Key Takeaways
- General liability insurance protects against third party claims for injuries or property damage from construction operations.
- Commercial property insurance covers company assets like equipment, vehicles, materials and completed work from losses.
- Commercial auto insurance addresses risks of operating company vehicles for transportation to jobsites.
- Workers’ compensation covers medical and lost wage costs for on-the-job employee injuries as required by law.
- Professional liability protects against claims of negligent work, errors and omissions.
- Umbrella insurance increases liability limits above primary policies.
- Directors and officers coverage protects company leaders from lawsuits related to their roles.
Introduction
Businesses in the utility system construction industry face an array of risks associated with their daily operations. From working with heavy equipment to transporting materials and crews to jobsites, accidents can easily happen. To protect the financial health of the company, it’s important for contractors in this field to have the proper insurance in place. This article examines the top business insurance options utility contractors should consider.
General Liability Insurance
General liability insurance is an important coverage for businesses in the utility system construction industry. It protects them from expensive lawsuits in cases where someone is injured or property is damaged from their construction operations. General liability insurance offers utility contractors protection from a variety of risks associated with their business operations through claims coverage, legal defense costs if sued, and coverage for completed work.
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Based on typical industry factors such as payroll, number of employees, risk level of the work, history of claims etc, the estimated average annual pricing for general liability insurance for businesses in the NAICS 2371 Utility System Construction industry is around $5,000 per year. The pricing is calculated based on an average payroll of $1,000,000 and 10 employees performing moderate to high risk construction work such as installing underground utility lines and connections.
Estimated Pricing: $5,000
Commercial Property Insurance
Commercial property insurance is an essential risk management tool for businesses in the utility system construction industry. It provides financial protection for physical property and equipment assets against risks like fire, storms, accidents, theft and liability issues that are outside of the business’s control. The top benefits of coverage include protection for equipment, tools and vehicles, materials and supplies, work in progress, and liability for injuries on worksites. The estimated annual premium for a construction business in this industry with $500,000 of insured property value would be between $7,500 to $11,250.
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Based on average commercial property insurance rates for businesses in the Utility System Construction industry (NAICS Code 2371), the estimated annual pricing would be around $1.50 to $2.25 per $100 of insured property value. Rates are often calculated based on factors like location, claims history, protection class (measuring fire protection capabilities), and building characteristics. Using the industry average property value of around $500,000, the estimated annual premium would be $7,500 to $11,250.
Estimated Pricing: $7,500 to $11,250
Commercial Auto Insurance
Commercial auto insurance provides key protections for businesses in the utility system construction industry that regularly rely on company vehicles and equipment for their daily operations. Some of the top benefits of commercial auto insurance for these businesses include liability protection against accidents and injuries, coverage for physical damage to vehicles, and medical payments for those injured in an insured vehicle. It helps address risks from operating a fleet for business purposes. The estimated average annual pricing for commercial auto insurance for businesses in this industry is around $1,500 per vehicle.
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Based on research, the average annual commercial auto insurance pricing for businesses in the utility system construction industry with NAICS code 2371 is around $1,500 per vehicle. This takes into account factors like the types of vehicles owned (usually trucks, vans, excavators etc.), average miles driven, liability limits, and the risk profile of the industry.
Estimated Pricing: $1,500
Workers’ Compensation Insurance
Workers’ compensation insurance provides critical protections and benefits for businesses in the high-risk utility system construction industry. This industry faces hazards such as working at heights, operating heavy machinery, exposure to weather elements, and potential injuries from falls, electrocution, traffic accidents and more. Having the proper insurance can help cover medical expenses, lost wages, disability benefits and liability costs if employees face job-related injuries or illnesses. Workers’ compensation laws are mandatory in all states for businesses with one or more employees. This type of insurance helps companies attract and retain quality talent by providing peace of mind for on-the-job injuries. It also reduces employee turnover costs associated with replacing injured workers. As the utility system construction industry involves activities like pole and tower installation, overhead line work, excavation and other tasks using heavy equipment, on-site risks are high. Insurance provides protection when accidents do occur on jobsites or in transportation between worksites. It shields firms from potentially devastating lawsuit expenses and liability claims.
