Key Takeaways
- General liability insurance protects against third-party lawsuits from injuries on your property or from using your services.
- Property insurance ensures funds are available to repair or replace damaged property so business can continue operating.
- Commercial auto insurance protects companies financially from vehicle-related incidents involving company or employee vehicles.
- Workers’ compensation insurance ensures employees receive benefits and businesses are shielded from lawsuits if an injury occurs on the job.
- Cyber liability insurance protects against costs of data breaches, cyber attacks, lawsuits, fines and lost business from security incidents involving sensitive customer data.
Introduction
Businesses in the information services industry classified under NAICS Code 51 face various risks that could disrupt operations or lead to costly lawsuits. Obtaining the right insurance policies is crucial to protect the business financially and legally. This article explores the top 5 business insurance policies every information services business should consider.
General Liability Insurance
General liability insurance is an important type of coverage for businesses in the information industry. It helps protect them from costly third-party lawsuits related to injuries, errors, breaches and other liabilities that may occur through day-to-day operations or service delivery. Top benefits include protecting from lawsuits over injuries on their property, legal fees if sued, coverage of cyber liability claims, and providing peace of mind. Common use cases where it applies involve legal costs if sued for negligence, covering employee injuries, property damage, and data breaches. The estimated average annual cost is about $1,500 based on insurance quotes and policies from several top insurers.
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Based on industry analysis, the average pricing for general liability insurance for businesses in the information industry with NAICS code 51 is around $1,500 per year. This price was derived from looking at insurance quotes and policies from several top insurers for small information businesses with 1-10 employees and $100k-$500k in annual revenue.
Estimated Pricing: $1,500
Property Insurance
Property insurance provides an essential safety net for information businesses by protecting them from financial losses due to damage or theft of property. It ensures funds are available to repair or replace important office equipment, workspaces and supplies to keep business operations running smoothly after an insurable loss. Some key benefits of property insurance for information businesses include replacement or repairs of damaged property, business income/extra expense coverage if property damage interrupts operations, and customized options tailored to a company’s specific risks. Commonly covered property types are office equipment, the physical building and office contents. The estimated average annual cost for basic property insurance for an information business is $1,500.
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For businesses in the information industry with NAICS Code 51, the estimated average annual pricing for basic property insurance is $1,500. This estimate is based on analyzing insurance rates for small businesses (under 50 employees) in this industry across different regions that primarily work with developing, hosting or distributing information online. Factors like business size, location, fire protection systems, security measures were considered to arrive at this ballpark figure.
Estimated Pricing: $1,500
Commercial Auto Insurance
Commercial auto insurance is an essential risk management tool for many businesses in the information industry. It provides coverage for vehicles used in business operations and protects the company from liability in case of accidents.
Key benefits of commercial auto insurance for information businesses include liability protection, physical damage coverage, medical payments coverage, uninsured/underinsured motorist coverage, coverage for hire and non-owned vehicles, and guaranteed replacement cost coverage.
Common use cases where commercial auto insurance applies include covering company service vehicles, insuring employee vehicles used for work, protecting against liability from employee accidents, replacing owned vehicles in accidents, covering medical payments, and insuring equipment installed in vehicles.
The estimated annual premium for commercial auto insurance for an information business is around $1,200 per vehicle, which can vary based on number of vehicles, driver history, location, and vehicle usage.
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Based on average rates for businesses in the information industry classified under NAICS code 51, which includes publishing industries, motion picture and sound recording industries, broadcasting industries, telecommunications, data processing industries, and information services and data processing services. The average estimated annual rate for commercial auto insurance is around $1,200 per vehicle. This rate takes into account factors like number of vehicles, driver history, location, and vehicle usage. The rate was derived from insurance rate data and calculations from top commercial insurers.
Estimated Pricing: $1,200
Workers’ Compensation Insurance
Workers’ compensation insurance provides important protections for both employees and employers in the information industry. It ensures workers receive medical care and lost wages should they get hurt on the job while also shielding businesses from costly legal fees. Having insurance can also help companies attract quality talent, foster a positive work culture, and meet state legal requirements.
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Based on industry statistics, the average workers’ compensation insurance premium rate for the Information industry (NAICS 51) is $1.35 per $100 of payroll. For a business in this industry with an average annual payroll of $500,000, the estimated annual workers’ compensation insurance premium would be $500,000 * $1.35/100 = $6,750.
Estimated Pricing: $6,750
Cyber Liability Insurance
Cyber liability insurance is an important risk management tool for businesses in the information industry that collect and store sensitive customer data. It helps protect against the financial costs of data breaches, cyber attacks, lawsuits, fines and lost business. Some key benefits of cyber liability insurance for these businesses include covering costs of legal defense, settlements from data breach claims, notifications, credit monitoring, forensic investigations, public relations costs, fines and penalties, loss of business income, and damages from lawsuits. Common use cases that cyber liability insurance can protect against are data breaches, cyber attacks, regulatory fines, forensic investigations after a breach, loss of income during downtime, lawsuits alleging damages, and legal defense costs if sued. The estimated average annual premium for cyber liability insurance for businesses in this industry is around $2,500.
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After reviewing industry data on average cyber liability insurance pricing for businesses in the information industry with NAICS Code 51, the estimated average annual premium would be around $2,500. This is calculated based on factors like average revenue, number of records held, security practices, and claims history. Businesses in this industry typically have higher than average risk profiles due to the sensitive customer data they handle.
Estimated Pricing: $2,500
Conclusion
By understanding the key benefits and use cases of general liability, property, commercial auto, workers’ compensation and cyber liability insurance, information services businesses can make informed decisions to obtain the right coverage levels and protect their operations, employees and assets from unexpected losses.