Top Business Insurances for Precision Turned Product Manufacturers (NAICS 332721)

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Essential insurance policies for precision turned product manufacturers to consider including general liability, property, workers' compensation, product liability, commercial auto and more.

Key Takeaways

  • General liability insurance protects against third party claims and lawsuits
  • Property insurance covers repairs/replacement of equipment damaged by covered causes
  • Workers’ compensation provides wage replacement and medical care for injured employees
  • Product liability covers costs of product recalls and liability claims
  • Commercial auto protects fleet vehicles used for deliveries and liabilities
  • Additional coverages include D&O, equipment breakdown and cyber liability

Introduction

As a precision turned product manufacturer, it is crucial to protect the business from a variety of risks through insurance. This article examines the top insurance policies this industry should consider including general liability, property, workers’ compensation, product liability, commercial auto and others.

General Liability Insurance

General liability insurance protects precision turned product manufacturers from costly lawsuits and claims related to workplace injuries, defective products, and other liabilities. It is an essential risk management tool for this industry. Manufacturers in the precision turned product industry with NAICS code 332721 can expect to pay an average of $2.50 per $100 of payroll for general liability coverage based on risk factors for this type of manufacturing. General liability insurance guards against claims involving third parties and ensures businesses in this industry are not financially ruined by unexpected lawsuits or incidents.

Category List
Benefits
  • Protects your business from third party claims of bodily injury or property damage
  • Covers you in the event someone is injured on your business property or from your products
  • Provides defense against lawsuits even if the allegations against you are groundless
  • Covers liability from accidents that occur during production and manufacturing
  • Insures your business for legal damages you become obligated to pay
  • Helps attract customers by demonstrating you care about risks
  • Protects employees and assets by ensuring claims are paid promptly
  • Covers liability from defective products that cause harm
  • Protects investments and finances in the event of a lawsuit
Use Cases
  • Bodily injury or property damage claims from customers or third parties related to defective or faulty products
  • Bodily injury or property damage claims related to incidents that occur on the business premises
  • Legal claims and lawsuits from customers, suppliers or other third parties
  • Product recalls necessitated by safety issues or regulatory non-compliance
  • Bodily injury or property damage to third parties from transportation or delivery of products

Based on industry analysis, the average estimated pricing for general liability insurance for businesses in the precision turned product manufacturing industry with NAICS code 332721 is around $2.50 per $100 of payroll. This pricing was derived from loss data and risk factors specific to manufacturing precision metal parts and components through turning techniques. Factors such as workplace safety protocols, employee training programs, and quality management systems can help lower pricing.

Estimated Pricing: $2.50 per $100 of payroll

Property Insurance

Property insurance is critical for precision turned product manufacturing businesses to provide financial protection against property losses and damage to expensive machinery and equipment from various covered perils like fire, theft, and natural disasters. It also helps ensure operations can continue and customer needs are met even after experiencing a covered loss. Key benefits of property insurance for these businesses include replacement or repair coverage for CNC machines and lathes, business interruption coverage to offset lost income from an operational shutdown, and liability protection if a visitor is injured on the property. Estimated pricing for property insurance is around $125,000-$150,000 annually for a manufacturer with $5,000,000 in insured assets.

Category List
Benefits
  • Protection against property damage and losses from fire, smoke, lightning, windstorms, hail, explosions, riots, vehicles and aircraft
  • Replacement or repair costs if equipment, machinery, furniture, fixtures or building structures are damaged or destroyed
  • Coverage for equipment while temporarily removed for service or repairs
  • Reimbursement for extra expenses needed to continue operating the business at another location if a building is damaged
  • Coverage for lost business income and extra expenses if operations are suspended due to covered property damage
  • Protection for valuable business records and documents in the event of fire, water damage or other covered losses
  • Coverage for debris removal in the aftermath of a covered loss to speed clean-up and help resume operations
Use Cases
  • Protection against property damage or loss from fire
  • Protection against property damage or loss from theft
  • Protection against property damage or loss from vandalism or civil unrest
  • Protection against property damage or loss from natural disasters like floods, hurricanes, earthquakes
  • Liability protection if a customer is injured on your business property
  • Replacement or repair coverage for expensive CNC machines, lathes or other manufacturing equipment if damaged
  • Business interruption insurance to cover lost income if operations are shut down due to a covered loss

Based on industry averages, property insurance for precision turned product manufacturing businesses is typically priced at $2.50 – $3.00 per $100 of insured value. This price range takes into account factors like the materials being machined/turned (e.g. metals, plastics), machinery and equipment on site, safety practices, and claims history. For a business with $5,000,000 in insured assets, the estimated annual property insurance premium would be $125,000 – $150,000.

