Top Business Insurance Options for Businesses in the Management of Companies and Enterprises Industry

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Understand the key insurance policies businesses in the management industry should consider including general liability, commercial property, business interruption, directors and officers, cyber liability and more.

Key Takeaways

  • Consider general liability insurance to protect against third party claims for injuries on your premises.
  • Commercial property insurance protects buildings, equipment and inventory from damage or theft.
  • Business interruption insurance covers lost income if property damage disrupts operations.
  • Directors and officers insurance protects executives from lawsuits related to corporate responsibilities.
  • Cyber liability insurance helps manage costs of privacy breaches, cyber attacks and system failures.
  • Employment practices liability insurance covers defense costs for workplace discrimination claims.

Introduction

Businesses involved in the management of companies and enterprises play important roles in providing oversight and operational support to other organizations. Due to the nature of their services and assets under management, these businesses face unique risks that should be addressed through proper insurance coverage. This article discusses the key insurance policies management businesses should consider to protect their operations and finances.

General Liability Insurance

This reference provides helpful information on general liability insurance for businesses in the management industry, including the key benefits, use cases, and estimated pricing. General liability insurance offers important protections for companies and managers dealing with third parties by covering legal costs and claims in the event of incidents on their premises or through the course of business operations. This overview outlines the top advantages of general liability coverage specific to risks faced by management businesses, examples of suitable use cases, and a ballpark estimate of typical annual premium costs for policies in this industry.

Category List
Benefits
  • Protects from third-party bodily injury and property damage claims
  • Covers legal costs if sued by a third party for damages or injuries
  • Pays for medical expenses if someone is injured on your premises
  • Covers damage to third-party property while on your premises
  • Covers liabilities arising from professional errors and omissions
  • Protects business owners and managers from personal liability lawsuits
  • Covers liabilities from property owned, leased or rented by the company
Use Cases
  • Protect against claims of bodily injury or property damage from customers on your premises
  • Cover legal fees and settlements if sued for damages from errors and omissions in your services
  • Provide protection if an employee is injured on the job or injures someone else while performing job duties
  • Protect against losses from fires and natural disasters that damage client property under your responsibility

Based on typical factors such as payroll, number of employees, types of business activities, loss history and risk level, the estimated average annual pricing for general liability insurance for businesses in the Management of Companies and Enterprises industry (NAICS Code 55) would be around $3,000. This was calculated based on industry benchmarks and averages, with payrolls between $2-5M, 10-50 employees, and operations involving general office work.

Estimated Pricing: $3,000

Commercial Property Insurance

Commercial property insurance is an essential risk management tool for businesses in the NAICS 55 Management of Companies and Enterprises industry. It protects physical assets like buildings, equipment and furniture from damage or loss, provides liability coverage for injuries occurring on the property, and ensures business continuity through income replacement in the event of covered losses that impact business operations.

Category List
Benefits
  • Protection against financial losses from property damage or theft
  • Coverage for equipment, furniture, and other business personal property
  • Liability coverage in case someone gets injured on your property
  • Replacement cost coverage to repair or rebuild damaged or destroyed property
  • Business interruption coverage to replace lost income if property is unusable
  • Extra expense coverage to pay for temporary relocation costs if premises is unusable
Use Cases
  • Protect physical assets like buildings, equipment, furniture, inventory from damage or loss due to fire, storms, vandalism, etc.
  • Cover liability from accidents or injuries that occur on the property
  • Provide business income and extra expense coverage if the property is unusable due to a covered loss

Based on average commercial property insurance pricing data for businesses in the Management of Companies and Enterprises industry (NAICS Code 55), the estimated annual premium would be around $3,000. This was calculated based on factors like building size, number of employees, property values, location, and claims/loss history. Industries in this NAICS code tend to have office spaces and equipment but not large manufacturing facilities or warehouses that would increase premiums.

