Key Takeaways
- General liability insurance protects against injury and property damage claims
- Property insurance covers repair/replacement costs if facilities or equipment are damaged
- Workers’ compensation covers medical costs and lost wages for injured employees
- Commercial auto covers fleet vehicles used for transporting materials and products
- Product liability protects against costs of defective products causing harm
- Business interruption ensures funds to continue operating if shut down
- Commercial umbrella provides additional liability coverage above primary limits
Introduction
Veneer, plywood and engineered wood product manufacturers face unique risks associated with operating sawmills, woodworking machinery and handling flammable materials. To protect their businesses and continue operations smoothly, certain types of insurance are essential. This guide covers the top business insurance policies wood manufacturers should consider based on their industry needs and risk exposures.
General Liability Insurance
General liability insurance offers essential protection for businesses in the veneer, plywood, and engineered wood product manufacturing industry from a variety risks and accidents that could result in costly claims. It covers costs associated with bodily injury, property damage, medical expenses and legal defense resulting from accidents on their premises or involving their products. Common risks in this industry include heavy machinery accidents, slip and falls, chemical spills, product defects, and issues related to hazardous materials storage and handling.
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Based on average data, general liability insurance for businesses in the veneer, plywood, and engineered wood product manufacturing industry with NAICS code 3212 is estimated to be around $2.50 per $100 of payroll. This estimation was derived from industry reports on insurance pricing for similar wood manufacturing businesses, taking into account factors such as the level of risk involved in woodworking operations as well as common claims in this industry.
Estimated Pricing: $2.50/100 of payroll
Property Insurance
Property insurance provides key coverage and financial protection for businesses in the veneer, plywood, and engineered wood product manufacturing industry that utilize specialized and expensive equipment in their operations. It protects against losses from fires, storms and other incidents that could damage property and disrupt business activities. Property insurance also protects veneer, plywood, and engineered wood product manufacturers from significant financial losses by covering repair and replacement costs for buildings, machinery, inventory and other business property damaged in covered incidents like fires, storms or floods. It also provides funding to continue operating expenses if the business must temporarily shut down for repairs after such an event.
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Based on industry data and average claims, the estimated annual pricing for property insurance for businesses in the veneer, plywood, and engineered wood product manufacturing industry with NAICS code 3212 would be around $4.50 per $100 of insured assets. This price factors in the higher risk of fire or other property damage incidents associated with woodworking machinery and facilities that handle combustible materials.
Estimated Pricing: $4.50 per $100 of insured assets
Workers’ Compensation Insurance
Workers’ compensation insurance provides essential coverage for businesses in the veneer, plywood, and engineered wood product manufacturing industry (NAICS Code 3212). This industry involves potentially dangerous work operating heavy machinery and around wood materials, putting employees at risk for injuries like cuts, burns, and respiratory issues. Top benefits of this insurance include covering medical expenses and lost wages for injured employees, protecting companies from costly liability lawsuits, and offering premium discounts for strong safety records. Common injuries this industry faces include exposures to wood dust leading to respiratory illness, cuts from machinery, lifting strains, falls, and burns from hot surfaces or fire. It ensures compensation for employees without needing to prove fault while shielding employers from expensive litigation. Based on national averages, the average estimated cost is around $4.50 per $100 of payroll.
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Based on national averages, the estimated average pricing for workers’ compensation insurance for businesses in the veneer, plywood, and engineered wood product manufacturing industry (NAICS Code 3212) is around $4.50 per $100 of payroll. This price was derived based on risk factors such as type of industry, average accident rates, claims filed, and costs of injuries common to this industry which involves work with heavy machinery and wood materials.
Estimated Pricing: $4.50 per $100 of payroll
Commercial Auto Insurance
Commercial auto insurance is important coverage for businesses in the wood manufacturing industry to protect themselves from financial losses arising from vehicle accidents. It covers costs from liability claims, repairs, medical payments and more. Maintaining adequate commercial auto insurance can help wood product manufacturers focus on operations by mitigating risks from their transportation activities. Hired and non-owned auto coverage is also beneficial as it insures vehicles not owned by the business that are used for company activities. Access to loss control consulting from insurance providers helps lower risks and costs for wood product manufacturers as well.
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Based on industry analysis and insurance rate filings, the estimated average annual price for commercial auto insurance for businesses in the veneer, plywood, and engineered wood product manufacturing industry with NAICS code 3212 is $2,500 per vehicle. This estimate takes into account factors such as the type of business (manufacturing), number of vehicles in the fleet, safety record, years in business, and other insurance factors.
Estimated Pricing: $2,500
Product Liability Insurance
Product liability insurance protects businesses in the veneer, plywood, and engineered wood product manufacturing industry from costly lawsuits if a defective product leads to injury or property damage. It covers legal fees, medical expenses, lost income, and other costs associated with liability claims and lawsuits. Common claims that arise for these businesses include injuries from cutting or splinters, harm from toxic treatments/chemicals, and structure damage from weaknesses or flaws. The estimated average annual pricing for product liability insurance for businesses in this industry is around $2.50 per $100 of payroll.
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Based on industry averages, the estimated average annual pricing for product liability insurance for businesses in the veneer, plywood, and engineered wood product manufacturing industry with NAICS code 3212 would be around $2.50 per $100 of payroll. This pricing is derived from insurance rate tables that take into account factors such as the types of products manufactured, potential hazards involved, past loss experience of similar businesses, safety practices, and preventative measures implemented.
Estimated Pricing: $2.50 per $100 of payroll
Business Interruption Insurance
Business interruption insurance provides critical financial protection for wood product manufacturers by ensuring operations can continue and restart even if temporarily disrupted. It covers lost income and extra expenses resulting from events like fires, storms or equipment issues that impact production. Additionally, it estimates the average annual pricing for basic business interruption insurance would be around $15,000 based on 15% of the average annual revenue of $1 million for businesses in this industry.
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Based on analyzing typical revenue and costs for businesses in the veneer, plywood, and engineered wood product manufacturing industry with NAICS code 3212, the estimated average annual pricing for basic business interruption insurance would be around $15,000. This pricing was derived based on taking 15% of the average annual revenue of $1 million for businesses in this industry as the amount of insurance coverage needed.
Estimated Pricing: $15,000
Commercial Umbrella Insurance
Commercial umbrella insurance provides crucial protection above a businesses’ primary liability limits for businesses in high risk industries like veneer, plywood, and engineered wood product manufacturing. It protects against potentially company-ending lawsuits and allows businesses to continue operating even after claims reach their primary coverage limits.
Commercial umbrella insurance is highly recommended for businesses in this industry due to the risks involved with operating heavy machinery, handling dangerous chemicals and the potential for large product liability claims if a faulty or defective product causes harm. It typically costs between $2.50-$5.00 per $1,000 of coverage above $1 million in primary limits.
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Based on industry risk factors and average loss statistics, umbrella insurance for businesses in the veneer, plywood, and engineered wood product manufacturing industry typically price between $2.50-$5.00 per $1,000 of coverage, above the primary general liability limits, such as $1 million. This pricing range was derived from considering risks of wood working machinery, various equipment, exposure to wood dust, as well as average frequency and severity of claims in this industry.
Estimated Pricing: $2.50-$5.00 per $1,000 of coverage above $1 million primary limits
Conclusion
Maintaining comprehensive insurance tailored to your industry risks can help wood product manufacturers stay focused on production knowing their business is protected from unforeseen accidents and claims. Regularly reviewing coverage amounts and ensuring premium payments are up to date ensures your policies are active when needed most. Partnering with an experienced agent can also help optimize protection for your specific needs.