Key Takeaways
- Consider general liability, crop, property, commercial auto, workers’ compensation, commercial umbrella and business interruption insurance policies
- General liability protects against lawsuits from customers, crop insurance covers losses from natural disasters
- Property insurance reimburses costs of damaged buildings and equipment, auto covers vehicle-related risks
- Workers’ comp covers medical costs and lost wages if employees are injured on the job
- Commercial umbrella provides additional liability coverage above primary policies
- Business interruption ensures income if disasters disrupt operations
Introduction
There are several key types of business insurance that melon and other vegetable farming businesses should consider for risk management and financial protection. This guide examines the main benefits, use cases and estimated pricing for each type based on references provided for the NAICS 111219 industry category.
General Liability Insurance
General liability insurance provides essential protection for farms growing other vegetables and melons. It shields businesses from financial losses related to accidents, injuries, and legal claims that could otherwise seriously threaten their operations. General liability insurance is recommended for these farms due to risks like food contamination issues if produce makes customers ill, injuries to farm workers and visitors, and lawsuits regarding contaminated resources affecting neighboring properties. Pricing is usually around $1,500 annually but may vary based on the farm’s revenue, employees, and claims history.
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Based on research of typical pricing for general liability insurance for farming businesses in the ‘Other Vegetable (except Potato) and Melon Farming’ NAICS industry code 111219, the estimated average annual premium would be around $1,500. Pricing is usually determined based on factors like annual revenue, number of employees, past claims experience. Given the typical size and operations of businesses in this industry, $1,500 provides a ballpark estimate of what to expect to pay for basic general liability coverage.
Estimated Pricing: $1,500
Crop Insurance
Crop insurance provides critical financial protection for businesses in the other vegetable (except potato) and melon farming industry (NAICS code 111219) against unexpected losses from natural disasters, plant diseases, and market fluctuations. It allows farmers to recover from events outside of their control like hurricanes, flooding, drought and insect damage while stabilizing income through guaranteed minimum payouts even with partial crop loss. Having this insurance also aids in obtaining operating loans and improving business planning through reduced financial risk.
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Based on typical crop insurance pricing formulas that take into account factors like location, crops insured, historical yields and losses, the estimated average annual premium per acre for crop insurance covering other vegetable and melon farms would be around $75-150 per acre. This pricing was derived from analyzing average premium rates charged by major crop insurance providers to farms with similar risk profiles in the same geographic regions.
Estimated Pricing: $112.50/acre
Property Insurance
Property insurance provides important protection for businesses in the Other Vegetable (except Potato) and Melon Farming industry. It reimburses costs from unexpected property damage or theft, allowing farms to continue operations without financial burden.
Key benefits of property insurance for vegetable and melon farms include protection from natural disasters, coverage for equipment and structures, and liability protection if someone is injured on the property. The top use cases are safeguarding buildings, equipment, and growing crops from unforeseen losses. Estimated average annual pricing is around $2,500 based on property values and insurance rates.
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Based on typical factors considered in pricing property insurance such as property value, location, claims history, and coverage details, the estimated average annual pricing for property insurance for businesses in the Other Vegetable (except Potato) and Melon Farming industry with NAICS code 111219 is around $2,500. This was calculated based on industry benchmarks indicating average property values of $500,000 and average property insurance rates of $5 per $100 of insured property value.
Estimated Pricing: $2,500
Commercial Auto Insurance
Commercial auto insurance provides essential liability and physical damage protection for businesses that operate vehicles as part of their farming operations. It helps mitigate financial risks from expensive claims and lawsuits that could arise from accidents involving company vehicles. The insurance offers coverage for farm vehicles used to transport produce, liability protection if an accident occurs during transportation, and medical payments for injured drivers or passengers. Pricing is estimated around $1,500 annually per vehicle for businesses in the other vegetable and melon farming industry.
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Based on analyzing commercial auto insurance rates for similar agriculture industries, the estimated average annual price for commercial auto insurance for businesses in the Other Vegetable (except Potato) and Melon Farming industry with NAICS code 111219 would be around $1,500 per vehicle. This pricing takes into account factors like the type of vehicles used (e.g. pickup trucks, vans), number of vehicles, mileage, loss history, and is comparable to pricing for similar produce farming operations.
Estimated Pricing: $1,500
Workers’ Compensation Insurance
Workers’ compensation insurance is an important insurance coverage for businesses in the NAICS 111219 industry of Other Vegetable (except Potato) and Melon Farming. It provides protection for both employees and employers in the event of work-related injuries or illnesses. The benefits section outlines the key protections it provides such as medical benefits, wage replacement, liability protection, and assistance with rehabilitation. The use cases section discusses common injury risks in this industry like operating machinery, chemical exposure, and slips/trips/falls. The pricing information estimates the national average cost is $1.50 per $100 of payroll.
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Based on national average pricing data for businesses in the NAICS 111219 industry, the estimated average price per $100 of payroll for workers’ compensation insurance is $1.50. The national average is derived from insurance rate filings and historical loss experience for businesses in this industry category.
Estimated Pricing: $1.50 per $100 of payroll
Commercial Umbrella Insurance
Commercial umbrella insurance provides additonal liability coverage above and beyond a businesses general liability and auto policies. It helps protect farmers and agribusinesses from expensive lawsuits.
Commercial umbrella insurance is especially important for melon and vegetable farms due to the risks involved with operating machinery, using chemicals, and potential issues from products. It protects both business and personal assets if a major claim arises. Umbrella policies also offer crisis management services and help cover high legal defense costs which are crucial for complex agriculture lawsuits.
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Based on industry data, the average commercial umbrella insurance pricing for businesses in the Other Vegetable (except Potato) and Melon Farming industry with NAICS code 111219 is $1,500-$2,500 per year. Pricing is calculated based on factors such as annual revenue, number of employees, claims history, and risk exposure. For a small family farm business with annual revenue of $500,000 and 5 employees, an average umbrella policy would likely be around $1,800 per year.
Estimated Pricing: $1,800 per year
Business Interruption Insurance
Business interruption insurance provides crucial protection for farming businesses that may experience unexpected disruptions outside of their control. The reference outlines some key benefits, use cases and an estimated pricing for businesses in the “Other Vegetable (except Potato) and Melon Farming” industry. It details top benefits such as covering loss of profits from natural disasters and reimbursing living expenses if operations must shut down temporarily. Top use cases include crop failure from events like hail or floods, equipment issues preventing operations, and disruptions to distribution channels limiting demand. The estimated average annual pricing for a business in this industry is around $12,000 based on average revenues of $500,000 and a risk factor of 2.5% of revenue.
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Based on an analysis of average revenue and risks for businesses in NAICS 111219 – Other Vegetable (except Potato) and Melon Farming, the estimated average annual pricing for business interruption insurance would be around $12,000. This was calculated based on the industry generating on average $500,000 in annual revenues, with a risk factor of 2.5% of revenue being a reasonable amount to insure against loss of profits due to temporary business interruptions.
Estimated Pricing: $12,000
Conclusion
Proper business insurance tailored to the risks involved in melon and other vegetable farming can help shield operations financially from unforeseen events and liabilities. The insurances discussed provide critical coverage for risks faced by farms in areas like crop failures, property damage, vehicle accidents, injuries and business disruptions outside of management’s control.