Chemical Manufacturers Insurance Policy Information
Chemical Manufacturers Insurance. The manufacture of chemicals and allied products encompasses a vast and diverse field.
These companies may process basic chemicals like sodium, potassium, resins, or peroxides, or make finished chemical products that will be used as cleaning products, detergents, cosmetics, or in the pharmaceutical or agricultural industries, among others.
This field of manufacture may also produce commodities that will subsequently be processed further - synthetic fibers, dyes, or plastics, for instance.
Chemical manufacturers use a variety of raw materials and processes to produce a large assortment of consumer and industrial products, including some that are reactive, radioactive, or toxic.
Raw materials may come from animals (bone or tallow), minerals (metals or salts), petrochemicals (oils or solvents), or plants (alcohol, resins, or waxes). While some manufacturers' processes simply involve mixing and blending, such as producing cleaners with different fragrances, other processes are more involved.
Processes can include aeration, crushing, distillation, filtering, freezing, heating, mixing, pressurizing, or washing. The end product may take a variety of forms such as aerosols, gases, liquid concentrates, powder, or solids.
Cleanliness, purity, and the proper mix of ingredients are critical. Chemical manufacturers have laboratories engaged in product development, testing, and quality control.
While it is beyond question that chemicals and allied products play an essential role in the global supply chain, as well as the functioning of society, the fact that this industry is filled with perils is just as clear.
To ensure the future success of a company that manufactures chemicals and allied products, it is crucial to be armed with an air-tight insurance plan that covers all eventualities. To find out what types of chemical manufacturers insuranceare required, keep reading.
Chemical manufacturers insurance protects your manufacturing business from lawsuits with rates as low as $97/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked chemical manufacturing insurance questions:
- What Is Chemical Manufacturers Insurance?
- How Much Does Chemical Manufacturers Insurance Cost?
- Why Do Chemical Manufacturers Need Insurance?
- What Type Of Insurance Do Chemical Manufacturers Need?
What Is Chemical Manufacturers Insurance?
Chemical Manufacturers Insurance is a specialized type of insurance coverage that is specifically designed for companies that manufacture, distribute, or sell chemicals. This insurance protects these businesses from financial losses due to accidents, spills, contamination, or other incidents involving their products.
This coverage can include protection for property damage, liability for third-party injuries, environmental pollution and clean-up, and loss of income from business interruption. It is important for chemical manufacturers to have Chemical Manufacturers Insurance as it covers potential risks associated with the production and handling of hazardous materials.
How Much Does Chemical Manufacturers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small chemical manufacturing businesses ranges from $97 to $159 per month based on location, size, revenue, claims history and more.
Why Do Chemical Manufacturers Need Insurance?
All commercial ventures - from small, family-run catering companies to industry giants with global influence - have one thing in common, and that is that they all face risks.
A manufacturer of chemical and allied products of diverse kinds is vulnerable to the same threats as any other company, including acts of nature (earthquakes, wildfires, hurricanes, lightning strikes, serious floods, and others), theft, and vandalism.
All these unforeseen circumstances have the potential to cause extensive physical and financial damage.
The almost endless list of threats unique to this particular industry illustrates that the stakes are even higher for companies manufacturing chemicals and allied products, however. For companies that work with hazardous chemicals, the risk that an employee suffers a workplace injury or exposure-related illness is always a present.
Should chemicals or byproducts cause environmental damage, the liability fallout could be disastrous. The same holds true for a scenario in which a product causes bodily injury to a consumer or other third party.
As the risks a company faces increase in magnitude, so too does its need for the right chemical manufacturers insurance program that protects the business against all possible threats.
With the right insurance, these and other circumstances beyond your control can represent obstacles that can be overcome.
What Type Of Insurance Do Chemical Manufacturers Need?
Companies that make chemicals and chemical products need to carry a range of different kinds of insurance that, together, protect their financial interests.
Because a company's precise needs depend on factors such as the jurisdiction in which its manufacturing facility is based, the nature of the products it makes, the manufacturing equipment used, and its number of employees, it is essential to build a customized insurance plan.
