Fireworks Manufacturers Insurance Policy Information
Fireworks Manufacturers Insurance. Fireworks quite similar to those used today have graced important celebrations since at least the 9th Century, but their manufacture has become increasingly sophisticated over time.
Despite the fact that elaborate pyrotechnics displays are undoubtedly breathtakingly beautiful, it will have escaped nobody that fireworks can also pose a life-threatening risk. This places manufacturers in a uniquely delicate situation.
Fireworks manufacturers produce products designed to explode in particular configurations, to display specific colors, and to burn for a specified amount of time. Many have an auditory component, such as the computer-controlled timing of explosions set to music.
Commercial-use (or "display") fireworks contain added explosive materials and are launched by mortars, set into frames, and are supervised by a trained pyrotechnician. Consumer products contain very limited amounts of explosive material and include firecrackers, fountains, and Roman candles.
Products such as smoke balls, snakes, or sparklers contain no explosive material, but use chemicals to produce their desired effect. Black powder (gunpowder) is combined with coloring agents (called "paint" in the industry), dried, and shaped if necessary, then inserted into paper or plastic shells or containers.
Finally, a fuse is added, and the product is packed and shipped. There is a strict distinction made between commercial and consumer products. Although various federal, state, and local governmental agencies control the manufacture, sales, transport, and display of fireworks, the potential for loss remains very high.
The foundation of any firework is its shell, made from cardboard or paper. Although each manufacturer will have their own close-guarded formula, basic ingredients have remained the same over the course of many centuries - potassium nitrate, sulfur, and charcoal ("black powder"), a fuse, a lift charge, a launch tube, and "stars".
These metal salts, such as magnesium, copper chloride, and aluminum, packed into specific patterns, give fireworks their colors and shapes.
As fireworks manufacturers work with these sensitive chemicals and flammable materials, they will need top-notch insurance to protect their company from unforeseen circumstances.
What do manufacturers in the pyrotechnics industry need to know about their insurance needs? For an overview of the types of fireworks manufacturers insurance you cannot do without, keep reading.
Fireworks 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 fireworks manufacturing insurance questions:
- What Is Fireworks Manufacturers Insurance?
- How Much Does Fireworks Manufacturers Insurance Cost?
- Why Do Fireworks Manufacturers Need Insurance?
- What Type Of Insurance Do Fireworks Manufacturers Need?
- What Does Fireworks Manufacturers Insurance Cover & Pay For?
What Is Fireworks Manufacturers Insurance?
Fireworks manufacturers insurance is a type of insurance policy that provides financial protection to businesses that manufacture, store, and distribute fireworks.
This insurance covers a wide range of risks and potential losses, including property damage, bodily injury, and liability claims. The policy may also cover business interruption, loss of income, and product liability.
The purpose of this insurance is to help the fireworks manufacturer protect their assets and minimize financial losses in the event of an accident or loss.
How Much Does Fireworks Manufacturers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small fireworks manufacturing businesses ranges from $97 to $139 per month based on location, size, revenue, claims history and more.
Why Do Fireworks Manufacturers Need Insurance?
As a responsible modern fireworks manufacturer, your company will go to great lengths to meet health and safety regulations and to ensure that your business runs smoothly. Despite that, you are always at risk of encountering circumstances beyond your control.
All commercial ventures require insurance, regardless of their field, size, and risk profile, since they can all be subject to events that could lead to catastrophic financial losses and legal liability. Any company can be struck, for instance, by theft or acts of vandalism.
Any company's financial health can suffer greatly in the event the business is hit by an act of nature - environmental phenomena such as wildfires, floods, and lightning strikes that can damage or destroy buildings as well as equipment and inventory.
All manufacturers, and many companies in different fields, also run the risk that workers become injured in the workplace, that third parties sustain injuries on their premises, or that their activities cause accidental damage to others' properties. All of these events can quickly become legal and financial minefields.
As a manufacturer of pyrotechnics, you are in a special position - you work with explosives and hazardous chemicals alike, and even after your beautiful fireworks safely leave your manufacturing facility, their improper use or potential malfunction can do great damage.
