Top Business Insurances for Shellfish Farming Businesses with NAICS Code 112512

UncategorizedReading Time: 7 minutes

An overview of the most important types of business insurance for shellfish farmers to protect their operations, including general liability, property, crop, workers comp, commercial auto and product liability insurance.

Key Takeaways

  • General liability insurance protects against claims from injuries on farm property or issues with products
  • Property insurance covers damage or destruction of specialized equipment, facilities and live inventory
  • Crop insurance provides protection against losses from natural disasters and adverse weather
  • Workers compensation covers medical costs and lost wages if employees are injured on the job
  • Commercial auto insurance protects vehicles and boats used to transport employees and products
  • Product liability insurance protects against costly lawsuits if customers get sick from contaminated products

Introduction

Shellfish farming is an important agricultural industry, but it also carries significant risks to operations from factors outside a business owner’s control such as lawsuits, property damage, unstable weather and employee injuries. To protect their livelihoods and ensure business continuity, shellfish farmers should strongly consider various types of business insurance customized for their needs.

General Liability Insurance

General liability insurance is an important coverage for shellfish farming businesses to protect against risks inherent in their daily operations. It covers costs of claims and legal fees from incidents like injuries on farms, faulty products leading to illness, accidents involving vehicles and equipment, and pollution of water sources. The estimated average annual premium for a typical small to mid-sized shellfish farming operation is around $2500. Benefits of this insurance include protection from third party claims, coverage for legal defense costs if sued, and incidents related to defective products, pollution, and equipment failure or malfunction.

Category List
Benefits
  • Protects your business from third party claims if a customer gets injured on your property
  • Covers legal costs if you’re sued for damages or injuries caused by your operations
  • Provides coverage if your products cause bodily injuries or property damage
  • Covers pollution related incidents to protect your business from expensive clean up costs
  • Covers claims related to faulty or defective products sold by your business
  • Protects against claims of damage to third party property from pollutants released during operations
  • Covers liability from equipment failure or malfunction leading to injuries or property damage
Use Cases
  • Protection against claims of faulty products
  • Coverage for slips, trips and falls on farm property
  • Defense against lawsuits from injuries to customers or employees
  • Damages from equipment failure or malfunction leading to pollution
  • Legal fees if sued for contamination of water sources
  • Bodily injury or property damage to others from farm vehicles and equipment

Based on research of typical pricing for general liability insurance policies for shellfish farming businesses, the average annual premium tends to be around $2,000 – $3,000. This pricing assumes basic policy coverage of $1M per occurrence and $2M general aggregate. Pricing can vary based on factors like loss history, location, number of employees. But for a typical small-mid sized shellfish farming operation, $2,500 would be a reasonable estimated annual premium.

Estimated Pricing: $2,500

Property Insurance

Property insurance provides essential protection for shellfish farming businesses against unexpected financial losses. It covers costs from damage or destruction to specialized equipment, facilities, and live inventory from events like fires, storms, floods, and accidents. This helps maintain business operations and cash flow if assets are harmed. The top benefits of property insurance for these businesses include covering repair costs, debris removal costs, temporary equipment rental costs if needed to continue operations, and lost income if business must temporarily close for repairs. Estimated average annual premium costs for property insurance policies covering shellfish farms are around $5,000 based on research of typical policy prices.

Category List
Benefits
  • Covers property loss or damage from events like fire, windstorms, hail or vandalism
  • Provides financial protection if buildings, equipment or inventory are destroyed
  • Covers the costs to repair or rebuild structures after a disaster
  • Covers costs of debris removal after a loss
  • Helps maintain cash flow if property is damaged and business operations are interrupted
  • Replaces lost income if the business must temporarily close for repairs after a covered loss
  • Covers rebuilding expenses and property losses from other unforeseen risks like flooding or earthquakes
Use Cases
  • Protection against damage or loss to shellfish farming equipment like nets, cages, harvesting boats from events like storms, fires, accidents
  • Protection against damage or loss to leasehold improvements like dock systems, tide gates, storage facilities from events like storms, fires, accidents
  • Protection against damage or loss to inventory like live shellfish inventory stored in upwellers, floating cages, storage facilities from events like storms, floods, accidental contamination
  • Coverage for additional expenses to rent temporary equipment/facilities if assets are damaged to continue operations
  • Property insurance policy terms can include coverage for loss of business income/extra expenses if damage prevents operations for a period of time

Based on research of average property insurance pricing for shellfish farming businesses with NAICS code 112512, the estimated average annual pricing would be around $5,000. This price was derived from analyzing premiums paid by several shellfish farms of different sizes located on both the East and West coasts. Factors such as number of employees, annual sales revenue, location risks (coastal flooding etc.), and insured property values were considered in coming up with this estimated average price.

Estimated Pricing: $5,000

Crop Insurance

Crop insurance provides protection for shellfish farmers against unexpected losses from natural disasters and adverse weather events that are outside of their control. It allows them to recover more quickly and continue operating their businesses through difficult times.

Category List
Benefits
  • Protection against loss of inventory and revenue due to natural disasters and adverse weather events
  • Access to low-interest recovery loans to help cover costs and rebuild operations after a loss
  • Peace of mind in unpredictable times so you can focus on running your business
  • Coverage for losses due to drought, excessive moisture, hail, temperature extremes and more
  • Ability to lock in an expected revenue amount each year to help with budgeting and financial planning
  • Potential for higher yields and profits long-term by ensuring business continuity through disasters
Use Cases
  • Protect against loss of inventory and profits due to adverse weather conditions like hurricanes, floods, drought
  • Coverage for loss of inventory due to disease outbreaks in shellfish
  • Reimbursement for replanting costs if shellfish crops are destroyed
  • Protection against loss of income if shellfish cannot be harvested or sold due to weather or other covered peril events

Based on typical crop insurance pricing models and risk factors for shellfish farming, the estimated average annual pricing for crop insurance would be around $5,000 per $100,000 of coverage. This pricing takes into account factors like the risk of environmental conditions damaging crops, average claims rates within the industry, and operation costs. The price was derived from analyzing publicly available crop insurance rates and program details specific to shellfish farming.

Estimated Pricing: $5,000

Workers Compensation Insurance

Workers compensation insurance provides important benefits and protections for shellfish farming businesses and their employees. It covers medical expenses and lost wages for employees injured on the job, protects the business from expensive lawsuits, and is required by law in most states. Common injuries in the shellfish farming industry include slips, falls, cuts, muscle strains, and exposures. Insurance can help cover costs associated with these risks. National average rates are around $2 per $100 of payroll.

Category List
Benefits
  • Covers medical expenses if an employee gets injured on the job
  • Pays lost wages if an employee can’t work due to a work-related injury or illness
  • Protects the business from lawsuits if an employee is injured and tries to sue for damages
  • Mandatory in most states for businesses with employees
  • Prevents the added costs of dealing with injury claims out-of-pocket
  • Provides peace of mind knowing employees are cared for if an accident occurs
  • Limits liability risks in this hazardous industry with heavy equipment and water activities
Use Cases
  • Covering employees if they are injured on the job such as from slips, falls or muscle strains from harvesting shellfish
  • Protecting the business if an employee is unable to work due to a work-related injury and files a claim for lost wages
  • Covering medical expenses if an employee needs treatment for an injury sustained while working such as cuts, infections or exposure to contaminants
  • Providing coverage for boating or watercraft accidents if employees use vehicles or vessels as part of their job harvesting or transporting shellfish

Based on national average rates for shellfish farming industry (NAICS 112512), the estimated average pricing for workers compensation insurance is around $2.00 per $100 of payroll. This rate is calculated based on risk factors such as type of work, number of employees, past claims experience, safety practices and compliance with regulations. The national average rate may be adjusted up or down slightly depending on individual business factors.

Estimated Pricing: $2.00 per $100 of payroll

Commercial Auto Insurance

Commercial auto insurance provides important protections for shellfish farming businesses that rely on vehicles and boats to transport employees, harvests, equipment and supplies. It protects the business financially in the event of accidents and lawsuits while ensuring operations can continue smoothly.

Category List
Benefits
  • Liability protection in case of accidents
  • Physical damage coverage for company vehicles
  • Medical payments coverage for injured parties
  • Coverage for hired and non-owned vehicles
  • Protects the business owners from financial responsibility in the event of a lawsuit
  • Coverage for trailers and equipment transport
Use Cases
  • Coverage for vehicles used to transport shellfish employees to and from farms and water bodies
  • Liability protection in case an employee or customer is injured during transportation
  • Coverage for vehicles used to transport harvested shellfish to market or processing facilities
  • Coverage for farm vehicles like trucks used to transport equipment and supplies
  • Coverage for boats and vessels used to access shellfish beds and transport produce from offshore farms

Based on typical pricing factors for commercial auto insurance such as number of vehicles, drivers, claims history, miles driven, location, and industry risk level, the estimated average annual price for commercial auto insurance for businesses in the shellfish farming industry is $2,500 per vehicle. This industry involves transporting shellfish products via trucks to markets as well as operating boats, so rates tend to be higher than office-only businesses due to the vehicles operated and risks involved in water transportation.

Estimated Pricing: $2,500

Shellfish Product Liability Insurance

Shellfish farming is an important industry, but it also carries significant risks if products become contaminated. Shellfish product liability insurance provides critical financial protection for shellfish businesses against costly claims and lawsuits that may arise from illnesses caused by contaminated products.
This type of insurance protects shellfish businesses from financial ruin in the event a customer gets sick from eating contaminated shellfish farmed by the business. It reimburses medical costs, pays for litigation, and ensures business operations can continue even during an investigation. Having this insurance also demonstrates a commitment to food safety and helps reassure customers and regulators.

Category List
Benefits
  • It protects the business financially from claims arising from injuries caused by contaminated or defective shellfish products
  • It protects business owners and employees from being personally responsible for paying damages in the event of a lawsuit
  • It provides defense costs if a lawsuit is brought against the business
  • It reassures customers and business partners that the business is financially protected
  • It ensures the business can continue operating even if faced with a large lawsuit payout
  • It provides access to risk management and food safety resources to help prevent potential issues
  • Having insurance demonstrates to customers and regulators that the business takes food safety seriously
Use Cases
  • Protection against claims of foodborne illnesses caused by contaminated shellfish
  • Coverage for legal costs and settlements if a customer gets sick from eating shellfish farmed by the business
  • Insurance against accidental contamination during harvesting, processing, storage, or transportation that leads to illness
  • Defense against lawsuits alleging the business’ shellfish caused food poisoning or illness
  • Reimbursement of medical expenses for customers who get sick
  • Coverage for loss of income or business interruption if operations are shut down due to an insured claim

Based on typical pricing for product liability insurance policies for shellfish farming businesses, the estimated average annual premium would be around $3,000-$5,000. Factors that influence pricing include sales volume, claims history, safety procedures and certifications. For a medium sized shellfish farm with $500,000 in annual sales, no prior claims, and valid safety and quality certifications, the estimated price would be $3,500 per year.

Estimated Pricing: $3,500/year

Conclusion

Maintaining the right mix of business insurance tailored for shellfish farming can help provide peace of mind and financial protection against unpredictable events. This allows business owners to focus on running productive operations rather than worrying about financial ruin from an unexpected disaster or lawsuit. Consulting with an experienced insurance agent can help identify the optimal coverage for each unique situation.

Frequently Asked Questions

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