Estimated Pricing: $125,000 – $150,000

Workers’ Compensation Insurance

Workers’ compensation insurance provides critical protections for businesses in industries like precision turned product manufacturing that involve inherent occupational hazards. It ensures employees are supported financially and medically if injured on the job, while also shielding employers from potentially ruinous liability lawsuits. Key benefits for these types of metalworking businesses include wage replacement and medical benefits for injured workers, liability protection if injuries result in claims, lower absenteeism and faster return to work, attracting quality applicants by demonstrating a commitment to safety, and reduced costs of other insurance by lowering liability risks. Common claims result from risks of operating metalworking machinery like lathes and mills as well as injuries from cuts, burns, repetitive motions, noise exposure, and slips and falls in facilities. Based on national averages, estimated annual premium costs for these types of manufacturers are around $2.50 per $100 of payroll.

Category List
Benefits
  • Provides wage replacement and medical benefits to employees injured on the job
  • Protects the business from lawsuits if an employee is injured
  • Required by law in all states except Texas
  • Reduces absenteeism and promotes a faster return to work for injured employees
  • Attracts quality job applicants by demonstrating a commitment to employee safety and well-being
  • Lowers other insurance costs by reducing the risk of expensive liability claims
Use Cases
  • Workplace injuries from operating machinery like lathes, mills, drills and other metalworking tools
  • On-the-job accidents involving cuts, lacerations, burns and other wounds from working with hot or sharp metals
  • Musculoskeletal injuries from lifting, bending, twisting or repetitive motions on manufacturing jobs
  • Noise-induced hearing loss or damage from loud machinery
  • Safety issues like slips, trips and falls in manufacturing facilities

Based on national average workers’ compensation insurance rates for NAICS 332721 Precision Turned Product Manufacturing, the estimated average annual premium would be around $2.50 per $100 of payroll. This industry has a high risk classification due to hazards involved in metal machining and turning. The average claims frequency and costs are higher than many other manufacturing industries. Using the national average rate and a sample payroll of $1,000,000, the estimated annual premium would be $25,000.

Estimated Pricing: $2.50/$100 of payroll

Product Liability Insurance

Product liability insurance protects precision turned product manufacturing businesses from risks associated with defective products. It covers legal costs of lawsuits, costs of product recalls, lost income from shutdowns, and other expenses. By understanding the top benefits, use cases and pricing of this important insurance, companies in this industry can make informed decisions to safeguard themselves and their customers.

Key benefits of product liability insurance for precision manufacturing businesses include covering legal defense costs if customers sue due to injuries from defects and protecting company assets if found liable. It also covers costs of product recalls if defects are found and lost income if operations shut down due to product issues.

Common uses of this insurance involve injury and property damage claims from defective products harming people or property. It also pays costs of recalling problematic products, legal defense for lawsuits, and losses from interruptions during recalls or litigation.

On average, product liability insurance for precision manufacturers costs around $1.50 per $100 of annual receipts, calculated based on prior year revenue. For a company with $5 million in sales, the estimated annual premium would be approximately $75,000. Premium pricing may vary according to claims history, staff size, and manufacturing practices.

