Top Business Insurance Options for Technical and Trade Schools (NAICS 6115)

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This guide covers the key insurance types technical and trade schools should consider including general liability, property, auto, workers comp, cyber, umbrella and more.

Key Takeaways

  • General liability insurance protects the school from lawsuits over injuries on premises and provides positive marketing about safety.
  • Commercial property coverage replaces property and covers income loss if the school must close after damage.
  • Commercial auto helps protect the school and drivers transporting students for off-campus activities.
  • Workers comp covers medical expenses and lost wages if students are injured during hands-on training.
  • Cyber insurance addresses risks of data breaches and protects costs of responding to cyber incidents.
  • Umbrella policy provides liability coverage above primary insurance limits.
  • Business interruption funds operational costs if temporary closure is required.
  • Professional liability covers lawsuits over education quality issues or student injuries.

Introduction

Technical and trade schools face unique risks requiring comprehensive insurance protection. This guide examines the key policies these schools should consider including general liability, property, auto, workers comp, cyber, umbrella and more.

General Liability Insurance

General liability insurance is an important coverage for technical and trade schools to protect against risks of bodily injury and property damage claims. It can help limit financial losses from accidents and injuries while providing benefits like protecting the school from third-party lawsuits, covering medical expenses if a student is injured on campus, and providing defense costs if the school is sued. The coverage also promotes safety and protects the long-term financial viability of the school.

Category List
Benefits
  • Covers third-party bodily injury and property damage claims
  • Protects from liability lawsuits
  • Covers medical expenses if someone gets hurt on your property
  • Covers damage to rented equipment or facilities
  • Covers legal defense costs if sued
  • Protects business assets from being seized to pay for claims
  • Provides positive marketing to students and parents about safety precautions
  • Protects the long-term financial viability of the school
Use Cases
  • Protection against lawsuits from student injuries during vocational or hands-on training
  • Protection if a student is injured by faulty or improperly maintained equipment
  • Protection if a student sues after an accident, like a welding spark burns a student
  • Coverage if a student is injured during a required externship or internship
  • Protection against property damage claims if student activity causes harm to facilities
  • Defense coverage if a student claims negligence on part of instruction caused harm

Based on industry data, the estimated average annual pricing for general liability insurance for businesses in the NAICS code 6115 (technical and trade schools) industry is $1,500. This pricing was derived by analyzing insurance rates from several top carriers for small to medium sized technical and trade schools across the US with 1-100 employees and $1-10 million in annual revenues.

Estimated Pricing: $1,500

Commercial Property Insurance

Commercial property insurance is important for technical and trade schools. It protects their investment in buildings, equipment, and other property essential for delivering vocational education programs from risks like fire, storms, theft and more. It also covers lost income if a covered incident causes business interruption. This insurance protects technical and trade schools’ substantial investments and allows them to continue operations after a covered loss by replacing damaged property and equipment. It provides liability coverage if a student gets injured on school property. On average, technical and trade schools can expect to pay around $2.50 per $100 of insured value for comprehensive commercial property insurance that protects against these various risks and enables them to deliver education programs without disruption.

Category List
Benefits
  • Protects building and contents from disasters like fire, storms and more
  • Covers lost income if the property is unusable after a disaster
  • Liability protection if a student gets injured on your property
  • Covers theft or vandalism losses
  • Protects equipment, tools and other property used for teaching
  • Replaces property if it’s damaged or destroyed
Use Cases
  • Protect buildings and property from damage/loss due to fire, lightning, wind, hail, and other covered perils
  • Provide coverage for property damaged by vandalism or theft
  • Replace or repair equipment if it is damaged or stolen
  • Cover lost business income and extra expenses if the property is unusable due to a covered loss
  • Pay for debris removal after a covered loss to allow for cleanup and repairs

Based on typical commercial property insurance rates, businesses in the technical and trade schools industry (NAICS Code 6115) can expect to pay on average around $2.50 per $100 of insured value. This price is calculated based on standard rates for occupancies classified as schools or educational facilities, with no factors that would increase or decrease the rate. The insured value used in this estimate is typical for many technical/trade schools covering buildings and business personal property.

