Frequently Asked Questions About Small Business Insurance
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.
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:
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.
Following are some suggested commercial policies and coverages applicable for processors:
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:
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:
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:
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:
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:
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:
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:
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:
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:
Larger processors may own or lease aircraft used to visit customers and other owned locations. In some cases, these aircraft are also used to pick up goods to process or to deliver finished processed products.
Types Of Aviation Coverages:
Ocean-going ships or vessels are often used to transport finished processed goods back to customers. In these cases, an open ocean marine cargo policy can be used to protect the insurable interest of the processor in those finished goods.
Types Of Ocean Marine Coverages:
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:
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.
Learn about the coverages available for specific industires with the Insurance FAQs below: