A Guide to Heavy Industry Insurance in Texas

Texas is a hub for heavy industry, from manufacturing and fabrication to energy and industrial services. These businesses are the engines of our economy, but they operate in a world of heightened risk. The sheer scale of operations, dealing with large machinery, hazardous materials, complex supply chains, and a significant workforce, demands a comprehensive and specialized approach to insurance.

A standard business policy simply won’t cut it. At Rollo Insurance, we understand the unique and complex risks that heavy industry faces in Texas, and we’re here to help you build a fortress of protection around your business.

The Unique Risks of Heavy Industry

Heavy industry is a high-stakes environment where a single error can lead to a catastrophic event. Here are the primary risks your insurance must address:

• Catastrophic Operational Failures: A well blowout in the energy sector or a malfunction in a manufacturing plant can result in explosions, fires, and the uncontrolled release of materials. The costs to contain these events and resume operations are immense.
• Environmental and Pollution Liability: The use and storage of chemicals, refrigerants, solvents, and other hazardous materials create a high risk of accidental spills. Even minor incidents can lead to massive cleanup costs, regulatory fines, and lawsuits for third-party bodily injury or property damage.
• Complex Workers Compensation Claims: The machinery and physical nature of the work increase the chance of severe employee injuries. Workers comp claims can be complicated. In Texas, where this coverage isn’t always required by law, choosing not to carry it can expose your business to unlimited liability in a lawsuit.
• Product Liability: If your business manufactures a product or a component that is later found to be defective and causes harm, you can be held financially responsible for legal defense, settlements, and product recalls.
• Cybersecurity Risks: Today’s heavy industry depends on advanced digital systems for production, logistics, and operations. A cyberattack can halt everything, causing major business interruption losses.
• Commercial Auto Verdicts: Transporting materials and equipment on public roads is a significant risk. In Texas, lawsuits from commercial vehicle accidents can lead to multi-million dollar verdicts that go well beyond standard policy limits.

Essential Insurance Coverages for Texas Heavy Industry

A strong insurance plan for heavy industry needs multiple layers of protection. These policies work together to reduce exposure across all areas of your operation:

• Commercial General Liability (CGL) Insurance: This foundational policy protects your business from third-party injury or property damage claims caused by your operations. For heavy industry, it’s important to ensure your CGL policy does not contain pollution or specialty work exclusions.
• Workers Compensation Insurance: This is essential if you have employees. It helps cover medical bills and lost wages for work-related injuries, and protects your business from potential lawsuits.
• Commercial Auto and Fleet Insurance: If you use trucks, vans, or heavy-duty vehicles, this coverage is required in Texas. For larger fleets, you may benefit from streamlined management and reduced cost per vehicle. Vehicles over 26,001 pounds have specific liability limits.
• Commercial Property Insurance: This policy covers physical assets such as buildings, equipment, inventory, and warehouses against damage from fire, storms, vandalism, and other risks.
• Environmental and Pollution Liability: This specialty coverage fills the gap left by many general liability policies. It protects you from cleanup costs and third-party claims related to pollution incidents.
• Products Liability Insurance: If you manufacture or sell products, this covers legal costs and damages if a defective item causes injury or damage.
• Inland Marine Insurance: Also known as an equipment floater, this policy protects valuable tools and machinery while in transit, stored off-site, or used on temporary job locations.
• Business Interruption Insurance: If an incident shuts down your operations, this coverage helps replace lost income and pay ongoing expenses until you’re back in business.
• Umbrella and Excess Liability Insurance: With the possibility of large claims or verdicts in Texas, umbrella coverage adds an extra layer of financial protection above your standard policy limits.

Average Cost of Insurance for Heavy Industry in Texas

There’s no one-size-fits-all price for heavy industry insurance. Costs are based on a variety of factors unique to your business, including:

• Type of Industry: The risks for a chemical plant are not the same as those for a steel fabricator.
• Revenue and Payroll: Larger operations with more employees typically pay more for coverage.
• Claims History: A history of frequent or serious claims will increase your rates.
• Location: Areas prone to hurricanes, flooding, or close to major populations may face higher premiums.
• Safety Programs and Risk Management: Businesses with strong safety training, fewer claims, and proactive risk control often receive better rates.

For general reference, a basic general liability policy for a small to mid-sized manufacturing business in Texas may start around $1,500 to $5,000 per year. Adding workers comp, commercial auto, and specialty coverages like pollution or product liability can push that number significantly higher.

Partnering for Protection with Rollo Insurance

Heavy industry is not for the faint of heart, and neither is insuring it. You need a coverage plan that is as tough and thorough as your operation. At Rollo Insurance, we specialize in helping Texas-based industrial businesses navigate the complex world of risk and coverage.

Reach out today for a custom consultation. We’ll help you identify potential gaps, compare coverage options, and build a solid foundation of protection so you can stay focused on what you do best.