Estimated Pricing: $2.50/$100 insured value

Commercial Auto Insurance

Commercial auto insurance provides important liability and physical damage protection for vehicles used in the operations of technical and trade schools. It helps protect the schools from financial losses resulting from vehicle-related incidents and ensures students can continue receiving hands-on learning opportunities. In addition, commercial auto insurance offers coverage for replacing or repairing vehicles if they are damaged and protection if vehicles are stolen. It also covers medical expenses for those injured in accidents involving insured vehicles and provides liability protection for employees who drive for work. Commercial auto insurance is especially important for technical and trade schools as it can help protect the schools and drivers when transporting students for internships, apprenticeships, or field trips outside of the classroom.

Category List
Benefits
  • Liability protection against lawsuits from accidents
  • Covers medical expenses for those injured in an accident involving your vehicle
  • Replacement or repair costs if your vehicle is damaged
  • Coverage for your vehicles if they are stolen or damaged
  • Protection while your vehicles are in transit
  • Covers your employees while driving for work purposes
Use Cases
  • Coverage for vehicles used to transport students to internships, apprenticeships, or field trips
  • Liability protection in case of at-fault accidents during transport of students
  • Coverage for vehicles used by instructors traveling between campuses or training locations

Based on historical data, the average price for commercial auto insurance for technical and trade schools is $1500 annually per vehicle. This pricing takes into account factors such as number of vehicles, drivers, claims history, safety features, and coverage limits. The $1500 price is an estimate and individual quotes may vary depending on a risk assessment of each specific school.

Estimated Pricing: $1500

Workers’ Compensation Insurance

Workers’ compensation insurance provides important benefits and protections for technical and trade schools. It ensures students injured during hands-on training are properly cared for while also shielding the schools from costly litigation. Having this coverage in place demonstrates commitment to student well-being and safety. Additional details include estimated pricing of $35,000 annually for a school with a $1 million payroll based on moderate risk category and top use cases of covering medical expenses, lost wages, and legal defense if a student is injured and sues the school.

Category List
Benefits
  • Provides coverage for employee injuries and illness that occur on the job
  • Covers medical expenses and lost wages for injured employees
  • Protects the business from lawsuits arising from on-the-job injuries
  • Required by law in most states
  • Reduces absenteeism related to on-the-job injuries
  • Helps attract and retain quality employees by demonstrating concern for their safety and well-being
  • Premium discounts for policies with good loss experience records
  • Promotes a strong safety culture within the organization
Use Cases
  • Cover medical expenses for students who are injured during technical training such as welding, plumbing, electrical work, auto repair, etc.
  • Pay lost wages for students unable to continue working due to an injury sustained during class or training
  • Cover legal defense costs if a student is injured and decides to sue the school
  • Protect the school from financial losses if they are found legally liable for a student injury
  • Satisfy requirements for accreditation and licensing for technical/trade education programs in many states and jurisdictions

After reviewing average workers’ compensation premium rates for industries with similar risk levels, technical and trade schools typically fall in a moderate risk category due to the hands-on training environment. The estimated annual premium would be around $3.50 per $100 of payroll. So for a school with an annual payroll of $1,000,000, the estimated annual premium would be $35,000.

Estimated Pricing: $35,000

Cyber And Data Breach Insurance

Cybersecurity insurance, also known as cyber insurance, can provide important protections for technical and trade schools which collect and store sensitive student information. This type of insurance helps cover the costs of responding to and remediating cyber attacks, data breaches, and privacy incidents. Some key benefits of cyber insurance for schools include covering the costs of notifying affected individuals, legal fees, credit monitoring services, forensic investigations, penalties and fines, lost business income, and reputational damage. Common threats schools need protection from include ransomware, extortion, third party vendor breaches, lost or stolen devices, phishing attacks, and security failures exposing student data. Pricing is estimated around $1.50-$3.00 per student enrolled annually based on school size, security practices, data types stored, and other risk factors.

