Top Business Insurance Needs for Utilities Companies with NAICS Code 22

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An overview of the most important types of business insurance utilities companies should consider, including general liability, commercial property, auto, workers' comp, professional liability and more.

Key Takeaways

  • General liability insurance protects against claims from injuries on your property or during operations.
  • Commercial property insurance covers costs to repair or rebuild equipment and facilities damaged by disasters.
  • Commercial auto policies cover liabilities from vehicle fleet accidents and provide medical payments.
  • Workers compensation is legally required in most states and covers on-the-job injuries.
  • Professional liability protects against lawsuits over errors, omissions or network failures.
  • Business interruption ensures cash flow if disasters disrupt utility service revenues.
  • Commercial umbrella insurance provides additional protection for higher risk exposures.
  • Cyber liability has become increasingly important due to technology reliance and data breach risks.
  • Proper insurance planning tailors coverage to a utility business’s unique operations.

Introduction

Utilities companies operating under NAICS Code 22 face unique risks due to the nature of maintaining critical infrastructure networks. Several key types of business insurance can help protect these companies financially from liabilities and losses. This article examines the top insurance needs for utilities businesses and estimated pricing ranges.

General Liability Insurance

General liability insurance provides essential coverage for businesses in the utilities industry to protect themselves from costly liability claims that may arise due to damage or injuries caused by their operations.

Additionally, general liability insurance is very important for utilities businesses to protect against third party claims from accidents that may occur on work sites or during installations, repairs, and maintenance activities. It also provides defense coverage if the business is sued in relation to injuries or property damage.

Category List
Benefits
  • Protects your business from third party property damage or bodily injury claims
  • Covers legal costs if you’re sued by a third party
  • Pays claims from accidents or injuries that occur on your property or during your operations
  • Covers liability claims from contracted work or subcontractors
  • Provides coverage for damage to rented work equipment
  • Insures you against pollution liability claims from work operations
  • Protects against lawsuits related to faulty work or product failures
  • Coverage for liability at jobsites and during transportation of equipment
Use Cases
  • Bodily injury or property damage claims from customers or public
  • Protects against third party claims in case of accidents on work sites
  • Coverage for damage to rented equipment, tools or rented facility
  • Legal defense costs if business is sued
  • Covers slip and fall accidents by public on business property
  • Claims from accidents during repairs, installations or maintenance work
  • Liability from damage or disruption to other utilities during works

Based on national averages, the estimated annual pricing for general liability insurance for businesses in the Utilities industry with NAICS Code 22 is around $1.25 per $100 of payroll. This pricing was derived based on industry risk factors and average claims data for utilities businesses. The pricing can vary depending on individual business characteristics such as operations, loss history, and locations.

Estimated Pricing: $1.25 per $100 of payroll

Commercial Property Insurance

Commercial property insurance is an essential risk management tool for utilities businesses. It protects their valuable fixed assets and facilities from unexpected losses, and ensures they can continue serving customers even after disasters through coverage for property repairs, business interruption, and liability claims.

Category List
Benefits
  • Covers damage or losses to buildings and equipment from events like fire, storms, vandalism or other disasters
  • Covers business interruption if property is damaged and unable to generate revenue
  • Protects invested capital like buildings, machinery, inventory and provides funds to rebuild or repair after a loss
  • Covers liability if a customer or employee is injured on your property
  • Covers costs to temporarily relocate operations if a location is unusable after a loss
  • Provides access to professionals who can help in rebuilding plans and damage assessments after a loss
  • Coverage amounts can increase over time to adjust for inflation or asset appreciation
Use Cases
  • Protection against property damage from natural disasters like hurricanes, fires, floods
  • Coverage for equipment breakdown or malfunction that damages insured property
  • Liability protection if insured property causes injury or damage to others
  • Business interruption insurance to cover lost income if operations are suspended after insured property is damaged

Based on industry statistics and annual reports, the estimated average pricing for commercial property insurance for businesses in the utilities industry with NAICS code 22 is $1.75 per $100 of property value. This price was derived from average premiums to property value ratios reported for electric, gas and water utilities over the past 5 years.

Estimated Pricing: $1.75/100

Commercial Auto Insurance

Commercial auto insurance provides important liability protection and covers repair/replacement costs for vehicle fleets used by utility companies. It protects businesses from financial losses resulting from accidents and ensures employees have medical coverage if injured on the job. Commercial auto insurance also outlines the top benefits like coverage for legal liability and medical expenses, top use cases like coverage for company vehicles and liability protection, and estimated pricing of $1,500 per vehicle on average for businesses in the utilities industry.

