Processing Insurance FAQ

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Processing Insurance FAQ Information

Processing Insurance FAQ

Processing Insurance FAQ. Each processing risk is unique with respect to its hazards and exposures - most of which are substantial.

The basic insurance need is for property coverage on buildings, machinery and equipment, including raw stock and finished products.

Another important consideration is coverage for the care, custody and control of goods of others. While liability insurance coverage for premises and operations exposures is yet another important consideration, completed operations or products coverage is of even greater concern and must also be thoroughly evaluated.

Insurance for injuries to workers, environmental coverages, and automobile insurance are other important issues requiring attention and the appropriate insurance solutions.

We wanted to provide a deeper dive into small business insurance to help our readers get a better understand of the commercial insurance policies they want and need with the Processing Insurance FAQ.

Read the Processing Insurance FAQ to learn what type of commercial insurance coverages are right for your company - including liability, property, workers compensation and other specialty policies.

What Is A Processing Business?

According to Business Dictionary - a processing business is, "Movement of data or material towards a known goal or end result, by passing it through a series of stages or a sequence of actions.."

Processing companies include - but are not limited to - the following types of businesses:

  • Creosoting Operations
  • Enamellers
  • Hide Processors
  • Metal Processors
  • Refineries

You can reference the Insurance Definitions, Dictionary And Glossary to better understand the commercial insurance policy terms and language used in our Small Business Insurance FAQs.

What Kinds Of Insurance Do Processing Businesses Need?

  • At the minimum, processing businesses need general liability insurance.
  • If they have employees they will need workers compensation in most states.
  • If they have vehicles registered to the business, or use vehicles for the business purposes, they will also need commercial auto.
  • There are also other specialty coverages and endorsements that might be needed based on their operations.

Following are some suggested commercial policies and coverages applicable for processing businesses:

You can skip to the following types of processing businesses small business insurance policy coverage types using these links:

Processing Businesses Commercial Insurance Policies:

What Kinds Of Commercial Package Policies Do Processing Businesses Need?

Package policies are the most practical and convenient way for the insured to bundle several coverages together to receive a pricing break. Bundling all coverages provides a cost savings to the company and an incentive to the insured to place a number of coverages with the same company. None of the classifications in this category are eligible for a businessowners policy.

Types Of Processing Package Policies:

  • Commercial Package Policy (CPP)

What Kinds Of Commercial Property Insurance Do Processing Businesses Need?

The equipment used in processing operations is specialized and may be difficult to replace. Business income losses may last longer than expected if a damaged piece of equipment cannot be replaced easily or quickly.

An output policy form should be considered because it is designed to cover the changing nature of the property as it goes through the processing operation. Personal property of others is also an important exposure that must be recognized and covered in the appropriate manner.

Improvements and betterments coverage should be used when the processor is a tenant because the machinery and equipment could be covered using a building rate rather than the business personal property rate.

Types Of Property Coverages:

  • Building
  • Business Personal Property
  • Personal Property of Others
  • Improvements and Betterments

What Kinds Of Inland Marine Insurance Do Processing Businesses Need?

A risk and exposures analysis is important to determine the appropriate inland marine coverage form(s) to use. Patterns and dies coverage may be important for a processing risk.

Transportation of raw materials as well as finished processed goods should also be considered. Because most processors are bailees, protection of the customer's goods is important.

Types Of Inland Marine Coverages:

  • Accounts Receivable Coverage
  • Bailee Customers Coverage
  • Difference in Conditions (DIC) Coverage
  • Electronic Data Processing Equipment Coverage
  • Patterns and Dies Coverage
  • Processing Risk Coverage
  • Transportation Coverage
  • Valuable Papers and Records Coverage

What Kinds Of Crime Insurance Do Processing Businesses Need?

Some types of raw material inventory used in processing operations are not easily marked and therefore are harder to track, which makes them particularly susceptible to employee theft. Other crime coverages should be considered, depending on the nature of the operations and the manner in which they are conducted.

Other coverages that may be needed are determined by money-handling arrangements, the nature and extent of computer transactions and functions, and whether or not the business is considered a target. Fraudulent impersonation coverage could be very helpful to certain service operations because it covers loss through trickery.

