Processing Insurance FAQ

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Get answers to small business insurance frequently questions including costs, coverages, minimum requirements, certificates & more.

Types Of Small Business Insurance

  • Includes medical payments, legal representation, and defense against libel and slander accusations.
  • Provides financial protection if an employee has a job-related accident or illness.
  • Bundles general liability insurance and commercial property into one affordable policy.
  • Pays to repair or replace your business property if it's stolen, damaged, or destroyed in a fire or natural disaster.
  • Covers mistakes or alleged mistakes on your part (errors) & failures or alleged failures to perform a service (omissions).
  • Is liability and physical damage protection for vehicles, such as cars, trucks and vans, that are used for business.
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Frequently Asked Questions About Small Business Insurance


What types of business insurance do I need?

Almost every business needs general liability and commercial property insurance at the very least. If you have any non-owner employees, you'll most likely need workers compensation insurance too as most state require it. Other types to consider are: commercial auto, professional liability, cyber liability, inland marine and others. It all depends on the risks your business faces. Read more...

How much does general liability insurance cost?

In 2019, commercial general liability costs can vary widely based on industry. Premiums are also determined by zip code and often payroll and/or gross sales. You can request a free quote to get an exact premium for your business. Read more...

How does general liability insurance work?

Having general liability is the basis of any business insurance program. If you can afford only one commercial insurance policy for your small business - then you should get a commercial general liability policy, because it offers protection against a wide range of unexpected risks, and will form the foundation of your business financial protection. Read more...

What is a Certificate of Insurance?

A Certificate of Insurance (COI) is proof of coverage. It verifies that you have insurance coverage for your small business, & contains information on types and limits of coverage, insurance company, policy number, named insured, and the effective date of the policy. Read more...
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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.

Types Of Processing Insurance Policies

Following are some suggested commercial policies and coverages applicable for processors:

PACKAGE POLICIES

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)
PROPERTY COVERAGES

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
INLAND MARINE 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:

  • 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
CRIME 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:

  • 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
SURETY 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:

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

  • 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
COMMERCIAL AUTO 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:

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

  • Excess Workers Compensation Self-Insurance Bonds
  • Stop-Gap or Employers Liability Coverage
  • Workers Compensation and Employers Liability Coverage
EXCESS AND UMBRELLA 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:

  • Excess Liability Coverage
  • Retroactive Excess Liability Coverage
  • Umbrella Coverage
AVIATION 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:

  • Air Cargo Coverage
  • Aircraft Liability Coverage
  • Aircraft Passenger Liability Coverage
  • Aircraft Physical Damage (Hull) Coverage
OCEAN MARINE 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:

  • Ocean Marine Cargo Coverage
  • Ocean Cargo War Risk Coverage
SPECIALTY 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:

  • 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 coverages available for specific industires with the Insurance FAQs below:

Processing Insurance FAQ
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