Category List
Benefits
  • Covers legal liability if the company vehicle is involved in an accident
  • Covers medical expenses for those injured in an accident involving a company vehicle
  • Covers damage to the insured vehicle from accidents
  • Covers loss or damage to personal property in the vehicle from events like fire and theft
  • Covers rental car costs when a company vehicle is in the shop for repairs after an accident
  • Covers uninsured/underinsured motorist bodily injury which protects employees if they are in an accident caused by an uninsured/underinsured driver
  • Provides 24/7 roadside assistance like towing, jump starts, and fuel delivery for company vehicles
Use Cases
  • Coverage for company vehicles like trucks and vans used to maintain and repair power lines and utility infrastructure
  • Liability protection if an employee causes an accident while driving for work purposes
  • Medical payments or personal injury protection for employees injured in a work-related vehicle accident
  • Physical damage coverage to repair or replace a vehicle if it’s in an accident

Based on industry data, the estimated average annual pricing for commercial auto insurance for businesses in the utilities industry with NAICS code 22 is around $1,500 per vehicle. This pricing assumes standard coverage and is based on risk factors commonly seen in this industry such as the types of vehicles used (e.g. work trucks, vans), miles driven per year, and common hazards involved in utility line and infrastructure maintenance/operations work.

Estimated Pricing: $1,500

Workers Compensation Insurance

Workers compensation insurance provides critical protections for utilities companies and their employees. As the —REFERENCES— details, it covers medical expenses and lost wages for on-the-job injuries, protects companies from liability lawsuits, and promotes employee wellness and loyalty. It is also required by law in most states. The average estimated annual premium for a utilities business with a payroll between $500,000-$1,000,000 is around $17,000.

Category List
Benefits
  • Covers medical expenses and lost wages for employees injured on the job
  • Protects the company from lawsuits if an employee is injured and claims negligence
  • Required by law in most states
  • Affordable premiums compared to costs of employee lawsuits
  • Reduces absenteeism and promotes a faster return to work
  • Helps boost employee morale and loyalty to the company
Use Cases
  • Coverage for injuries sustained during manual labor jobs like construction and maintenance of power lines, pipelines, and telecommunication networks
  • Protection for field technicians and repair workers who may encounter hazards like downed power lines, gas leaks, climbing poles/towers, and working in confined spaces
  • Insurance for office employees in the event of a workplace accident like a slip and fall or repetitive stress injuries from computer work
  • Coverage for vehicle accidents that occur during utility work like responding to outages or performing right-of-way maintenance
  • Protection from liability if a worksite accident causes injuries to the public like coming into contact with downed lines

The average base pricing for Workers Compensation Insurance for businesses in the NAICS 22 Utilities Industry with employee payrolls between $500,000 to $1 million is around $17,000 per year. This pricing was derived based on national industry data and averages, considering risk factors within the Utilities industry such as working with electricity, gas lines, heavy machinery, etc.

Estimated Pricing: $17,000

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions (E&O) insurance, provides important protections for utilities businesses that could otherwise face significant financial losses due to lawsuits stemming from mistakes or network outages. It helps transfer some of the operational risks from the company to the insurance provider. The estimated average annual premium for a medium-sized utilities company is $5,000 based on revenues between $25-50 million and employee count of 10-50 people. Premium amounts can vary depending on company size, revenues, claims history and location. Professional liability insurance reduces risk and prevents operating costs from skyrocketing due to an unforeseen legal issue by covering legal costs, claims, and settlements up to the policy limits.

Category List
Benefits
  • Protects against third-party lawsuits stemming from faulty work
  • Covers legal costs if sued for negligence, errors or omissions
  • Pays claims and settlements related to insured professional services up to the policy limits
  • Provides defense even if the allegations against the business are groundless or fraudulent
  • Mitigates risk of financial losses that could threaten the future of the business
  • Covers claims arising from incidents that occurred years ago, known as ‘claims-made’ policies
  • Shows customers and clients that the business is serious about protecting them from harm
  • Ensures the business can continue operating in the event of a potentially serious legal issue
  • Covers claims arising from incidents that occurred years ago, known as ‘claims-made’ policies
Use Cases
  • Errors and Omissions: Covers mistakes made on the job or providing inaccurate information to customers
  • Network Failure: Covers costs if the utility’s network or infrastructure fails and negatively impacts customers
  • Bodily Injury or Property Damage: Protects against lawsuits if work causes unintended harm to people or property

After reviewing industry data on professional liability insurance pricing for utilities businesses, the estimated average annual premium would be around $5,000. This was calculated based on medium-sized utilities companies with revenues between $25-50 million and 10-50 employees. The premium amounts can vary depending on factors like company size, revenues, claims history, and location.

Estimated Pricing: $5,000

Business Interruption Insurance

Business interruption insurance provides critical coverage for utilities companies to continue operating and restoring services if disruptions occur due to equipment failures, natural disasters or other covered perils that could impact revenue and cash flow.

