was derived from several factors including the hazardous nature of the manufacturing processes involved as well as higher risks of accidents or defects that could lead to costly claims.

Estimated Pricing: $15,000/year

Property Insurance

Property insurance provides important protection for businesses in the military armored vehicle, tank, and tank component manufacturing industry. It covers their significant capital investments in specialized manufacturing equipment, facilities, inventory and more against a variety of risks. The top benefits of property insurance for these businesses include protection against property damage and losses, reimbursement for repairing or replacing damaged property, peace of mind knowing their property is covered, coverage for equipment failures or outages, and liability protection if a defect causes damage to other property. Property insurance also provides valuable coverage for the key use cases faced by these businesses such as protection of expensive manufacturing equipment and facilities, coverage for damage to inventory, liability coverage if a product needs recalled, business interruption coverage, and coverage for employee tools and equipment. Given the capital-intensive nature of manufacturing military vehicles and components, property insurance provides important financial protection and security for these specialized manufacturing operations.

Category List
Benefits
  • Protection against property damage and losses
  • Reimbursement for expenses related to repairing or replacing damaged property
  • Peace of mind knowing your property is covered
  • Coverage for equipment failures or outages
  • Liability protection if a defect causes damage to other property
  • Coverage for hazards like fire, lightning, explosions, wind and hail
Use Cases
  • Protection against damage or destruction of expensive manufacturing equipment and facilities
  • Coverage for damage or loss of inventory such as finished vehicles, components, parts and supplies from perils like fire, explosions, storms etc.
  • Liability coverage in case a manufactured product needs to be recalled
  • Business interruption coverage to continue paying operating expenses if the business needs to temporarily shut down operations due to a covered loss
  • Protection of buildings, hangars and other facilities from hazards like fires, explosions, storms, falling objects etc.
  • Coverage for employee tools and equipment used in the manufacturing process

Based on typical insurance rates for businesses that manufacture military equipment and vehicles, the estimated average annual pricing for property insurance would be around $5-7 per $100 of insured equipment, facilities, and inventory value. Property insurance rates for manufacturing businesses are usually based on the level of risk, costs of claims, and property values. Given the specialized nature of manufacturing military armor, vehicles and components, the risk is moderately high which results in rates in the middle of the range for manufacturers.

Estimated Pricing: $5-7 per $100 of insured value

Workers’ Compensation Insurance

For businesses in the military armored vehicle, tank, and tank component manufacturing industry, workers’ compensation insurance is highly recommended due to the risks of injuries from operating heavy machinery, lifting heavy vehicle parts, and exposure to hazardous materials. This type of manufacturing work presents common risks such as accidents involving falls, cuts, bruises during the manufacturing process as well as repetitive stress or overexertion injuries from tasks like welding or assembling vehicle parts. Workers’ compensation provides coverage for medical expenses and lost wages should employees get injured on the job from these risks particular to this hazardous manufacturing work. The estimated average annual cost for workers’ compensation insurance would be around $15 per $100 of payroll based on typical risk factors for this industry.

Category List
Benefits
  • Provides coverage for worker injuries
  • Protects the business from costly lawsuits
  • Mandatory in many states and jurisdictions
  • Covers medical expenses for work-related accidents and injuries
  • Pays lost wages for time missed due to injuries
  • Reduces turnover from on-the-job injuries
Use Cases
  • Injuries from operation of heavy machinery and equipment like welding torches, cranes, assembly machines, etc.
  • Injuries from lifting or moving heavy vehicle parts and components
  • Exposure to hazardous substances like coatings, fumes, and particulates
  • Accidents involving falls, cuts, bruises during the manufacturing process
  • Repetitive stress or overexertion injuries from tasks like welding or assembling vehicle parts

Based on typical risk factors for this industry such as heavy machinery operation, metal fabrication, and hazardous material exposure, the estimated average annual cost for workers’ compensation insurance would be around $15 per $100 of payroll. This figure was derived from published industry data and insurer rate tables, which indicated an expected risk rating around 1.50 for this NAICS code.

Estimated Pricing: $15/100 of payroll

Product Liability Insurance

Product liability insurance provides critical coverage for manufacturers in the military armored vehicle, tank, and tank component industry. This type of insurance helps protect against expensive lawsuits and damages claims that could arise if a design or manufacturing defect results in injury, death or property damage. It also helps businesses demonstrate their commitment to safety and quality standards to customers and gain competitive advantages when pursuing new contracts and business opportunities. The top benefits highlighted in the reference include protecting finances from costly claims, transferring risk to insurers, proving quality assurances to partners, and gaining peace of mind through coverage of long-term defects. Given the serious hazards involved in defective military products, premium costs for this industry are understandably high at an estimated $150,000-$200,000 annually per business.

Category List
Benefits
  • Protect against costly lawsuits if a product malfunctions or causes injury
  • Transfer some financial risk to the insurer in case of product-related claims
  • Show customers and business partners that you stand behind your products
  • Peace of mind knowing you have coverage for defects that may lead to injury or damage years after a product was sold
  • Insurance requirements – Government contracts may require proof of liability insurance
  • Help retain customers and secure new business with assurance of responsible risk management
Use Cases
  • Protect against claims of bodily injury or property damage caused by defective products
  • Cover legal costs and settlements/awards from lawsuits alleging defective design, manufacturing, or warnings on product labels
  • Reimburse costs associated with product recalls to fix or replace defective products
  • Defend against liability claims from military personnel injured or killed due to product defects during training or combat situations
  • Mitigate risks associated with manufacturing or supplying components that are integrated into larger weapon/defense systems

Based on typical pricing factors such as number of employees, annual revenue, loss history, and risk of the products manufactured, the estimated average annual premium for product liability insurance would be around $150,000-$200,000 per year. Since these types of specialized military vehicles and components carry risks of serious physical harm and even death if a defect occurs, insurers would price the policies relatively high to account for this elevated risk exposure.

Estimated Pricing: $150,000-$200,000

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions (E&O) insurance, is an important risk management tool for businesses in the sensitive military armored vehicle, tank, and tank component manufacturing industry. It helps protect them from costly lawsuits in the event of defective products or negligent services.

Category List
Benefits
  • Protects against claims of faulty workmanship or errors and omissions
  • Covers legal costs if a lawsuit is filed against your business
  • Reduces risk of financial loss that could threaten the survival of your business
  • Shows clients you take professional responsibility seriously
  • Required by many government and commercial contracts
  • Protects your business reputation in case of a claim
  • Demonstrates financial responsibility to contractors and partners
Use Cases
  • Protection against claims of defective design or manufacturing of armored vehicles, tanks, or tank components
  • Protection against claims of errors and omissions made during the manufacturing process
  • Protection against claims of failure of armored vehicles, tanks, or tank components during use resulting in injury, death or property damage

Based on historical data of premiums paid by similar companies in this industry, the estimated average annual pricing for professional liability insurance would be in the range of $50,000 to $75,000. This pricing range takes into account factors such as the risks associated with manufacturing military vehicles and components, the size of the business, and its annual revenue. The final policy pricing would depend on underwriting evaluation of the specific company’s operations, claims history, and risk management practices.

Estimated Pricing: $50,000 – $75,000

Commercial Auto Insurance

Commercial auto insurance is an important coverage for businesses in the military armored vehicle, tank, and tank component manufacturing industry. It provides protection from financial losses that can result from vehicle accidents and damage claims. Commercial auto insurance also covers liability risks associated with transporting heavy military equipment and vehicles. Specialized policies can address risks from operating heavy machinery and hauling very large cargo.

Category List
Benefits
  • Protection against financial loss due to an accident or damage/liability claim from operating vehicles for business
  • Coverage for vehicles used in the business such as trucks, vans, forklifts, etc.
  • Liability protection if a vehicle is involved in an accident
  • Coverage for business property and cargo transported in vehicles
  • Medical payments coverage for those injured in an accident involving a business vehicle
  • Coverage for specialty vehicles used in the manufacturing process like heavy machinery
  • Access to experienced commercial auto insurance professionals who understand the unique needs of this industry
Use Cases
  • Covering company owned vehicles like trucks used to transport heavy equipment between facilities
  • Insuring commercial vehicles used by employees for activities like visiting customers’ facilities
  • Covering liability from accidents that occur during the transportation of tanks, armored vehicles or their components
  • Insuring specialty vehicles designed to transport tanks, such as heavy haul trucks

Based on industry research and analysis, the estimated average annual pricing for commercial auto insurance for businesses in this industry would be around $15,000-$25,000 per year. Factors like the types of vehicles used (heavy trucks, specialized equipment, etc.), amount of equipment/vehicle values insured, driver qualifications, miles driven, safety record, and other underwriting factors were considered in deriving this estimated price range.

Estimated Pricing: $15,000-$25,000

Cyber Insurance

As a manufacturer of sensitive military equipment and technology, cyber insurance is critical for companies in this industry to help mitigate risks and costs associated with data breaches, ransomware attacks, intellectual property theft, network disruptions and lawsuits that could threaten national security and business operations. Given the sensitive nature of their work designing armored vehicles and tank components, cyber attacks targeting theft of military plans or disruptions of manufacturing systems could endanger national security and military readiness. As defense contractors, losses or disclosures of classified program information would be unacceptable. Cyber insurance can help transfer these elevated cyber risks for businesses in this sensitive sector.

