Key Takeaways
- General liability, workers’ compensation, commercial property, commercial auto, cyber liability, business interruption and aircraft/hangar liability insurance policies are usually required.
- Estimated insurance costs are provided for typical premium amounts businesses in this industry can expect to budget.
- Benefits, uses cases and considerations for each major insurance type are outlined to help business owners determine their coverage needs.
Introduction
Businesses involved in support activities for air transportation face unique risks and insurance requirements due to handling aircraft, operating at airports, and supporting critical infrastructure. Several core insurance policies are essential to protect these companies financially and enable continuity of operations. This article provides an overview of the key business insurance types needed for companies with NAICS code 4881.
General Liability Insurance
General liability insurance provides important coverage and financial protection for businesses that support air transportation activities. It protects them from costly lawsuits if injuries, property damage or other incidents occur from their various operations and services related to aircraft. General liability insurance also helps cover legal defense costs if a business is sued, protects personal assets if the business cannot pay, and provides coverage for common scenarios in this industry like aircraft damage during maintenance. General liability insurance is essential for businesses in this industry given the risks involved with servicing aircraft and operating at airports.
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Based on typical insurance industry data and pricing models, general liability insurance for businesses in the support activities for air transportation industry (NAICS 4881) on average costs between $1.50-$2.50 per $100 of revenue. This rate is derived based on the industry risk profile which involves activities like aircraft servicing, cleaning, cargo handling that carry some operational hazards. The annual policy minimum premium is usually around $1,000.
Estimated Pricing: $1,500 – $2,500 annual premium
Workers’ Compensation Insurance
“Workers’ compensation insurance provides critical protections for both employers and employees in high-risk industries like support activities for air transportation. It ensures injured workers receive benefits without needing to prove fault, while protecting employers from costly lawsuits. Benefits of workers’ compensation insurance for businesses in this industry include covering medical expenses and lost wages for injured employees, as well as lowering costs by avoiding expensive legal fees and settlements from injury lawsuits. In addition, it demonstrates commitment to employee safety and attracts quality job applicants by providing protection for on-the-job injuries.”
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Based on industry risk factors and average claim costs, the estimated average pricing for workers’ compensation insurance for businesses in the Support Activities for Air Transportation with NAICS Code 4881 is around $1.75 per $100 of payroll. This rate was derived using industry risk ratings and loss experience data to calculate the pure premium which is then loaded for other expenses and profit margins customary in the insurance industry.
Estimated Pricing: $1.75/100 of payroll
Commercial Property Insurance
Commercial property insurance provides important protections for businesses in the support activities for air transportation industry by safeguarding physical assets, equipment, buildings and property that are essential for daily operations. It also covers liability risks and loss of income to help maintain business continuity if a property is damaged. The top benefits of this insurance include protecting property from losses due to incidents like fire and storms, covering buildings, vehicles and equipment, providing liability protection, and facilitating financing by showing adequate risk management to lenders. The key use cases in this industry involve protection against disasters, coverage for property and liability risks from injuries on premises, and replacement cost and business interruption protections. Estimated annual premiums for a typical business in this sector range from $7,500 to $10,000 based on $5M in insured assets.
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Based on typical rates for aircraft support industries, the average annual pricing for commercial property insurance would be in the range of $1.50-$2.00 per $100 of insured assets. Factors that influence pricing include location, types of operations, safety record, security measures, and claims history. For a typical business in this industry with $5M in insured assets, the estimated annual premium would be $7,500-$10,000.
Estimated Pricing: $7,500-$10,000
Commercial Automobile Insurance
Commercial automobile insurance is important for businesses in the support activities for air transportation industry (NAICS 4881) as it provides key liability protections and financial coverage for vehicles used in transportation operations to and from airports. Some key benefits of commercial auto insurance for these businesses include covering liability from vehicle accidents, reimbursing repair/replacement costs, and providing replacement rental vehicles when vehicles are in the shop for repairs. Given the nature of transportation operations in this industry involve company and employee vehicles, commercial auto insurance helps protect these businesses financially from expenses related to vehicle accidents and lawsuits. On average, businesses in this industry can expect to pay around $1,200 per month for adequate commercial auto insurance coverage.