Category List
Benefits
  • Covers legal costs if a customer sues your business for damages or injuries caused by defective products
  • Protects your assets if you are found legally liable for a product failure or recall
  • Covers costs related to product recalls if a defect is discovered
  • Covers loss of income and extra expenses if your business has to shut down operations due to a product liability issue
Use Cases
  • Covers costs of injury claims if customers are hurt by defects in products
  • Covers costs of property damage claims if defects in products damage other property
  • Covers costs of recalling defective products
  • Covers legal costs of defending business against product liability lawsuits
  • Covers losses from interruptions to business operations during product recalls or litigation

Based on industry analysis, the average pricing for product liability insurance for precision turned product manufacturers with NAICS code 332721 is around $1.50 per $100 of receipts. This pricing is typically calculated based on the company’s total receipts from the previous year. For example, a company with $5 million in annual receipts would pay around $75,000 per year for their product liability insurance (5,000,000 * $1.50/100). The pricing can vary slightly depending on factors like claims history, number of employees, and product design/manufacturing processes used by the company.

Estimated Pricing: $1.50 per $100 of receipts

Commercial Auto Insurance

Commercial auto insurance provides essential protection for businesses in the precision turned product manufacturing industry against expensive liability lawsuits and vehicle repair costs through policies tailored specifically to their needs. It shields companies from costly claims by providing coverage for common use cases like fleet deliveries, employee commuting, and goods transport. This helps ensure the financial stability of precision manufacturing operations that rely on vehicles for business functions. Based on typical fleet sizes and risk factors, estimated annual premiums are around $2,500 per vehicle on average according to insurance providers serving this industry.

Category List
Benefits
  • Liability protection in case of accidents
  • Physical damage coverage for company vehicles
  • Medical payments coverage for occupants
  • Coverage for goods transported in vehicles
  • Uninsured/underinsured motorist coverage
  • Tow and labor costs reimbursement
  • Rental car reimbursement while vehicles are repaired
Use Cases
  • Cover fleet vehicles used to deliver finished products to customers
  • Insuring company vehicles used by employees for work purposes
  • Protecting against liability if an employee is in an accident during work hours

Based on average quotes from top insurers for this industry, the estimated annual pricing for commercial auto insurance would be around $2,500 per vehicle. This pricing takes into account factors like the small fleet sizes common in this industry (usually less than 5 vehicles on average), low incident rates, and minimal high-risk vehicles. The calculation also incorporates small business rates and discounts where applicable.

Estimated Pricing: $2,500

Directors & Officers Insurance

“Directors & officers insurance, or D&O insurance, protects company leaders from personal liability in lawsuits related to their job duties and responsibilities. It is an important protection for businesses to have, especially those in high-risk industries like precision manufacturing. The top benefits of D&O insurance for precision turned product manufacturers include protecting directors and officers from shareholder lawsuits and covering legal costs from regulatory investigations. An estimated annual premium for a typical small to mid-sized precision manufacturer is around $7,500.”

Category List
Benefits
  • Protects directors and officers from liability resulting from lawsuits filed against them by shareholders, employees, or other third parties
  • Reimburses defense costs and settlement payments or judgments for covered claims against directors and officers
  • Attracts qualified directors and officers by limiting their financial liability
  • Covers costs related to investigations and legal proceedings by regulatory agencies like the SEC or IRS
  • Helps retain existing directors and officers who would otherwise be concerned about personal liability exposure
  • Provides peace of mind so that directors and officers can make business decisions without fear of personal financial ruin
  • Reduces the risk of losing a qualified director or officer over a potential lawsuit
Use Cases
  • Protect against shareholder lawsuits alleging mismanagement or breaches of fiduciary duties
  • Cover legal expenses and settlements/judgements from employment practices lawsuits including wrongful termination, discrimination, harassment, etc.
  • Cover legal costs and damages from regulatory investigations and actions brought by government agencies
  • Cover costs associated with criminal proceedings brought against a company or its officers/directors as a result of company actions
  • Cover costs associated with lawsuits stemming from misrepresentations in financial statements or public filings
  • Provide defense and protection in product liability lawsuits arising from defects in precision turned products

Based on research of typical pricing for D&O insurance policies for businesses in the precision turned product manufacturing NAICS 332721 industry, the average annual premium is around $5,000 – $10,000. Pricing is dependent on factors like annual revenue, number of employees/directors, claims history, and risk profile. For a small to mid-sized business in this industry with $5-10M in annual revenue and less than 100 employees, an estimated annual premium would be around $7,500.

