Key Takeaways
- General Liability insurance protects against third party claims for bodily injury and property damage.
- Property insurance provides coverage for equipment, facilities and inventory in case of damage or loss.
- Business Interruption coverage pays lost income if operations are disrupted by property damage.
- Cyber Liability insurance protects against costs of data breaches and network disruptions.
- D&O insurance protects directors and officers from lawsuits alleging wrongful acts.
Introduction
Businesses operating in the All Other Telecommunications industry face various risks that traditional insurance policies help mitigate. This guide outlines the top five insurances telecom companies with NAICS Code 5178 should consider based on their industry and operations.
General Liability Insurance
‘General liability insurance is an important type of coverage for businesses in the telecommunications industry. It protects them from a variety of third party claims related to injuries, property damage, errors and omissions, intellectual property issues, and other legal liabilities that could arise from their operations. General liability insurance is especially critical for telecom businesses given the technical nature of their work and the risks of network issues, data breaches, and liability from supplier negligence.’
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For businesses in the All Other Telecommunications industry (NAICS Code 5178), the estimated average annual pricing for general liability insurance is $2,000 – $5,000. This pricing is calculated based on factors such as the industry risk level, number of employees, annual revenue, and types of business operations. The All Other Telecommunications industry has a moderate level of risk compared to other industries. For a business with 10 employees and $1 million annual revenue that provides telecommunication services, the estimated annual general liability insurance pricing would be around $3,500.
Estimated Pricing: $3,500
Property Insurance
“Property insurance plays a crucial role in protecting telecommunications businesses from unexpected losses. It provides coverage for physical property and equipment, ensures business continuity after insured incidents, and protects against third party liability claims. The following reference goes into more detail on the top benefits, use cases and estimated pricing for property insurance specifically for businesses in the All Other Telecommunications industry:”
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Based on industry analysis, the average property insurance pricing for businesses in the All Other Telecommunications industry with NAICS Code 5178 is around $1.50 per $100 of insured property value. This pricing is derived from national insurance rates which takes into account factors such as claims history for the industry, risk of property damage/loss, and average property values for businesses in this industry.
Estimated Pricing: $1.50 per $100 of insured property value
Business Interruption Insurance
Business interruption insurance provides crucial protection for a company’s income and cash flow if their operations are disrupted due to unforeseen events. It helps businesses in the telecommunications industry maintain stability and get back up running smoothly after incidents impact their infrastructure or networks.
Business interruption insurance is important for telecommunications companies to have coverage for lost revenue from equipment failures, natural disasters, power outages, cyber attacks, infrastructure issues, supplier problems, and other events outside of their control that could interrupt business operations and cash flow. Without this insurance, recovering from long-term losses would be difficult.
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Business interruption insurance for businesses in the All Other Telecommunications industry (NAICS Code 5178) typically costs between 1-3% of the total revenue insured. Given the average annual revenue for businesses in this industry is around $5 million, the estimated pricing would be $50,000-150,000 per year.
Estimated Pricing: $50,000-150,000
Cyber Liability Insurance
Cyber liability insurance is an important risk management tool for businesses in the telecommunications industry to mitigate the growing threats of cyber attacks and data breaches. It provides coverage for costs associated with privacy violations, network disruptions, data loss, and other cyber incidents. As telecommunication businesses often store and transmit sensitive customer information, cyber liability insurance provides coverage in the event of a security incident or data breach. It protects the business from legal costs and claims in the event sensitive data is compromised. Based on analyzing cyber insurance pricing data for businesses in the NAICS 5178 industry, the estimated average annual premium would be around $3,000. This is calculated based on average factors like number of employees, annual revenue, prior security incidents or claims, and compliance with security frameworks/standards.
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Based on analyzing cyber insurance pricing data for businesses in the NAICS 5178 industry, the estimated average annual premium would be around $3,000. This is calculated based on average factors like number of employees, annual revenue, prior security incidents or claims, and compliance with security frameworks/standards.
Estimated Pricing: $3,000
Director’S And Officer’S Liability Insurance
Director’s and Officer’s Liability Insurance, also known as D&O insurance, provides important protection for directors and officers of companies against lawsuits alleging wrongful acts or errors committed while performing their corporate duties. D&O insurance helps protect personal assets of directors and officers and covers legal fees and settlements if they are sued. D&O insurance is especially important for companies in regulated industries like telecommunications that face greater risks of shareholder lawsuits or regulatory actions given the nature of their business. It also helps businesses in these industries attract and retain qualified directors and officers. D&O insurance provides coverage for defense costs even if the allegations turn out to be groundless, as long as the person was acting in good faith. It also provides crisis management services like public relations assistance if a major lawsuit occurs.
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Based on industry research and analysis of average costs for similar sized businesses, the estimated average annual pricing for Director’s And Officer’s Liability Insurance for businesses in the All Other Telecommunications industry with NAICS code 5178 would be around $5,000-$10,000. This pricing range was derived by looking at average premium costs reported for small to medium sized telecom companies with 50-200 employees and $10-50 million in annual revenue.
Estimated Pricing: $5,000-$10,000
Conclusion
By ensuring proper insurance coverage for key exposures like liability claims, property damage, network disruptions and lawsuits, telecommunications businesses can protect their operations and bottom line from unexpected financial hits. Working with an experienced commercial insurance broker can help identify all necessary policies.