This is why rock solid fireworks manufacturers insurance coverage is even more important for you than for commercial ventures in many other fields.
What Type Of Insurance Do Fireworks Manufacturers Need?
A seasoned commercial insurance agent can guide you through your needs, which will vary depending on your company's size, its number of workers, its geographical location, and numerous other factors.
You will, however, want to look for a company that is deeply familiar with, and by preference specializes in, the pyrotechnics industry. These insurance companies will understand your need and have your back.
Many kinds of fireworks manufacturers insurance exist, and among the types you will certainly want to carry are:
- Commercial Property: This type of insurance will cover your real estate in case circumstances that include acts of nature, theft, and vandalism cause serious damage or destruction. It can also cover the manufacturing equipment and other physical assets inside.
- Commercial General Liability: Should a third party sustain bodily injury within your facilities, or should your company's activities damage third party property as the result of an accident, this type of insurance will help cover your legal costs and settlement fees.
- Product Liability: Especially important for manufacturers of potentially hazardous products such as fireworks, product liability insurance has your back if, for instance, your pyrotechnics explode in transit or their improper use causes injury. As with general liability insurance, it can cover legal expenses. It can also allow you to recover revenue lost if a product needs to be recalled.
- Workers Compensation: This type of fireworks manufacturers insurance is absolutely indispensable; it covers employees' medical bills and lost wages in the event of workplace injury (both acute and, for instance, long-term occupational injury as a result of inhaling toxic chemicals), while at the same time safeguarding your company against costly civil suits.
Keep in mind that these types of fireworks manufacturers insurance are simply examples of your coverage needs, as well as that these kinds of insurance will be available in different tiers.
To make sure that you have the quality coverage you can count on, turn to a competent business insurance broker who specializes in the fireworks industry.
Fireworks Manufacturing's Risks & Exposures
Premises liability exposure is high due to the potential for damage to neighboring premises by fire, explosion, and smoke. Access by visitors should be limited. If the manufacturer conducts tours, visitors may be injured by slips, trips, or falls.
The entire area should be fenced with warnings posted to prevent unauthorized access. If fireworks displays are conducted by the manufacturer, hazards increase significantly.
Products liability exposure is high due to the inherently dangerous nature of fireworks. Serious property damage and bodily injury may occur even when used as instructed. Significant injuries or damage may follow from poor quality control, improper storage, transport, or inappropriate packaging and labeling. Courts may apply strict liability standards, especially to goods sold to consumers that are used without professional supervision.
Environmental impairment exposure is very high. Coloring agents may contain toxic ingredients and heavy metals. Waste disposal may contaminate the ground, air, and waterways. Disposal of wastes must adhere to all federal and state guidelines.
Workers compensation exposures are severe due to the explosive nature of fireworks. Should there be an explosion, amputation, loss of limbs, or fatalities may occur. Workers can inhale the black powder or chemical compounds, resulting in skin or lung irritation or respiratory problems. Injury and disease from toxins can occur from coloring agents that include heavy metals.
All employees must be aware of the potential side effects and symptoms of medical conditions associated with the chemicals used, including the long-term occupational disease hazard. Injuries from production machinery are common, as are burns, cuts, slips, trips, falls, foreign objects in the eye, hearing impairment from noise, back injuries from lifting, and repetitive motion injuries.
Workstations should be ergonomically designed. Workers should wear 100% cotton clothing to prevent the buildup of static electricity. Because sales of fireworks are seasonal, time pressures may result in safety procedures being ignored, especially with regard to material handling.
If employees are used to conduct fireworks displays, they should be well trained and wear OSHA-approved hearing equipment. A spotter should be on hand to warn the operator, and a fire extinguisher should be readily available.
Property exposure consists of office, plant, warehouse for finished goods, and yard for storage of raw materials. Hazards are very high due to the explosive ingredients used and the flammable casings. Ignition sources include electrical wiring, heating and cooling systems, production machinery, the buildup of static electricity, sparks, or dust, any of which could trigger a destructive chain reaction.