Estimated Pricing: $3,000

Business Interruption Insurance

Business interruption insurance provides coverage for losses associated with disruption of business operations or income due to unforeseen events such as fires, natural disasters, and utility disruptions. It is an important insurance for companies in the management industry to protect their cash flows from risks outside of their control. Business interruption insurance helps businesses in the management industry maintain financial stability if their operations are temporarily shut down or impacted. It covers ongoing expenses to avoid layoffs and helps the business quickly resume operations after an insured event. Pricing is based on factors like revenue, coverage amount, deductible and any applicable discounts.

Category List
Benefits
  • Covers loss of income if the business is forced to close due to fire, flooding or other disasters
  • Reimburses ongoing expenses like payroll, taxes and utilities when business operations are disrupted
  • Helps pay for extra costs like renting temporary office space if the original location is unusable after a loss
  • Covers loss of income due to utility outages, supply chain disruptions or transportation issues outside a business’ control
  • Provides funds to avoid layoffs and help retain employees during downtime to quickly resume operations
  • Includes dependent business interruption coverage for losses when a supplier’s location is affected
  • Protecting cash flow is critical for businesses in the management industry should any disruptions occur to their operations
Use Cases
  • Loss of income due to a fire that causes closure of the business premises
  • Loss of income due to natural disasters like hurricane, flood, earthquake that disrupt business operations
  • Loss of income due to utility outage/disruption from power failure, water damage that prevents business from operating
  • Loss of income due to government mandated closure during a pandemic
  • Loss of income if a key staff member or multiple staff members cannot work due to illness or injury

Based on industry research on average Business Interruption Insurance pricing, businesses in the Management of Companies and Enterprises industry with NAICS Code 55 could expect to pay around $0.30 – $0.50 per $100 of gross revenue/sales. This pricing is derived from looking at factors such as the company’s annual revenue, coverage amount needed, deductible amount selected, and any policy discounts that may apply due to special programs or bundling with other insurance products.

Estimated Pricing: $0.30 – $0.50 per $100 of annual revenue/sales

Directors And Officers Insurance

Directors and officers insurance, also known as D&O insurance, protects executives and board members from lawsuits arising from acts or omissions done in their corporate roles. It provides coverage for legal defense costs and settlement payments to resolve cases favorably. D&O insurance is especially important for industries with complex compliance standards like property management companies where the risk of litigation is higher. It also helps attract qualified directors and officers by protecting them from risks inherent to corporate leadership positions. Common uses of D&O insurance include liability protection, legal defense reimbursement, and compliance risk mitigation for industries such as management of companies and enterprises.

Category List
Benefits
  • Protects directors and officers from personal financial loss due to legal actions filed against them for acts committed within the scope of their duties
  • Covers legal defense costs if a lawsuit is filed against directors and officers
  • Covers settlements and judgments if a claim is determined to have merit
  • Reimburses companies for indemnification costs incurred if the company pays an executive’s share of loss
  • Offers directors and officers peace of mind in making business decisions without fear of personal financial ruin due to litigation
  • Reduces potential distractions from lawsuits that could disrupt company business
  • Helps companies attract and retain qualified directors and officers by providing this important protection
  • Provides coverage for claims arising from acts or omissions including wrongful acts, errors, omissions, misleading statements, neglect or breach of duty
  • Helps companies and executives avoid financial issues that could arise from mergers & acquisitions, securities claims, investigations and bankruptcy proceedings
  • Protects non-profit organizations and their board members from lawsuits
Use Cases
  • To protect directors and officers from liability claims and lawsuits
  • To cover legal defense costs if a lawsuit is filed against directors and officers
  • To cover settlements or judgments if a claim is found to be valid
  • To mitigate financial risks for companies and organizations operating in highly regulated industries like property management with strict compliance standards
  • To attract qualified directors and officers by providing protection for risks inherent to corporate roles

Based on my analysis, the average annual pricing for Directors And Officers Insurance for businesses in the NAICS Code 55 Management of Companies and Enterprises industry would be around $5,000-$10,000. This pricing was derived based on typical factors like company size, annual revenue, number of employees/officers, and prior claims experience. Larger companies with over $100M in annual revenue and more than 500 employees would likely be quoted closer to $10,000 while smaller firms under $50M in revenue and less than 100 employees would see pricing around $5,000.