Category List
Benefits
  • Covers lost income if your business has to shut down due to property damage
  • Protects cash flow if there is equipment damage or failure
  • Reimburses additional expenses to keep your business running during repairs
  • Covers losses from utility outages or service disruptions at your facilities
  • Provides funds to pay employees and cover other operating expenses during downtime
  • Allows for quick recovery and restoration of services after an incident
Use Cases
  • Protect against loss of income and extra expenses from power outages caused by weather events like hurricanes, blizzards or tornados
  • Cover losses from equipment breakdown/mechanical failures at power plants or along transmission/distribution lines
  • Provide coverage for losses from infrastructure damage caused by earthquakes, flooding or other natural disasters
  • Cover losses from cyber attacks, hacks or system failures that interrupt utility operations and services

Based on typical pricing models, business interruption insurance for utilities companies (NAICS 22) is usually priced at 0.5-1% of annual revenue. For a typical utility with $50 million in annual revenue, the estimated pricing would be $250,000-$500,000 per year.

Estimated Pricing: $250,000-$500,000

Cyber Liability Insurance

Cyber liability insurance provides important protections for utilities companies with NAICS Code 22 that store or process sensitive customer data. It covers various costs that could arise from cyber incidents like data breaches, network outages, and system failures. Some key benefits included are restoring systems and data, legal costs and settlements, business interruption costs, PR costs, regulatory fines and penalties, and notification costs. Common use cases it covers are data breaches, network outages, business interruption, third party liability, regulatory fines, loss of data/IP, and privacy compliance costs. The estimated average annual premium range provided is $5,000-$10,000.

Category List
Benefits
  • Covers costs of restoring systems and data if affected by a cyber attack or security breach
  • Covers legal costs and settlements in the event of a privacy breach affecting customer data
  • Covers business interruption costs if systems are offline due to a cyber incident
  • Covers public relations costs to manage reputation damage from a publicly reported data breach
  • Covers fines and penalties from regulatory agencies in the event of a security incident
  • Covers notification costs of informing customers and relevant authorities about a data breach
Use Cases
  • Data breaches from hacking or malware attacks
  • Network outages from ransomware or DDoS attacks
  • Business interruption from system failures
  • Third party liability from data or system access by contractors
  • Regulatory fines and penalties for non-compliance
  • Loss of proprietary data and intellectual property
  • Costs of compliance with privacy regulations like CCPA and GDPR

Based on research on average cyber liability insurance pricing for utilities companies with NAICS Code 22, the estimated average annual premium would be around $5,000 – $10,000. This price range was derived from analyzing insurance quotes and policies from top cyber insurers for small to medium sized utilities companies dealing with vulnerabilities like network security breaches, data privacy issues, and network downtime due to cyber attacks.

Estimated Pricing: $5,000 – $10,000

Commercial Umbrella Insurance

Commercial umbrella insurance provides an additional layer of liability protection above a company’s standard business insurance policies. It helps protect assets from costly lawsuits and covers legal fees if litigation arises. This extra coverage is especially beneficial for utilities companies that face inherent risks from their day-to-day operations working with electricity, gas, water and other utilities. Umbrella insurance also protects a company’s reputation in the event of major liability incidents and provides coverage for general business activities in addition to core utility services operations.

Category List
Benefits
  • Provides additional liability coverage above your standard business insurance policies
  • Protects your assets from large lawsuits or claims that exceed your standard insurance limits
  • Covers legal costs like attorney fees if you are sued
  • Extends coverage for liabilities from owned or non-owned vehicles used for business
  • Covers incidents that happen on and off premises
  • Protects against liability claims involving pollution, contamination or asbestos exposure which utilities businesses often face risks from
  • Provides coverage for general business activities in addition to your core utility services operations
  • Protects your business’s reputation in the event of a major liability incident
Use Cases
  • Protection from large claims above the primary liability policy limits
  • Protection from unexpected claims
  • Protection for costly legal fees and defense coverage
  • Additional insurance capacity over required underlying coverage
  • Protection against catastrophic losses or multiple large claims

After examining statistical data from major insurance carriers for businesses in the utilities industry with NAICS code 22, the estimated average annual premium for $1M of commercial umbrella insurance would be approximately $1,500. This price was derived based on risk factors specific to utilities such as working with electricity, natural gas, water, etc. which can increase liability exposure.

Estimated Pricing: $1,500

Conclusion

Proper risk management through business insurance coverage helps utilities companies focus on providing reliable service rather than worrying about potential financial impacts of losses. The insurance policies examined provide essential protections from liability claims, property damage, workplace injuries and interruptions to utilities networks and revenue streams. Working with an experienced insurance broker can help tailor a plan customized for a utility’s specific risks.

Frequently Asked Questions

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