Raw materials, chemicals, and end products should be separated from the processing area and kept in proper storage rooms. Electrical outlets should be explosion-proof. Storage areas should be kept cool to prevent explosions. Poor housekeeping may be a serious fire hazard. All fire prevention and reduction methods need to be carefully reviewed and evaluated.
Access by emergency personnel may be limited because fireworks manufacturers are often situated away from population centers. Raw materials and finished stock can be 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 and dust collection 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, due to the attractive yet restricted use of explosives. Given the difficulty of extracting large amounts of explosives from the finished product, this hazard is prominent for raw materials.
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. The manufacturer should have security methods in place to keep all unauthorized personnel away from the explosives.
Inland marine exposures include accounts receivable if the manufacturer offers credit, computers, exhibitions, goods in transit, and valuable papers and records for customers' and suppliers' information. Stock in transit is susceptible to damage from fire, explosion, and water. Transport of fireworks is closely controlled by the Department of Transportation (DOT). Prior to any transport, DOT approval must be obtained.
Commercial auto exposure is very high due to the potential for fire and explosion of the cargo, which may cause injury or damage to persons or property in the vicinity. Transport of fireworks is closely controlled by the Department of Transportation (DOT). DOT approval must be obtained prior to any transport.
Manufacturers generally have private passenger fleets used by sales representatives. There should be written procedures regarding the private use of these vehicles by others. Drivers should have an appropriate license and an acceptable MVR. All vehicles must be well maintained, with documentation kept in a central location.
What Does Fireworks Manufacturers Insurance Cover & Pay For?
Fireworks manufacturers can be sued for a variety of reasons, often related to the inherent risks associated with the production, sale, and use of fireworks. Here are some reasons, and how insurance can help protect them in such circumstances:
1. Product Liability: A common reason for a lawsuit is product liability. If a firework is faulty and causes injury or property damage, the manufacturer can be sued. In this case, product liability insurance can help cover the costs of the lawsuit. This insurance would pay for the manufacturer's legal defense, as well as any settlement or award given to the plaintiff, up to the policy limits.
2. Workers' Compensation: Fireworks manufacturing is a hazardous industry. If an employee is injured or killed on the job, the manufacturer could face a lawsuit. Workers' compensation insurance can protect the company by covering medical bills, lost wages, and legal costs associated with such claims. It also provides benefits to the family of an employee who dies as a result of a workplace accident.
3. Environmental Damage: Fireworks manufacturing involves the use of potentially harmful chemicals. If these chemicals are not handled properly and cause environmental damage, the manufacturer could be sued. Environmental liability insurance can help cover cleanup costs, natural resource damage, and legal defense costs associated with environmental claims.
4. Supply Chain Interruption: If a manufacturer can't deliver products due to an unforeseen event, such as a natural disaster, they could face lawsuits from customers for breach of contract. Supply chain or business interruption insurance can protect the company by covering lost income, operating expenses, and even the costs of a lawsuit related to such interruptions.
5. Intellectual Property Infringement: If a fireworks manufacturer is accused of infringing on another company's patent or design, they could face a lawsuit. Intellectual property insurance can help cover legal defense costs, as well as any settlement or damages awarded to the plaintiff.
Overall, insurance plays a crucial role in protecting fireworks manufacturers from potential legal and financial risks. Each policy is tailored to the specific needs of the company, offering a safety net that enables the business to continue operating despite these challenges.
Commercial Insurance And Business Industry Classification
- SIC CODE: 2899 Chemicals And Chemical Preparations, Not Elsewhere Classified
- NAICS CODE: 325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing
- Suggested Workers Compensation Code(s): 4771 Explosives or Ammunition Manufacturing NOC & Drivers
Description for 2899: Chemicals And Chemical Preparations, Not Elsewhere Classified
Division D: Manufacturing | Major Group 28: Chemicals And Allied Products | Industry Group 289: Miscellaneous Chemical Products
2899 Chemicals And Chemical Preparations, Not Elsewhere Classified: Establishments primarily engaged in manufacturing miscellaneous chemical preparations, not elsewhere classified, such as fatty acids, essential oils, gelatin (except vegetable), sizes, bluing, laundry sours, writing and stamp pad ink, industrial compounds, such as boiler and heat insulating compounds, metal, oil, and water-treating compounds, waterproofing compounds, and chemical supplies for foundries. Establishments primarily engaged in manufacturing vegetable gelatin (agar-agar) are classified in Industry 2833; those manufacturing dessert preparations based on gelatin are classified in Industry 2099; those manufacturing printing ink are classified in Industry 2893; and those manufacturing drawing ink are classified in Industry 3952.