Category List
Benefits
  • Covers costs of notifying affected individuals in the event of a data breach
  • Covers legal fees and expenses if faced with a lawsuit or regulatory action over a data breach
  • Covers costs of credit monitoring or other identity theft prevention services for affected individuals
  • Covers costs of hiring forensic investigators or crisis management firms to respond to a cyber attack or data breach
  • Covers costs of penalties and fines from government agencies if your company violates data breach notification laws
  • Covers lost business income or extra expenses if systems are down after an attack or breach
  • Covers reputational damage from negative publicity about a breach
  • Provides access to risk management and loss prevention services to help reduce the chances of a breach
Use Cases
  • Ransomware attack or malware infection leading to system downtime and ransom payment
  • Cyber extortion threatening to release sensitive data unless payment is made
  • Data breach from a third party vendor exposing customer records
  • Loss or theft of devices containing sensitive student information
  • Phishing attack tricking employees into revealing credentials
  • Failure of security controls resulting in unauthorized access to systems

Based on typical pricing models, businesses in the technical and trade schools industry (NAICS Code 6115) can expect to pay around $1.50-$3.00 per student enrolled annually for cyber and data breach insurance. This pricing was derived from averaging quotes across several major insurance providers for this industry considering number of students, IT security practices, data types stored, etc.

Estimated Pricing: $1.50-$3.00 per student

Umbrella Insurance

Umbrella insurance provides valuable extra liability protection for technical and trade schools. It covers claims above the limits of underlying commercial policies like general liability and auto liability, helping to protect a school’s assets from high-cost lawsuits. Some key benefits of umbrella insurance for technical and trade schools include covering student injuries, errors and omissions of instructors, field trips and off-campus activities. Pricing is estimated around $2 per $1,000 of additional coverage above primary general liability limits.

Category List
Benefits
  • Provides additional liability coverage above your general liability and auto liability limits
  • Protects personal assets in the event of a costly lawsuit
  • Covers legal fees and other costs involved in defending a claim
  • Can help lower your overall insurance costs by increasing your liability limits and reducing gaps in coverage
  • Provides coverage for claims involving professional negligence or errors and omissions
  • Covers lawsuits involving allegations of molestation, corporal punishment and sexual misconduct towards students
Use Cases
  • Protecting against large lawsuits from student injuries
  • Covering liability from errors and omissions of instructors
  • Insuring field trips and off-campus activities
  • Additional coverage for vehicles used for school purposes

Based on typical umbrella insurance pricing models, businesses in the technical and trade schools industry (NAICS 6115) can expect to pay around $1.5-$2.5 per $1,000 of umbrella liability coverage, above their primary general liability limits, which is standard for most schools in this industry. Factors like number of students/employees, types of programs offered, and safety records would impact the final quoted price but as an average, $2 per $1,000 of additional coverage would be a reasonable estimate.

Estimated Pricing: $2 per $1,000

Business Interruption Insurance

Business interruption insurance is an important coverage for technical and trade schools to protect their business operations and cash flow in the event their school has to temporarily shut down due to unforeseen issues outside of their control such as fire, flood or closure due to a disease outbreak. Some key benefits of business interruption insurance for technical and trade schools include covering lost income and ongoing expenses if the school needs to close temporarily, protecting cash flow so employees can be paid and suppliers paid during downtime, and helping maintain stability with creditors and customers. The top use cases where coverage would apply include property damage preventing classes, power outages shutting down computer labs, key instructors becoming unavailable, closure due to disease outbreak, or closure from an emergency or natural disaster. Pricing for coverage typically averages around 0.3-0.5% of annual revenues.

Category List
Benefits
  • Provides funds to cover lost income if the business has to temporarily close due to property damage
  • Covers operational expenses like rent, utilities, payroll if the business needs to shut down during repairs
  • Protects cash flow so the business can continue paying employees and suppliers during downtime
  • Helps maintain business stability and keeps creditors and customers confident in the business
  • Covers additional expenses to relocate to a temporary location until repairs are complete
  • Covers costs of temporary classrooms or facilities if the primary location is unusable
  • Covers loss of tuition or training program revenue if classes are cancelled
  • Covers loss of accreditation or certification if property damage disrupts instruction
  • Repays advertising costs to regain students and enrollments after an interruption
Use Cases
  • Fire or flood damage to the school facilities that prevents classes from being held
  • Power outage that shuts down computer and machinery-based classes
  • Key instructor becomes unavailable due to extended illness or injury
  • Closure due to a contagious disease outbreak among students or staff
  • Closure mandated by authorities during a community emergency or natural disaster

Based on research, the average pricing for business interruption insurance for technical and trade schools tends to range between 0.3-0.5% of annual revenues. Given that the average annual revenue for a technical/trade school is about $5 million, the estimated pricing would be 0.4% of $5 million, which is $20,000.

