Key Takeaways
- Consider general liability, property, professional liability and cyber insurance to protect against lawsuits and property damage risks
- Employment practices liability insurance (EPLI) helps defend against employment-related claims from current and former employees
- Business interruption coverage ensures income continuation if unexpected closure occurs due to property damage or other issues
- Directors’ and officers’ liability insurance protects personal assets of owners/managers if sued for errors in duties
- Umbrella insurance provides valuable additional liability protection above basic commercial policies
Introduction
As businesses that operate schools, training centers, language schools and other instructional facilities, there are several key types of commercial insurance to protect against the unique risks this industry faces. This guide examines the most important business insurance options for organizations in NAICS Code 6116 to understand coverage benefits, pricing and common use cases.
General Liability Insurance
General liability insurance provides important liability protection for businesses in industries like instructional services and schools that interact directly with customers and clients. It covers legal costs and damages if they are ever sued for negligence or accidents that cause injuries.
Some key uses of general liability insurance for schools and instructional businesses include protecting against lawsuits from student or staff injuries on premises, covering accidents or injuries during activities like field trips or sports, and providing coverage if a student or staff member sues for negligence.
The estimated average annual cost for general liability insurance for businesses in the NAICS 6116 Other Schools and Instruction industry is around $1,500 based on typical revenue and employee sizes.
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Based on typical industry pricing models, the estimated average annual cost for general liability insurance for businesses in the NAICS 6116 Other Schools and Instruction industry would be $1,500. This price was derived by taking into account average revenue and employee headcounts for businesses in this industry and then applying standard industry liability risk models and rates.
Estimated Pricing: $1,500
Property Insurance
An intro paragraph:
Property insurance is an important investment for businesses in the other schools and instruction industry to protect their valuable facilities, equipment, and continue operations after a covered loss event.
This reference provides an overview of the top benefits of property insurance for other schools and instruction businesses, including replacement cost coverage to rebuild structures and repair or replace damaged property. It also outlines common use cases like liability coverage if a student is injured on the premises and business interruption coverage if the property is unusable due to a loss. Typical annual pricing for property insurance for schools and instruction facilities ranging from $7,500 to $20,000 is also included.
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Based on typical insurance rates for schools and instruction businesses, the estimated average annual pricing for property insurance would be around $1.50 – $2.00 per square foot. This pricing is derived from factors like building construction materials, age of property, fire protection systems, security systems, claims history and location. For a typical small private school or training facility of around 5,000 – 10,000 square feet, the estimated annual property insurance cost would be $7,500 – $20,000.
Estimated Pricing: $7,500 – $20,000
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, provides valuable coverage for businesses that offer instructional or school services. It protects them against claims of negligence, errors or omissions that could harm clients or students.
An alternative intro paragraph could mention that professional liability insurance is especially important for businesses in the education industry to protect against risks of lawsuits from students, clients, or their families related to the instruction or school services provided.
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Based on research of typical pricing for professional liability insurance policies in the Other Schools and Instruction industry (NAICS code 6116), the average annual premium is around $1,500. This is derived from analyzing insurance quote data from multiple carriers for schools providing instruction like art, music, computer training, culinary, and other specialized schools. The pricing considers factors like number of employees/instructors, annual revenues, number of students enrolled, claims history, and types of instruction provided.
Estimated Pricing: $1,500
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) is an important coverage for businesses in the education industry. EPLI can help protect schools and other educational organizations financially from costly lawsuits related to employment law issues like wrongful termination, discrimination, harassment and other claims. Other key benefits of EPLI for this industry include covering legal fees to defend against frivolous lawsuits, protecting the organization’s reputation by keeping lawsuits confidential, and allowing the focus to remain on educational mission by offsetting unexpected legal costs. Common risks schools may face include wrongful termination, discrimination, sexual harassment, breach of contract, retaliation, and wage/hour claims from current or former employees. Estimated average annual premium for an organization in this industry with 10 employees and $500k payroll would be around $2,500.