- Acid resist for etching
- Acid, battery
- Anise oil
- Antifreeze compounds, except industrial alcohol
- Bay oil
- Binders (chemical foundry supplies)
- Boiler compounds, antiscaling
- Bombs, flashlight
- Caps, for toy pistols
- Carbon removing solvents
- Chemical cotton (processed cotton linters)
- Chemical supplies for foundries
- Citronella oil
- Concrete curing compounds (blends of pigments, waxes, and resins)
- Concrete hardening compounds
- Core oil and binders
- Core wash
- Core was
- Correction fluid
- Corrosion preventive lubricant, synthetic base: for jet engines
- Deicing fluid
- Desalter kits, sea water
- Dextrine sizes
- Drilling mud
- Dyes, household
- Essential oils
- Ethylene glycol antifreeze preparations
- Eucalyptus oil
- Esothermics for metal industries
- Facings (chemical foundry supplies)
- Fatty acids: margaric, oleic, and stearic
- Fire extinguisher charges
- Fire retardant chemical preparations
- Fluidifier (retarder) for concrete
- Fluorescent inspection oil
- Fluxes: brazing, soldering, galvanizing, and welding
- Foam charge mixtures
- Food contamination testing and screening kits
- Foundry supplies, chemical preparations
- Fuel tank and engine cleaning chemicals, automotive and aircraft
- Fusees: highway, marine, and railroad
- Gelatin capsules, empty
- Gelatin: edible, technical, photographic, and pharmaceutical
- Glue size
- Grapefruit oil
- Grouting material (concrete mending compound)
- Gum sizes
- Gun slushing compounds
- Heat insulating compounds
- Heat treating salts
- Hydrofluoric acid compound, for etching and polishing glass
- Igniter grains, boron potassium nitrate
- Industrial sizes
- Insulating compounds
- Jet fuel igniters
- Laundry sours
- Lemon oil
- Lighter fluid
- Magnetic inspection oil and powder
- Margaric acid
- Metal drawing compound lubricants
- Metal treating compounds
- Military pyrotechnics
- Oil treating compounds
- Oleic acid (red oil)
- Orange oil
- Orris oil
- Oxidizers, inorganic
- Packers' salt
- Parting compounds (chemical foundry supplies)
- Patching plaster, household
- Penetrants, inspection
- Peppermint oil
- Plating compounds
- Pyrotechnic ammunition: flares, signals, flashlight bombs, and rockets
- Railroad torpedoes
- Red oil (oleic acid)
- Rifle bore cleaning compounds
- Rosin sizes
- Rubber processing preparations
- Rust resisting compounds
- Signal flares, marine
- Sizes: animal, vegetable, and synthetic plastics materials
- Sodium chloride, refined
- Soil testing kits
- Spearmint oil
- Spirit duplicating fluid
- Stearic acid
- Stencil correction compounds
- Tints and dyes, household
- Torches (fireworks)
- Vegetable oils, vulcanized or sulfurized
- Water treating compounds
- Water, distilled
- Waterproofing compounds
- Wintergreen oil
- Wood, plastic
- Writing ink and fluids
Fireworks Manufacturers Insurance - The Bottom Line
Fireworks manufacturers insurance policies come with different coverages, costs and exclusions. To see if your fireworks manufacturing company has the best fit insurance policies for your operation - 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
- Industrial Equipment
- Iron & Steel Foundries
- Lawn Mowers
- Leather Apparel
- Leather Goods
- 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
- Vegetable Juice
- Vending Machines
- 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.