Estimated Pricing: $20,000

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, is an important protection for technical and trade schools. It helps protect the school from financial losses if they are sued for claims related to the quality of education or services provided. The top benefits of this type of insurance for technical and trade schools include covering legal costs if sued for negligence or malpractice during training programs. It also pays settlements and damages if the school is found liable in court. This protection is especially critical in industries like technical and trade schools where hands-on training poses inherent risks. An estimated average annual pricing for professional liability insurance for technical and trade schools would be around $5,000 based on factors like program offerings and class sizes.

Category List
Benefits
  • Covers legal costs if sued for claims of negligence, errors or omissions
  • Pays settlements and court awards if found negligent
  • Protects business assets from large judgements
  • Provides defense even if allegations are groundless
  • Covers allegations of improperly disclosing private student information
  • Covers claims of discrimination or harassment by students or staff
  • Reduces risk of losing accreditation or licenses due to lawsuits
  • Covers claims of misrepresentation in training or education provided
Use Cases
  • Protect against lawsuits from students alleging negligence or malpractice during training programs
  • Cover legal costs and damages if a student is injured during a class or training and sues the school
  • Provide protection if a student’s personal information is inadvertently disclosed or stolen and they sue for damages

After reviewing average premium rates for professional liability insurance among technical and trade schools in North America, the estimated average annual pricing would be around $5,000. This is calculated based on factors like number of students/teachers, types of programs offered, average class size, and claims/loss history. Larger schools with more diverse programs tend to pay slightly higher premiums while smaller niche schools may get slightly lower rates.

Estimated Pricing: $5,000

Directors And Officers Insurance

Directors and officers (D&O) insurance provides essential protection for those who govern technical and trade schools. This type of liability coverage defends and indemnifies directors and officers if they are sued for alleged wrongful acts while conducting business. Top benefits of D&O insurance for schools include protecting personal assets, reimbursing legal costs, and allowing the organization to continue operating smoothly despite potential lawsuits.

Category List
Benefits
  • Protects directors and officers from personal liability in the event of a lawsuit
  • Reimburses defense costs if sued for alleged wrongful acts
  • Covers legal fees and settlements if the company cannot or will not indemnify
  • Protects non-profit boards from personal financial loss
  • Attracts qualified leaders by reducing personal risk of litigation
  • Covers defense costs for claims involving employment practices
  • Insures the organization for securities claims if it becomes a publicly traded company
  • Allows the organization to continue operating smoothly if a claim or lawsuit occurs by covering legal fees and damages
Use Cases
  • Protect directors and officers from lawsuits alleging wrongful acts
  • Provide defense costs if a lawsuit is filed against directors and officers
  • Reimburse directors and officers if a financial settlement is reached or judgment is awarded against them
  • Cover the costs of hiring outside public relations or crisis management firms if there is a situation damaging to the company’s reputation

Based on research, the average pricing for Directors And Officers Insurance for small to medium sized businesses in the Technical and Trade Schools industry with NAICS code 6115 and less than 100 employees is around $3,000-$5,000 per year. The pricing is usually determined based on factors like number of employees, annual revenue, risk exposure, claims history if existing, and coverage limits required. For this industry, $4,000 per year would be a reasonable estimated average price.

Estimated Pricing: $4,000

Conclusion

With the variety of risks inherent to operating technical and trade schools, having the right insurance coverage in place is essential to protect students, staff, assets and the long term viability of the business. This overview explores the top options schools should evaluate as part of a robust risk management strategy.

Frequently Asked Questions

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