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Based on research, the average workers’ compensation insurance rate for businesses in the utility system construction industry (NAICS Code 2371) is around $2.50 per $100 of payroll. This rate is derived from national industry data and factoring in the industry’s risk level which involves working with large equipment and within rights of way. The final policy pricing would depend on individual business factors such as employee job duties and claims history.
Estimated Pricing: $2.50 per $100 of payroll
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, protects businesses in the utility system construction industry from financial losses due to claims of negligence, faulty work, or professional errors. The estimated annual pricing for professional liability insurance for businesses in the NAICS code 2371 utility system construction industry is around $5,000 – $10,000 per year based on factors like company size, annual revenue, number of employees, types of services provided, claims history, and risk exposures. Professional liability insurance provides important benefits like coverage for legal defense costs if sued, protection of business assets from lawsuits, coverage for accidental damages claims, and maintaining operations if a claim is made. It also helps contractors meet insurance requirements in contracts and attract clients by demonstrating financial responsibility in this high-risk industry.
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Based on the average pricing data from top insurance providers for this industry, the estimated annual pricing for professional liability insurance for businesses in the utility system construction with NAICS code 2371 is around $5,000 – $10,000 per year. This pricing range took into account factors like the company size, annual revenue, number of employees, types of services provided, claims history, and risk level exposures. It is common for insurance providers to derive pricing through actuarial analysis of historical loss data specific to this industry type.
Estimated Pricing: $5,000 – $10,000
Umbrella Insurance
Umbrella insurance provides important additional liability protection for businesses in the utility system construction industry. With NAICS code 2371, these companies face risks from operating heavy equipment and working with hazardous materials that could lead to costly legal claims exceeding standard insurance limits. Key benefits include increasing protection beyond standard policies, offsetting costs of legal claims, covering gaps in primary coverage, and protecting personal assets of business owners. Common uses involve addressing risks from pollution exposures, injuries involving subcontractors, and protecting owners from duties-related liability claims. Pricing for $1 million in coverage is estimated around $1,000-$2,000 annually based on industry factors.
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Based on information from insurance carriers and agencies that provide umbrella insurance to utility system construction businesses, the estimated average pricing for an umbrella insurance policy with $1 million coverage would be around $1,000-$2,000 annually. This pricing is derived considering risk factors such as the hazardous nature of construction work as well as average claims in this industry.
Estimated Pricing: $1,500
Directors And Officers Insurance
Directors and officers insurance, also known as D&O insurance, is an important policy for businesses in the utility system construction industry. It provides protection for personal assets of directors and officers from legal liabilities incurred through lawsuits related to their roles and responsibilities within the company. Given the risks involved with large infrastructure projects in this industry, D&O insurance is especially crucial to help attract and retain top talent by reducing risks for company leaders. It covers legal costs and settlements that may arise from shareholder lawsuits, regulatory investigations, employment practices claims, and construction defect litigation alleging negligence by directors and officers in overseeing projects.
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Based on research of insurance rates for different industries, the estimated average price for Directors And Officers Insurance for businesses in the Utility System Construction industry with NAICS code 2371 would be around $5,000 – $10,000 per year. This pricing range takes into account factors like the risks associated with construction projects, average revenues for companies in this industry, and common coverage amounts for policies in this industry.
Estimated Pricing: $5,000 – $10,000
Conclusion
By evaluating coverage needs and selecting from the essential business insurance types discussed, contractors in the utility system construction industry can gain stronger risk management and protect their operations from potential financial losses. Having the right insurance tailored to this industry’s exposures helps provide assurance to focus on completing infrastructure projects safely and successfully.