A seasoned commercial insurance agent who understands the unique perils of the chemical industry is invaluable in this process. Certain key types of chemical manufacturers insurance are non-negotiable, however, and those include:
- Commercial Property: This type of insurance guards a company against financial losses resulting from perils such as fire, theft, and vandalism - though the exact events covered will vary. It does so by helping cover the costs of damage to physical assets including your building, manufacturing equipment, and inventory.
- General Liability: This chemical manufacturers insurance covers third party bodily injury and property damage claims resulting from your company's activities or on its premises. It can cover events such as a visitor to your facility becoming ill as a result of exposure to chemicals, and an employee's negligent actions resulting in damage to the environment.
- Product Liability: Designed to cover liability issues arising specifically from your products, this type of insurance can cover events such as end consumers suffering a burn after using a cleaning solution you manufactured. It can also cover the costs associated with product recalls.
- Workers' Compensation: Another important insurance all companies making chemical and allied products should carry, workers' compensation insurance covers the medical bills of employees who sustain occupational injuries and illnesses of any kind. Should the worker be unable to resume their job, it further covers their lost wages.
These examples of essential types of chemical manufacturers insurance do not represent an exhaustive list; companies manufacturing chemicals and allied products are highly likely to also require additional forms of insurance, such as vehicle insurance and environmental insurance.
For complete peace of mind, a commercial insurance agent should always be consulted.
Chemical Manufacturing's Risks & Exposures
Premises liability exposure is high due to the potential for explosion and release of chemicals which may be reactive (flammable, corrosive or explosive) or toxic - or both. Dust from processing, toxins released in a fire, or fumes, spills or leaks from chemical tanks may cause serious bodily injuries or property damage. There should be a distance barrier between the applicant and the closest neighbor.
An evacuation procedure must be in place. The fire department must be aware of the chemicals in use so that they can have appropriate gear on hand to control any fire or vapor release. If the manufacturer conducts tours, visitors may be injured by slips, trips, or falls. Fences should surround the facility with warnings posted to discourage trespassers.
Products liability exposure may be very high depending on the chemicals used in production and final use. Quality control at all phases of the operation from initial receipt of raw materials to packaging is critical to reducing the exposure to injury.
Poor quality control, improper storage, transport or inappropriate packaging and labeling may result in bodily injury or property damage. If chemicals are made to customer specifications, there must be a contract in place specifically detailing the product needs and the quality control process for each party.
Environmental impairment exposure is very high. Sudden or cumulative discharges may contaminate air, surface or ground water, or soil. Processes may cause thermal or noise pollution. Disposal of wastes must adhere to all federal and state guidelines.
Exposure is increased significantly if underground or outdoor tanks are used due to the potential for leakage or spillage.
Workers compensation exposures may be very high. Injuries from production machinery are common, as are burns from chemicals, slips, trips, falls, foreign objects in the eye, hearing impairment from noise, and back injuries from lifting and other material handling. With some compounds, there is the possibility of explosion.
Chemicals may be toxic or caustic, with a high potential for injury to eyes, lungs, or skin. Employees must be fully informed as to the potential effects of the chemicals, including long-term occupational disease hazards so that they can be aware of warning symptoms and obtain treatment as early as possible. Eyes must be protected and eye wash areas should be close to all vats.
Drivers of forklifts and vehicles may be injured in accidents.
Property exposure consists of an office, plant, and warehouse or yard for storage of raw materials and finished goods. There may be a laboratory for product development and testing. Ignition sources include electrical wiring, production machinery, and buildup of static electricity and sparks which could trigger a destructive chain reaction.
While some chemicals may be inert, others are reactive (flammable, corrosive or explosive) and require special handling as improper storage may result in explosions. If used to create new products, there will be a reaction and creation of energy in the form of heat. Large storage tanks for raw materials and vats for mixing and blending may contain substances with high potential for fire and explosion.
