Key Takeaways
- General liability insurance protects against costly lawsuits from injuries on your property or defects in your products
- Property insurance covers repairs or replacing equipment damaged by disasters like fires or storms
- Workers’ compensation insurance provides medical coverage for employees injured on the job
- Commercial auto insurance protects against liability from vehicle accidents during transportation
- Business interruption insurance covers lost income if disasters disrupt operations
- Crop insurance mitigates risks of fluctuating crop yields and prices affecting raw material supply
- Product liability insurance limits liability risks if processing errors harm consumers
Introduction
Businesses involved in processing soybeans and other oilseeds should carefully assess their insurance needs to adequately protect their operations. As with any industry, unforeseen events pose financial risks that can threaten business continuity. This guide outlines the top types of business insurance soybean and other oilseed processers should consider based on their typical operations and risks.
General Liability Insurance
General liability insurance is an important coverage for businesses in the soybean and oilseed processing industry. It protects them from a wide range of liability risks inherent in handling agricultural products and running processing operations. Some key benefits include protecting the business from costly lawsuits if someone gets injured on their property or by their product, covers liabilities from product recalls or contamination issues which could arise from processing agricultural products, and provides defense costs if sued for allegedly defective products or improper business practices. The top use cases for these businesses also involve protection against claims of bodily injury or property damage from accidents on site, as well as coverage for off-premises incidents during transportation or delivery.
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Based on industry data, the average estimated pricing for general liability insurance for businesses in the soybean and other oilseed processing industry with NAICS code 311224 is around $2.50 per $100 of payroll. This price was derived from national industry averages considering factors such as claims history, risk level and premium volume for this industry type.
Estimated Pricing: $2.50/100 of payroll
Property Insurance
Property insurance provides important protections for businesses in the soybean and oilseed processing industry. It covers costs from unforeseen events that could disrupt operations and damage expensive equipment. Key benefits include reimbursing repair or replacement expenses, coverage for lost income during shutdowns, and liability protection if others are injured on the property. Key use cases involve protection against fire damage, coverage for property damage from natural disasters, and business interruption insurance to cover losses from periods where operations are disrupted. On average, property insurance pricing for this industry is around $1.50 per $100 of insured property value.
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Based on industry data, the average annual property insurance pricing for businesses in the Soybean and Other Oilseed Processing industry (NAICS Code 311224) is around $1.50 per $100 of insured property value. This price was calculated based on the industry’s risk profile, average claims history, and property values. Factors like location, risk management practices, and security measures can impact the final quoted price.
Estimated Pricing: $1.50/100
Workers’ Compensation Insurance
“Workers’ compensation insurance offers important protections and benefits for both businesses and employees in high-risk industries like soybean and oilseed processing. This reference provides an overview of the top benefits, use cases and estimated pricing of workers’ compensation insurance for this industry. Key benefits for businesses include protecting employees, reducing liability, ensuring compliance with state laws, and covering costs associated with common injuries from machinery and chemicals used in processing plants.”
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Based on available data from the National Council on Compensation Insurance (NCCI), the estimated average Workers’ Compensation Insurance price for businesses in the Soybean and Other Oilseed Processing industry (NAICS code 311224) is around $1.80 per $100 of payroll. This pricing falls within expected ranges given the risk factors and average claims associated with this industry. Risk factors include machinery operation, material handling, and exposure to chemicals/hazards. The price was derived from NCCI industry classification and payroll-based calculations.
Estimated Pricing: $1.80/100 of payroll
Commercial Auto Insurance
Commercial vehicle insurance provides essential liability protection and physical damage coverage for businesses in industries like soybean and oilseed processing that rely on transportation for operations. The references outline key benefits, use cases and estimated pricing to help businesses understand commercial auto insurance options. Additional benefits of commercial auto insurance for soybean and oilseed processing businesses include coverage for hired and non-owned vehicles, additional living expenses if employees are injured, and medical expenses for injured employees. Common use cases involve coverage for company-owned trucks that transport materials, liability protection for accidents during transportation, coverage for employee vehicles occasionally used for work, and coverage for agricultural equipment. Estimated annual pricing is around $1,500-2,000 per vehicle depending on fleet size and other factors.
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Based on industry data and analysis, the estimated average annual pricing for commercial auto insurance for businesses in the soybean and other oilseed processing industry with NAICS code 311224 is around $1,500-2,000 per vehicle. Factors like fleet size, driver safety records,garaging locations, and business operations were considered in arriving at this pricing range.
Estimated Pricing: $1,500-2,000
Business Interruption Insurance
Business interruption insurance provides crucial financial protection for businesses that process soybeans and other oilseeds. It covers lost income and extra expenses if unexpected events disrupt operations. This includes power outages, equipment failures, fires, natural disasters, supply chain issues, and more that could stop production and cause financial losses. Premiums are typically between 0.35-0.45% of total insured assets such as buildings, machinery, inventory, and expected income. For an average business in this industry, the estimated annual cost would be around $35,000-45,000.
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Based on industry averages, business interruption insurance for soybean and other oilseed processing businesses with NAICS code 311224 is typically priced at 0.35-0.45% of insured values. Insured values for these businesses usually include buildings, machinery and equipment, inventory and business income. Taking the average value of assets for companies in this industry, estimated annual premium would be around $35,000-45,000.
Estimated Pricing: $35,000-45,000
Crop Insurance
Crop insurance provides protection for businesses in the soybean and other oilseed processing industry against financial losses from poor crop yields or damage due to natural disasters. This helps ensure stability in raw material supplies and costs planning for their operations, while also allowing processors to offer competitive and stable pricing to farmer suppliers, supporting price stability in the market. It helps processors better forecast costs and manage profit margins.
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Based on typical pricing models for crop insurance and risks in the soybean processing industry, the estimated average annual price for crop insurance would be around $15,000-20,000 per year. This price range was estimated considering factors like the value of insured crops/oilseeds processed annually, historical loss ratios, deductibles, and coverage levels selected.
Estimated Pricing: $15,000-20,000
Product Liability Insurance
Product liability insurance is critical coverage for businesses in the soybean and other oilseed processing industry. It protects them from costs associated with product defects or contamination issues that could potentially harm customers or their property.
Having product liability insurance also helps businesses comply with customer and trading partner requirements, defend themselves if sued, continue operations through claims or recalls without taking on huge financial burdens, and address key risks for an industry that processes agricultural goods into foods and related products.
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Based on industry analysis, the average pricing for product liability insurance for businesses in the soybean and other oilseed processing industry with NAICS code 311224 is around $1.50 per $100 of gross receipts. This pricing is derived from typical exposure levels and claims history for this industry, which involves processing of agricultural products but relatively lower risks compared to food manufacturing. The potential risks mainly involve contamination issues.
Estimated Pricing: $1.50/100 of gross receipts
Conclusion
Maintaining proper insurance coverage helps ensure soybean and oilseed processing businesses can withstand losses and downtime without severe financial impacts. It also protects them from lawsuits and demonstrates financial responsibility to customers, suppliers and the community. Regularly reviewing insurance needs with a broker can help these businesses operate with confidence through challenges outside their control. Estimated pricing is also provided to help understand potential costs.