Types Of Crime Coverages:

  • Computer and Funds Transfer Fraud Coverage
  • Employee Theft Coverage
  • Forgery or Alteration Coverage
  • Inside The Premises-Theft of Money and Securities Coverage
  • Inside The Premises-Robbery or Safe Burglary of Other Property Coverage
  • Money Orders and Counterfeit Money Coverage
  • Outside The Premises Coverage

What Kinds Of Surety Bonds Do Processing Businesses Need?

Bonds may be required in order for a processor to begin operations or remain in operation. In some cases, performance bonds may be required if the processor supplies services or products to a governmental entity.

Types Of Surety Coverages:

  • Contract-Performance of Service or Supply Bonds
  • Fiduciary Bonds
  • License and Permit Bonds
  • Miscellaneous Surety Bonds

What Kinds Of Commercial Liability Insurance Do Processing Businesses Need?

Premises and operations liability exposures could be substantial if explosion or equipment overheating is possible. Products liability can also present concerns, depending on the nature of the operations performed.

Railroad protective liability coverage may be necessary if an operating rail spur or sidetrack is on the insured's property.

Types Of Liability Coverages:

  • Commercial General Liability (CGL) Coverage
  • Claims-Made to Occurrence Coverage
  • Employee Benefits Liability Coverage
  • Employment-Related Practices Coverage
  • Product Recall or Product Withdrawal Expense Coverage
  • Product Contamination Insurance
  • Railroad Protective Liability Coverage

What Kinds Of Commercial Auto Insurance Do Processing Businesses Need?

The auto exposure depends on the nature of the operations and the manner in which the processed goods are delivered to the customer. If the insured uses common or contract carriers to transport finished goods, the exposure could be as little as a salespersons' fleet and hired and non-owned autos.

Types Of Business Auto Coverages:

  • Auto Medical Payments
  • Business Auto Coverage
  • Collision Coverage
  • Comprehensive Coverage
  • Hired & Non-owned Auto Coverage (HNOA)
  • Uninsured/Underinsured Motorists Coverage

What Kinds Of Workers Compensation Insurance Do Processing Businesses Need?

Processing exposes workers to the potential of significant injury. The chemicals used in some of the processes are toxic. Coverage for on-the-job injuries sustained by their employees through either a workers compensation policy or an approved self-insurance program is mandatory in almost every state.

Types Of Workers Comp Coverages:

  • Excess Workers Compensation Self-Insurance Bonds
  • Stop-Gap or Employers Liability Coverage
  • Workers Compensation and Employers Liability Coverage

What Kinds Of Excess And Umberlla Insurance Do Processing Businesses Need?

If the potential for injury or damage to others by the processed product is significant, or if an explosion or other catastrophic event at the processing plant is possible, high limits of coverage are important. The extra limits can be provided by either an umbrella or an excess policy.

Types Of Excess Liability Coverages:

  • Excess Liability Coverage
  • Retroactive Excess Liability Coverage
  • Umbrella Coverage

What Kinds Of Specialty Insurance Do Processing Businesses Need?

Some processors have significant environmental and international loss exposures. These exposures are not covered in the standard forms but can be addressed by one or more of the coverages shown below:

Types Of Specialty Coverages:

  • American Expatriate Coverage
  • Business Legal Expense Coverage
  • Commercial Credit Coverage
  • Cyber Liability Coverage
  • Data Security Breach Coverage
  • Directors and Officers Liability Coverage
  • Environmental Impairment Liability Coverage
  • Export Credit Insurance Coverage
  • Fiduciary Liability (Pension, Welfare and Employee Benefit Funds) Coverage
  • Identity Theft Insurance Coverage
  • International Insurance Coverage
  • Risk Retention Group Liability Coverage
  • Solar Energy System Coverage
  • Tax Liability Coverage
  • Tender Offer Defense Expenses Coverage
  • Underground Storage Tank (UST) Liability Coverage
  • Unmanned Aerial Vehicles (UAV) (Drones)

Processing Insurance FAQ - The Bottom Line

There are many commercial insurance policies available for Processing. To find out what types of coverage your business needs, speak to a professional insurance broker with experience in insuring processing businesses.

Frequently Asked Questions By Industry

Learn about the insurance coverages and surety bonds available for specific industires with the Insurance FAQs below:

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