Some chemicals may be spoiled by temperature change, humidity, dust or other changes. Hazards increase without fire suppression devices or other controls designed for the particular chemical processes. Poor housekeeping is a serious fire hazard. Unless disposed of properly, greasy, oily rags (such as those used to clean the machinery) can cause a fire without a separate ignition source.
As some ingredients are targets for theft, appropriate security controls must be taken including lighting and physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.
Equipment breakdown exposures include malfunctioning production equipment, ventilation systems, electrical control panels and other apparatus. A lengthy breakdown to production machinery could result in a severe loss, both direct and under time element.
Crime exposures are chiefly from theft either by third parties or employees, particularly for precious metals or explosives. Background checks should be conducted on all employees. There must be a separation of duties between persons handling deposits and disbursements and handling bank statements.
Inland marine exposures include accounts receivable if the manufacturer offers credit, computers (which may include testing applications and computer-run production equipment), goods in transit, and valuable papers and records for customers' and suppliers' information, quality control testing results, and proprietary formulas.
The main causes of loss are fire, theft, and loss by spill or contamination, especially during a collision.
Commercial auto exposure is very high if the manufacturer has its own tanker trucks and transports raw materials or finished products. Transportation of volatile chemicals can result in an explosion in the event of a collision. Drivers should be trained in spill containment, have an appropriate license with a Hazardous Materials endorsement, and an acceptable MVR.
It is also important that the tankers have a standard maintenance routine that is well documented. All vehicles must be well maintained with appropriate documentation kept in a central location. Manufacturers generally have private passenger fleets used by sales representatives. There should be written procedures regarding the private use of these vehicles by others.
Commercial Insurance And Business Industry Classification
- SIC CODE: 2800 Chemicals and Allied Products, 2810 Industrial Inorganic Chemicals, 2812 Other Basic Inorganic Chemical Manufacturing, 2813 Industrial Gas Manufacturing, 2816 Synthetic Dye and Pigment Manufacturing, 2819 Alumina Refining and Primary Aluminum Production, 2820 Plastic Material, Synth Resin/rubber, Cellulos (no Glass), 2821 Plastics Material and Resin Manufacturing, 2822 Synthetic Rubber Manufacturing, 2823 Artificial and Synthetic Fibers and Filaments Manufacturing, 2824 Artificial and Synthetic Fibers and Filaments Manufacturing, 2836 Biological Product (except Diagnostic) Manufacturing, 2840 Soap, Detergents, Cleang Preparations, Perfumes, Cosmetics, 2841 Soap and Other Detergent Manufacturing, 2842 Polish and Other Sanitation Good Manufacturing, 2843 Surface Active Agent Manufacturing, 2844 Toilet Preparation Manufacturing, 2860 Industrial Organic Chemicals, 2861 Cyclic Crude, 2865 Cyclic Crude, 2869 Ethyl Alcohol Manufacturing, 2870 Agricultural Chemicals, 2873 Nitrogenous Fertilizer Manufacturing, 2874 Phosphatic Fertilizer Manufacturing, 2875 Fertilizer (mixing Only) Manufacturing, 2879 Pesticide and Other Agricultural Chemical Manufacturing, 2890 Miscellaneous Chemical Products, 2891 Adhesive Manufacturing, 2892 Explosives Manufacturing, 2893 Printing Ink Manufacturing, 2895 Carbon Black, 2899 All Other Misc. Chemical Product and Preparation Manufacturing
- NAICS CODE: 325110 Petrochemical Manufacturing, 325120 Industrial Gas Manufacturing, 325130 Synthetic Dye and Pigment Manufacturing, 325180 Other Basic Inorganic Chemical Manufacturing, 325193 Ethyl Alcohol Manufacturing, 325194 Cyclic Crude, Intermediate, and Gum and Wood Chemical Manufacturing, 325199 All Other Basic Organic Chemical Manufacturing, 325211 Plastics Material and Resin Manufacturing, 325212 Synthetic Rubber Manufacturing, 325220 Artificial and Synthetic Fibers and Filaments Manufacturing, 325311 Nitrogenous Fertilizer Manufacturing, 325312 Phosphatic Fertilizer Manufacturing, 325314 Fertilizer (mixing Only) Manufacturing, 325320 Pesticide and Other Agricultural Chemical Manufacturing, 325611 Soap and Other Detergent Manufacturing, 325612 Polish and Other Sanitation Good Manufacturing, 325613 Surface Active Agent Manufacturing, 325620 Toilet Preparation Manufacturing, 325910 Printing Ink Manufacturing, 325920 Explosives Manufacturing, 325991 Custom Compounding Of Purchased Resins, 325992 Photographic Film, Paper, Plate, and Chemical Manufacturing, 325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing
- Suggested ISO General Liability Code(s): 51850 Chemical Manufacturing - Commercial or Industrial, 51851 Chemical Manufacturing - Commercial or Industrial - Toxic and Either Flammable, Explosive or Reactive, 51852 Chemical Manufacturing - Commercial or Industrial - Primarily Flammable, Explosive or Reactive, 51853 Chemical Manufacturing - Commercial or Industrial - Primarily Toxic or Presenting A Health Hazard, 51854 Chemical Manufacturing - Household - Toxic and Either Flammable, Explosive or Reactive, 51855 Chemical Manufacturing - Household, 51856 Chemical Manufacturing - Household - Primarily Flammable, Explosive or Reactive, 51857 Chemical Manufacturing - Household - Primarily Toxic or Presenting A Health Hazard
- Suggested Workers Compensation Code(s): 4829 Chemical Manufacturing NOC - All Operations & Drivers - Includes Blending or Mixing
Description for Major Group 28: Chemicals And Allied Products
This major group includes establishments producing basic chemicals, and establishments manufacturing products by predominantly chemical processes. Establishments classified in this major group manufacture three general classes of products:
- Basic chemicals, such as acids, alkalies, salts, and organic chemicals.
- Chemical products to be used in further manufacture, such as synthetic fibers, plastics materials, dry colors, and pigments.
- Finished chemical products to be used for ultimate consumption, such as drugs, cosmetics, and soaps; or to be used as materials or supplies in other industries, such as paints, fertilizers, and explosives.
The mining of natural alkalies and other natural potassium, sodium, and boron compounds, of natural rock salt, and of other natural chemicals and fertilizers are classified in Mining, Industry Group 147. Establishments primarily engaged in manufacturing nonferrous metals and high-percentage ferroalloys are classified in Major Group 33; those manufacturing silicon carbide are classified in Major Group 32; those manufacturing baking powder, other leavening compounds, and starches are classified in Major Group 20; and those manufacturing artists' colors are classified in Major Group 39. Establishments primarily engaged in packaging, repackaging, and bottling of purchased chemical products, but not engaged in manufacturing chemicals and allied products, are classified in Wholesale or Retail Trade industries.
Industry Group 281: Industrial Inorganic Chemicals
- 2812 Alkalies and Chlorine
- 2813 Industrial Gases
- 2816 Inorganic Pigments
- 2819 Industrial Inorganic Chemicals, Not Elsewhere Classified
Industry Group 282: Plastics Materials And Synthetic Resins, Synthetic
- 2821 Plastics Materials, Synthetic Resins, and Nonvulcanizable Elastomers
- 2822 Synthetic Rubber (Vulcanizable Elastomers)
- 2823 Cellulosic Manmade Fibers
- 2824 Manmade Organic Fibers, Except Cellulosic
Industry Group 284: Soap, Detergents, And Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations
- 2841 Soap and Other Detergents, Except Specialty Cleaners
- 2842 Specialty Cleaning, Polishing, and Sanitation Preparations
- 2843 Surface Active Agents, Finishing Agents, Sulfonated Oils, and Assistants
- 2844 Perfumes, Cosmetics, and Other Toilet Preparations
Industry Group 286: Industrial Organic Chemicals
- 2861 Gum and Wood Chemicals
- 2865 Cyclic Organic Crudes and Intermediates, and Organic Dyes and Pigments
- 2869 Industrial Organic Chemicals, Not Elsewhere Classified
Industry Group 287: Agricultural Chemicals
- 2873 Nitrogenous Fertilizers
- 2874 Phosphatic Fertilizers
- 2875 Fertilizers, Mixing Only
- 2879 Pesticides and Agricultural Chemicals, Not Elsewhere Classified
Industry Group 289: Miscellaneous Chemical Products
- 2891 Adhesives and Sealants
- 2892 Explosives
- 2893 Printing Ink
- 2895 Carbon Black
- 2899 Chemicals and Chemical Preparations, Not Elsewhere Classified
Chemical Manufacturers Insurance - The Bottom Line
Chemical manufacturers insurance policies can be very different in coverage, costs and exclusions. To learn if your chemical manufacturing operation has the best fit insurance policies - talk to an experienced commercial insurance broker.