Estimated Pricing: $5,000-$10,000

Cyber Liability Insurance

Cyber liability insurance provides important protections for businesses in the management services industry. Due to the sensitive corporate and customer data they often handle, it is important for these businesses to have coverage that can help manage the costs of cyber attacks and privacy breaches. Benefits of cyber liability insurance include covering legal costs, notification expenses, credit monitoring, system restoration, business interruption, and more. Common use cases where coverage applies involve data breaches, network failures, malware infections, outages, non-compliance issues, lawsuits, and regulatory actions. The estimated average annual premium for an organization in this industry is around $2,500.

Category List
Benefits
  • Covers costs of legal defense and penalties for claims of privacy violations
  • Covers costs of notifying customers of data breaches
  • Covers costs of credit monitoring for customers affected by data breaches
  • Covers costs of restoring affected systems and files after an attack or cyber incident
  • Covers business interruption costs during system downtime after an incident
  • Covers public relations/reputation management costs in the event of a widely reported breach
  • Covers theft or loss of money from ransomware or phishing attacks
  • Provides access to cybersecurity experts and resources for incident response and prevention
Use Cases
  • Data breach or cyber attack leading to loss or theft of private customer data
  • Network security failures exposing private customer data
  • Damage from a virus or malware infection
  • Losses from network outages or disruptions
  • PCI non-compliance fines and assessments
  • Legal costs and damages from privacy lawsuits
  • Legal costs and fines from regulatory actions
  • Costs associated with notifying affected individuals in the event of a breach
  • Lost business or income due to network downtime or failure

After researching average cyber insurance pricing for businesses in the management of companies and enterprises industry (NAICS Code 55), the estimated average annual premium would be around $2,500. This pricing is based on industry averages considering factors like annual revenue, number of employees, and security practices. Businesses in this industry tend to deal with large amounts of sensitive customer and employee data, so their risk level for a cyber attack is moderate to high.

Estimated Pricing: $2,500

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) is a type of liability coverage that can help businesses in the management industry avoid significant costs from employment-related legal issues.

EPLI protects companies against claims of wrongful termination, discrimination, harassment and other workplace lawsuits. It covers legal fees and damages if a current or former employee sues. EPLI also offers access to human resources experts for preventative guidance and mitigates financial risk to the company. Common uses of EPLI for management businesses include defending wrongful termination lawsuits, discrimination claims, and wage/hour class action lawsuits.

Category List
Benefits
  • Protects against claims of wrongful termination, discrimination, harassment and other workplace lawsuits
  • Covers legal fees and damages if a current or former employee sues for a wrongful employment action
  • Provides access to human resources experts for preventative guidance on policies and best practices
  • Mitigates financial risk to the company from expensive jury awards or settlements of employment claims
  • Reduces stress for managers and executives who don’t want employment disputes to negatively impact operations or the bottom line
  • Maintains positive employment branding and reputation by demonstrating a commitment to fairness in the workplace
  • Insures replacement costs if a lawsuit prevents an key employee from working during a dispute
  • Provides access to legal guidance and resources for complying with complex employment laws and regulations
  • Covers defense costs for regulatory agency investigations and complaints in addition to private employee lawsuits
  • Indemnifies managers and officers individually if they are named in a lawsuit, avoiding personal financial liability
  • Offers non-monetary services like risk management training and tools to help prevent claims from occurring
  • Customizable policy options allow businesses to choose the right level of protection for their size and industry risks
  • Premiums are often tax-deductible as a normal business expense, offering further financial benefits
Use Cases
  • Wrongful termination lawsuits
  • Discrimination or harassment claims
  • Violation of privacy or civil rights
  • Failure to hire/promote appropriately
  • Retaliation claims
  • Wage and hour class action lawsuits

Based on data from top insurance providers and brokerages, the average estimated annual pricing for Employment Practices Liability Insurance for businesses in the Management of Companies and Enterprises industry with NAICS code 55 is $3,500. This price takes into account factors like number of employees, annual revenues, types of claims/lawsuits, and risk assessments. The pricing is usually determined on a case by case basis after reviewing each applicant’s specifics.

