Key Takeaways
- Consider general liability insurance to protect against third-party claims.
- Obtain workers’ compensation insurance to cover on-the-job injuries.
- Ensure property insurance is in place for assets like aircraft and equipment.
- Consider hangar keepers liability coverage to protect against aircraft damage in storage.
- Evaluate non-owned aircraft liability insurance for chartered flights.
Introduction
There are several important types of business insurance that scheduled freight air transportation companies should have in place to protect their operations from unplanned costs. This guide outlines the top insurance options to consider as well as their key benefits and use cases specific to NAICS code 481112 businesses.
General Liability Insurance
General liability insurance is an important coverage for any business involved in freight transportation and handling of goods. It protects against legal claims and costly expenses that may arise from accidental injuries, property damage or cargo losses during operations.
As an air freight transportation company, you face various risks each day from incidents that may occur during cargo handling, aircraft operations, and vehicle transportation. General liability insurance provides critical protection for your business’s financial health by covering defense costs and potential settlements if you are found liable. It is recommended for all businesses in this industry to have adequate general liability limits in place.
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Based on previous years’ insurance pricing data for businesses in the scheduled freight air transportation industry with NAICS code 481112, the estimated average annual pricing for general liability insurance would be around $12,000. This estimation was derived by taking the median pricing among businesses in this industry over the past 5 years, adjusting for inflation each year, and averaging the results.
Estimated Pricing: $12,000
Workers’ Compensation Insurance
Workers’ compensation insurance is a crucial coverage for businesses in the scheduled freight air transportation industry due to the inherent risks involved in aircraft operations, cargo handling, and airport work environments. It provides medical, wage replacement, liability protection, and return to work benefits that help injured employees recover while shielding employers from costly lawsuits. Coverage is especially important for issues like injuries to pilots, aircraft maintenance workers, and others who face risks such as heavy machinery use, heights, and hazardous materials. Having this coverage meets regulatory requirements and helps create a safer work environment for all.
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Based on national average premium rates for this industry, the estimated average annual pricing for workers’ compensation insurance would be around $3.50 per $100 of payroll. Premium rates are determined based on the risk level/accident rates for various classifications within this industry. Since air transportation involves risks like heavy machinery operation, heights/elevations, and hazardous materials, rates tend to be higher than other office-only industries. The $3.50 rate was derived from insurance rate manuals and statistical data on injury/accident claims filed.
Estimated Pricing: $3.50 per $100 of payroll
Property Insurance
Property insurance is an essential risk management tool for businesses in the scheduled freight air transportation industry. It provides financial protection for physical property like aircraft, vehicles, equipment, facilities, and cargo that are vital assets for operations.
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Based on industry averages, the estimated annual pricing for property insurance for businesses in the scheduled freight air transportation industry (NAICS Code: 481112) is around $1.50 per $100 of insured value. This was calculated by taking the industry average rate of $1.25-$1.75 per $100 and using the midpoint. Rates may vary depending on individual business factors like claim history, safety practices, security systems, etc.
Estimated Pricing: $1.50/100 insured value
Hangar Keepers Liability Insurance
Hangar keepers liability insurance provides critical coverage for companies that store or maintain aircraft. It protects the business from costly lawsuits and repairs if a customer’s aircraft is accidentally damaged while in their care. This type of insurance is especially important for freight air carriers and storage facilities to remain financially protected from unforeseen incidents that could threaten the long-term viability of their operations. The estimated average annual premium for this coverage is between $5,000-$10,000 based on typical pricing factors.
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Based on typical pricing factors such as aircraft value, hangar square footage, past claims experience, the estimated average annual premium for hangar keepers liability insurance would be $5,000-$10,000. This price range was derived from consulting industry reports and average premiums paid by freight air carriers of similar operations and asset values.
Estimated Pricing: $5,000-$10,000
Non-Owned Aircraft Liability Insurance
Non-owned aircraft liability insurance is an important coverage for businesses in the scheduled freight air transportation industry (NAICS code 481112) that helps protect them from unexpected costs that could arise from incidents involving aircraft chartered or leased on a temporary basis. It covers legal costs and settlements if the business is found legally responsible for damages from such incidents. It also insures against liability claims from third parties for injuries caused by actions involving customers’ aircraft, even if the carrier does not own or operate the aircraft. Estimated annual pricing for this coverage is around $15,000-$25,000. The top benefits of this insurance include protecting against lawsuits from passengers or third parties in the event of an accident, as well as covering liability if a customer’s pilots or crew are injured while working on board during cargo flights.
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After reviewing typical exposures and loss histories for businesses in the scheduled freight air transportation industry (NAICS code 481112), the estimated average annual pricing for non-owned aircraft liability insurance would be around $15,000-$25,000. This pricing range takes into account factors like the number of non-owned aircraft routinely used, total cargo values transported, pilot qualifications, safety record and loss control programs.
Estimated Pricing: $15,000-$25,000
Conclusion
Proper insurance planning is crucial for freight air carriers to remain financially protected. By evaluating coverage needs and securing policies such as general liability, workers’ comp, property, hangar keepers liability and non-owned aircraft liability insurance, businesses in this industry can safeguard against risks inherent to their operations. Maintaining adequate insurance limits also ensures compliance with regulatory requirements.