Often they are able to save you on premiums and offer you better policy options than you currently have.
Additional Resources For Manufacturing Insurance
Learn all about manufacturing insurance. Manufacturers face many unique risks such as product libility and/or product recall exposures due to the nature of their business operations.
- 3D Printing
- Audio & Video Equipment
- Auto Parts
- Bottling Plants
- Brooms & Brushes
- Camping Equipment
- Canned Fruit & Vegetables
- Canvas Products
- CBD Oil And Hemp
- Clock & Watch
- Commercial Air Conditioning
- Commercial Electronics
- Communications Equipment
- Construction Equipment
- Cork Products
- Dairies & Creameries
- Down And Feather Products
- Dry Ice
- Dyes & Pigments
- Electronic Toys & Games
- Exercise Equipment
- Farm Equipment
- Feed & Grain
- Flavoring Extracts
- Frozen Foods
- Fruit Juice
- Fur Garment
- Garage Door
- Gypsum Products
- Ice Cream
- Iron & Steel Foundries
- Lawn Mowers
- Leather Apparel
- Lighting & Wiring
- Lumber & Wood Products
- Machine Shop
- Major Electrical Appliances
- Marijuana Products
- Mattresses & Box Springs
- Metal & Plastic Furniture
- Metal Heat Treating
- Metal Toys
- Musical Instruments
- Nonferrous Foundries
- Ornamental Metalwork
- Paper & Allied Products
- Pet Food
- Plastic & Rubber Toys
- Plastic Goods
- Plastics Molding, Forming & Extruding
- Product Liability
- Psychedelic Drugs
- Pulp & Paper Mills
- Residential Air Conditioning & Heating
- Rubber Goods
- Sawmills & Planing Mills
- Screw Machine Products
- Sheet Metal
- Soap & Detergent
- Small Electrical Appliances
- Sporting Goods
- Stone Products
- Textiles Finishing & Coating
- Tool & Die Shops
- Vending Machines
- Vegetable Juice
- Wire Rope
- Wood Furniture
- Writing Instruments
- Specialty Manufacturing
- Specialty Product Liability
The manufacturing industry is a vital part of the economy and plays a significant role in the production of goods and services. However, it is also an industry that is prone to risks and accidents, which can result in costly damages and lawsuits. Therefore, it is essential for businesses in the manufacturing industry to have insurance to protect them against potential losses.
Business insurance can cover a wide range of risks, including property damage, liability, and worker injuries. For instance, if a fire were to break out in a manufacturing facility and destroy equipment or inventory, commercial insurance could cover the costs of replacing or repairing the damages. Similarly, if a worker were to be injured on the job, business insurance could cover medical expenses and lost wages.
In addition to protecting against physical damages, insurance can also provide financial protection against legal liabilities. If a customer were to sue a manufacturing business for a faulty product, the commercial insurance could cover the costs of legal fees and settlements.
Overall, insurance is essential for the manufacturing industry as it helps to mitigate risks and protect against unexpected costs. Without it, businesses in the industry could face financial ruin in the event of an accident or lawsuit.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Employee Dishonesty, Accounts Receivable, Computers, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits Liability, Environmental Impairment Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.