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Based on typical rates for businesses in the support activities for air transportation industry (NAICS 4881), the estimated average monthly pricing for commercial automobile insurance would be around $1,200. This price was derived based on factors such as the type of vehicles used (e.g. trucks, vans), number of vehicles, annual mileage, driver qualifications, safety record, and insurance rates in their geographic location.
Estimated Pricing: $1,200
Cyber Liability Insurance
Cyber liability insurance provides important protection for businesses that support air transportation, like freight forwarding and aircraft cleaning companies, from the financial risks of cyber attacks and data breaches. These businesses often collect and store sensitive customer data including passenger names, addresses, payment information, and travel itineraries, making cyber liability coverage especially relevant for their industry. Cyber liability insurance helps reimburse costs should a data breach or cyber attack occur for businesses in the support activities for air transportation industry. It covers expenses related to notifying customers of compromises, offering credit monitoring services, investigating incidents, and providing legal support.
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Based on typical pricing models used by cyber liability insurers and the risk profile of businesses in the support activities for air transportation industry, the estimated average annual premium for $1 million of cyber liability insurance coverage would be approximately $5,000. This pricing was derived considering factors such as the industry’s dependence on technology and handling of passenger data, as well as its role in supporting critical infrastructure. However, pricing can vary depending on individual company’s cybersecurity practices and claims history.
Estimated Pricing: $5,000
Business Interruption Insurance
Business interruption insurance provides critical protection for businesses in the support activities for air transportation industry in the event their operations are disrupted. It helps maintain profits and viability when facing unexpected events outside of their control like airport closures or reduced air traffic by covering lost income and extra expenses to maintain cash flow until full recovery. Depending on the type and size of business, estimated annual premiums for this protection range from $50,000-150,000 or around 1-3% of annual gross profits, providing an affordable way to mitigate financial risks for businesses in this sector.
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Based on typical insurance pricing models, business interruption insurance for businesses in the support activities for air transportation industry would be priced at around 1-3% of the total insurable value or gross profits. This industry faces risks from airports closing or reduced air traffic due to extreme weather or other events outside of their control. Using average industry data, estimated annual gross profits are $5 million. Therefore, the estimated annual premium would be $50,000-150,000 or 1-3% of $5 million.
Estimated Pricing: $50,000-150,000
Hangarkeepers Liability Insurance
Hangarkeepers liability insurance provides crucial protection for businesses in the support activities for air transportation industry that store, service or maintain aircraft. It covers financial risks if a customer’s plane is damaged while under their supervision. Some key benefits of this type of coverage include protecting assets from lawsuits, covering legal expenses if sued for damages, helping maintain business reputation by having adequate insurance in place, and fulfilling contracts requiring this coverage. Common uses involve protection for property damage to aircraft during servicing, coverage for liabilities from fueling/towing, payment of claims if weather damages aircraft, and protection for aircraft owners when planes are left in the business’s care. The estimated annual cost is around $5,000-$10,000 depending on risk factors like the number and type of aircraft, security measures, and loss history.
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For businesses in the Support Activities for Air Transportation industry with NAICS code 4881, the estimated average annual pricing for Hangarkeepers Liability Insurance would be around $5,000-$10,000. This pricing is derived based on factors such as the number of aircraft stored, the types of aircraft (jets would be more expensive than small planes), annual aircraft movements, security measures in place, loss history, and other underwriting considerations. The price provided is just an estimate and the actual pricing could vary for each individual business depending on their specific risk profile and underwriting review.
Estimated Pricing: $5,000-$10,000
Aircraft Liability Insurance
Aircraft liability insurance provides important protections for businesses in the support activities for air transportation industry. It covers legal costs and damages from incidents that could threaten the financial viability of the business.
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Based on research of insurance rates for air services support businesses, the average annual cost of aircraft liability insurance would be around $35,000-$45,000. Rates are determined based on factors like number of aircraft, type of aircraft, pilot experience, number of flights, and loss history. For a small to mid-sized air charter or air ambulance company operating 2-5 aircraft, the estimated annual rate would be $40,000.
Estimated Pricing: $40,000
Conclusion
By understanding their unique exposure areas and tailoring insurance coverage accordingly, businesses in the air transportation support industry can feel confident facing risks. With the right protections in place, companies can focus on servicing aircraft safely and efficiently without worrying about potential financial losses from unexpected lawsuits, injuries or property damage. Proper insurance planning helps these organizations operate sustainably over the long run.