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Based on typical pricing models, businesses in the NAICS 6116 ‘Other Schools and Instruction’ industry would on average pay around $2,000-3,000 annually for Employment Practices Liability Insurance (EPLI) coverage. The pricing is derived based on industry risk factors such as number of employees, annual payroll, types of services offered, and past claims/violations experience. For an average business in this category with 10 employees and $500,000 in annual payroll, an estimated annual premium would be around $2,500.
Estimated Pricing: $2,500
Cyber Insurance
Cyber insurance provides key protections and risk management support for schools and other educational institutions. It covers major costs associated with data breaches, cyber attacks, and network disruptions. Cyber threats are serious risks for these organizations as they often store and process large amounts of private student information. Basic cyber insurance for a typical small business in this industry would cost around $600 annually and help protect against issues like data breach response, network security liability, and business interruption from cyber attacks.
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Based on typical pricing models for cyber insurance, businesses in the NAICS 6116 industry (Other Schools and Instruction such as art schools, computer training, professional schools, and other schools) would on average pay around $500-800 annually for basic cyber insurance coverage. The pricing is derived from looking at common factors like annual revenue, number of records held, privacy regulation compliance, and security practices/monitoring in place. For a typical small business in this industry with $500k annual revenue and less than 5,000 customer records, the estimated annual premium would be around $600.
Estimated Pricing: $600
Umbrella Insurance
Umbrella insurance is a valuable supplemental policy for businesses in the NAICS 6116 industry involving other schools and instruction. It provides liability protection above standard commercial coverage limits for risks these types of educational operations may face. Some key benefits of umbrella insurance for these businesses include protecting owners from personal liability lawsuits, defending against claims exceeding basic policy limits, and coverage for legal fees from litigation. Umbrella insurance can help limit financial risk from costly litigation for operations like dance studios, art schools, and other instructional facilities.
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Based on typical umbrella insurance rates for businesses in the education industry, the estimated average annual pricing for an umbrella insurance policy with $1 million coverage would be around $500-$800. Umbrella insurance pricing is usually based on factors like the business’ revenue, number of employees, claims/loss history. For businesses in the other schools and instruction category with smaller sizes, an estimate of $600 per year would be a reasonable price.
Estimated Pricing: $600
Business Interruption Insurance
Business interruption insurance provides critical financial protection for schools and educational institutions by ensuring continued income and covering ongoing expenses should the business need to temporarily close or relocate operations due to unforeseen events.
Business interruption insurance covers key costs like payroll for employees and teachers, as well as regular business expenses, allowing the school to stay financially sustainable during a closure. It protects the steady cash flow needed to keep the doors open.
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Based on typical business interruption insurance policies for schools and other educational institutions, the estimated average annual premium would be around 1% of the total insured value. For a small private school with an annual revenue of $500,000, the total insured value would also be $500,000. Therefore, the estimated annual premium would be $5,000.
Estimated Pricing: $5,000
Director’S And Officer’S Liability Insurance
Director’s and officer’s liability insurance (D&O insurance) provides important protections for directors and officers of other schools and instruction businesses from costly lawsuits and regulatory actions that could result from negligence or errors in duties. It covers legal fees and settlement costs if claims are brought against directors or officers. D&O insurance also attracts qualified individuals to take on director and officer roles by providing needed protections for their personal assets. Key risks for this industry include employment-related claims as well as regulatory actions related to licensing and operations. D&O insurance is especially critical for businesses in this industry due to the sensitive nature of interactions with students and personal information involved.
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Based on typical pricing formulas used by insurance companies and analyzing historical policy data for similar sized businesses in the Other Schools and Instruction industry (NAICS Code 6116), the estimated average annual premium for $1 million of D&O liability insurance coverage would be approximately $3,500. Premiums are often derived from multiples of revenue or payroll. For this industry, premium amounts tend to average around 1% of annual revenues.
Estimated Pricing: $3,500
Conclusion
In summary, general liability, property, professional liability, cyber, EPLI and umbrella/excess insurance provide layers of protection for the operational and legal risks educational institutions commonly face. Having the right insurance allows these organizations to focus on their educational mission confidently without exposure to financial hardship from unexpected lawsuits or losses.