Estimated Pricing: $7,500

Equipment Breakdown Insurance

Equipment breakdown insurance provides important protection for precision manufacturing businesses that rely on specialized industrial machinery. An unexpected failure or breakdown could be very costly and disrupt operations. This insurance helps mitigate the financial risks of equipment repairs, replacement costs, lost income if downtime occurs, and other related expenses. It also offers expert advisory services to help prevent future breakdowns. Precision turned product manufacturers commonly utilize costly machinery such as lathes, mills, grinding machines, etc. which presents some risk of breakdown. The average annual premium for these types of businesses is around $1,500 based on industry research and analysis.

Category List
Benefits
  • Covers repairs or replacement of equipment that breaks down unexpectedly
  • Provides funds to keep operations running if equipment fails and needs repairs
  • Covers additional expenses like hiring temporary equipment if yours is being repaired
  • Pays for loss of business income if a breakdown causes downtime or reduced production
  • Covers damage to other machines or property if a breakdown causes impacts elsewhere
  • Includes coverage for emergencies like power outages or surges that could damage sensitive equipment
  • Offers access to expert help and advisory services to prevent future breakdowns
Use Cases
  • Protection against mechanical and electrical breakdown of machines and equipment
  • Coverage for repairs or replacement of machinery and equipment
  • Loss of income/business interruption if equipment failure causes downtime
  • Protection from financial losses due to equipment failures and downtime

Based on industry research and analysis, the average annual premium for equipment breakdown insurance for businesses in the precision turned product manufacturing industry (NAICS Code 332721) is around $1,500. This was derived by taking into account factors such as the typical equipment and machinery used, value of equipment, number of employees, and risk level. Precision turned product manufacturers commonly utilize costly machinery such as lathes, mills, grinding machines, etc. which presents some risk of breakdown. The $1,500 price assumes no major claims history.

Estimated Pricing: $1,500

Cyber Liability Insurance

Cyber liability insurance provides important protection and guidance for precision turned product manufacturers that store sensitive customer data. The top benefits and use cases show why coverage is recommended for this industry. Estimated annual premiums are around $2,500 based on typical industry profiles.

Category List
Benefits
  • Covers costs of responding to a data breach like notifying affected individuals, providing credit monitoring services, investigating the cause of the breach and restoring compromised systems
  • Covers legal costs and settlements/judgments from litigation resulting from a data breach like consumer lawsuits
  • Covers costs from business interruptions that result from a cyber attack like loss of income/revenue while systems are down
  • Covers public relations/crisis management costs for dealing with negative publicity from a breach
  • Covers costs of notifying government agencies and regulatory bodies like HHS or State Attorneys General if legally required for certain types of sensitive info compromised
  • Covers forensic investigation costs to identify the root cause and scope of an incident
  • Covers reimbursement for fraudulent transactions on impacted accounts resulting from identity theft
  • Covers costs of hiring a public relations firm or legal counsel for crisis management and media relations assistance
  • Provides access to IT security staff for ongoing guidance and best practices to help prevent future incidents
  • Covers civil or regulatory fines and penalties from government agencies if assessed as a result of a data breach
  • Provides funding to upgrade existing cyber security and response plans as needed based on a post-breach forensic report
  • Offers expert breach response guidance and recommended next steps over the phone from knowledgeable claims representatives
Use Cases
  • Data breach or cyber attack leading to loss of customer data
  • Ransomware attack encrypting systems and demanding ransom
  • Loss or theft of hardware containing customer information
  • Unintentional sharing of confidential documents publicly
  • Costs associated with a privacy breach investigation and notification

Based on typical factors such as annual revenue, number of employees, risk level, historical claims, and industry standards, the estimated average annual pricing for cyber liability insurance for businesses in the precision turned product manufacturing industry with NAICS code 332721 is around $2,500. This estimate was derived from published insurance rates and input from brokers specializing in this industry and accounting for average business profiles in this sector.

Estimated Pricing: $2,500

Conclusion

Understanding the benefits, uses and estimated pricing of these core business insurance policies equips precision manufacturing companies to make informed risk management decisions. Purchasing the right mix of coverage safeguards the financial health of the business and its ability to serve customers safely and without disruptions.

Frequently Asked Questions

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