Category List
Benefits
  • Covers costs of responding to a cyber attack like notifying customers of a data breach
  • Pays for reputational harm like hiring a PR firm after a ransomware attack
  • Reimburses for technical investigations to determine the scope of an incident
  • Covers costs of forensic investigations and potentially hiring cybersecurity experts
  • Pays for legal expenses and penalties from regulatory agencies
  • Reimburses for ransom payments if the policy allows it
  • Covers lost income or profits if systems are down during an incident
  • Provides access to legal advisors, public relations consultants and technical specialists following an attack
  • Covers costs of a potential redesign of systems and processes after a breach
  • Includes training for employees on cybersecurity best practices
Use Cases
  • Data breach or cyber attack resulting in loss or disclosure of sensitive military plans, component designs, customer data
  • Ransomware attack encrypting critical design files and manufacturing systems until ransom is paid
  • Intellectual property theft of designs for new armored vehicles or components from a cyber attack or insider threat
  • Operational technology systems hack that disrupts manufacturing machinery or assembly lines
  • Accidental loss or unauthorized public disclosure of classified military program information from a network breach
  • Costs of notifying affected parties and providing credit monitoring in the event of a data breach involving personnel or customer data
  • Liability claims and lawsuits from affected individuals, customers or government entities due to a cyber attack or data breach
  • Regulatory fines and penalties from non-compliance with data protection laws from a cyber incident

Based on typical pricing for sensitive industries like defense contractors and manufacturers, the estimated average annual premium for cyber insurance would be between $25,000 to $50,000. The premium is calculated based on company size, annual revenue, data storage amounts, and security practices/capabilities. Given that this industry deals with sensitive military technologies and classified information, cyber risk is elevated and pricing would be on the higher end of averages.

Estimated Pricing: $25,000-$50,000

Directors And Officers Insurance

Directors and officers insurance, also known as D&O insurance, provides valuable liability protection for company directors and executives. It helps shield their personal assets from lawsuits related to business decisions and covers legal defense costs if the company is unable to pay damages.

D&O insurance is especially important for businesses in the high-risk military defense contracting industry. These companies often work with sensitive technologies and information, so they may face additional legal risks from government inquiries or non-compliance. D&O insurance can help cover litigation costs and damages from product liability claims if military equipment malfunctions or causes injuries.

Category List
Benefits
  • Protects directors and officers from personal liability in the event of a lawsuit
  • Helps with defense costs if a lawsuit is brought against directors or officers
  • Covers costs of legal representation, court costs, fines, and judgments if directors/officers are named in a lawsuit
  • Provides protection against shareholder class-action lawsuits
  • Attracts qualified directors and officers by reducing the risk of personal liability
  • Helps retain experienced directors and officers who might otherwise be hesitant to continue service without liability protection
  • Provides reassurance to directors, officers and shareholders that the company has appropriate liability coverage in place
  • Provides an extra layer of protection for the company from vicarious liability where lawsuits could be directed at the company for actions of directors and officers
Use Cases
  • Cover legal defense costs if the company or directors/officers are sued for alleged wrongdoing such as defective products
  • Cover settlements and awards if the company or directors/officers are found legally liable for damages
  • Cover crisis management expenses such as PR firms if there is a incident or crisis involving the company
  • Cover investigations and legal costs associated with government inquiries and audits that are common in defense contracting
  • Cover costs of complying with additional government regulations and requirements for defense contractors

Based on typical pricing models, the estimated average annual premium for Directors And Officers Insurance for businesses in the military armored vehicle, tank, and tank component manufacturing industry with NAICS code 336992 would be between $50,000 to $75,000. This pricing range takes into account factors like the size of the business, annual revenue, number of employees/directors, as well as the higher than average risk level associated with this type of defense manufacturing industry.

Estimated Pricing: $50,000 – $75,000

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) is an important protection for companies in the sensitive defense industry. EPLI helps businesses avoid potentially ruinous costs from lawsuits related to employment issues like discrimination, wrongful termination, harassment and retaliation by providing coverage for legal fees, compensation payments if claims are valid, and advisory services to strengthen practices.

Category List
Benefits
  • Protects against claims of wrongful termination, harassment, discrimination and other workplace issues
  • Covers legal fees to defend business from lawsuits regarding employment-related issues
  • Compensates for back pay, lost wages and other costs if claims are proven
  • Reduces stress for management from worrying about potential lawsuits
  • Provides expert legal guidance on employment policies and procedures to help prevent issues
  • Demonstrates commitment to employees and equal treatment in the workplace
Use Cases
  • Wrongful termination
  • Discrimination
  • Harassment
  • Retaliation

Based on typical rate indications from insurers for this industry, the estimated average annual premium for Employment Practices Liability Insurance would be around $15,000 – $20,000. Premium pricing is usually based on factors like number of employees, annual payroll, loss history, and risk control measures in place. Given that companies in this industry tend to have larger workforces and deal with sensitive defense contracts, their risk profile leads to rates on the higher end of average.

Estimated Pricing: $15,000 – $20,000

Conclusion

By carefully evaluating coverage needs and selecting from the top business insurance options explored here, manufacturers in the NAICS 336992 industry can help safeguard their operations and bottom line against losses specific to producing military technologies and equipment for defense contractors and governments around the world.

Frequently Asked Questions

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