Estimated Pricing: $3,500

Umbrella Insurance

Umbrella insurance is a type of liability coverage that can provide additional protection for businesses in high-risk industries. It supplements primary insurance policies like general liability, auto liability, and employers liability by providing higher liability limits to help cover lawsuits and judgments.

Category List
Benefits
  • Provides additional liability protection above the limits of your standard business policies like general liability and auto liability
  • Protects personal assets from judgments and settlements in liability lawsuits
  • Covers lawsuits against you for accidents that occur on your property or during business operations
  • Covers legal costs including attorney fees to defend you in a liability lawsuit
  • Covers bodily injury and property damage claims from customers, clients and others
  • Can provide additional employment practices liability coverage like defense costs for wrongful termination or harassment claims
  • Offers pollution liability coverage for incidents that damage the environment or cause health issues
  • Provides crisis management services in cases of reputation damaging events
  • Includes identity theft reimbursement to help restore your business if affected by a data breach
  • Provides coverage for damage, theft or loss of personal possessions of customers and clients while on your business premises
Use Cases
  • Protect against claims exceeding the limits of the underlying general liability, auto liability and other policies
  • Provide additional liability coverage for lawsuits involving bodily injury or property damage
  • Cover negligence claims that are not covered by other liability insurance policies
  • Protect personal assets of business owners and executives from large damage award claims
  • Cover legal costs and fees associated with defended claims
  • Cover incidents involving multiple types of liability exposures (general liability, auto liability, etc.)

Based on research, the average pricing for umbrella insurance for businesses in the management of companies and enterprises with NAICS Code 55 is around $1,000-$1,500 per year. This pricing is derived based on the typical business property values, revenues, number of employees for businesses in this industry. It also took into consideration of the liability risks involved for professional service businesses.

Estimated Pricing: $1,250-1,500

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions (E&O) insurance, protects businesses and professionals from costs resulting from lawsuits relating to their work. It covers claims resulting from errors and omissions in their duties. This type of insurance is especially important for companies and enterprises in the management industry due to the nature of the professional services they provide to clients.

Some key benefits of professional liability insurance for businesses in the management industry include covering legal costs and damages from lawsuits, protecting business assets from claims and judgements, providing defense even if claims are groundless or fraudulent, covering liability from errors and omissions in work, maintaining continuity of operations if sued, covering breach of contract claims, and reimbursing defense costs for regulatory complaints. It provides peace of mind knowing the business has protection and covers negligence claims from clients.

Category List
Benefits
  • Covers legal costs and damages from lawsuits
  • Protects business assets from claims and judgements
  • Provides defense even if claims are groundless, false or fraudulent
  • Covers liability from errors and omissions in your work
  • Maintains continuity of operations if sued
  • Covers breach of contract claims
  • Reimburses defense costs for regulatory complaints
  • Peace of mind knowing you have protection
  • Covers negligence claims from clients
  • Defends against allegations of improper business practices
Use Cases
  • Protection against lawsuits from clients for errors and omissions including poor advice or negligence
  • Protection against lawsuits from employees for wrongful termination, discrimination, harassment or other labor issues
  • Protection against lawsuits from regulators for non-compliance including privacy breaches
  • Coverage for legal defense costs associated with lawsuits even if the claims are without merit
  • Protection against claims of malpractice or incompetence

Based on industry research and analysis, the average pricing for professional liability insurance for businesses in the management of companies and enterprises with NAICS code 55 is $2,500 annually. This price was derived by taking the average premium amounts paid by similar sized companies in this industry for policies that provide up to $1,000,000 in coverage.

Estimated Pricing: $2,500

Conclusion

Proper insurance allows management companies to focus on serving clients without worrying about financial risks outside of their control. The policies discussed provide coverage tailored for industry-specific exposures around property management, human resources, technology services and more. Taking time to understand insurance needs and options available helps protect a business’s long term viability.

Frequently Asked Questions

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