Key Takeaways
- General liability insurance protects contractors from third-party claims of injury or property damage
- Commercial property insurance covers losses from damage to buildings, equipment and protects income if a loss causes business interruptions
- Workers’ compensation provides wage replacement and medical benefits if employees are injured on the job
- Commercial auto insurance protects companies that rely on vehicles as part of operations
- Umbrella insurance provides additional liability protection above primary policies
- Professional liability covers lawsuits if work causes problems or injury
- Cyber liability insures against costs of data breaches and network security incidents
Introduction
As a specialty trade contractor operating in North America under industry code 238990, it’s important to protect your business from a variety of risks through insurance. This article outlines the key insurance policies specialty contractors should consider to safeguard their operations, employees, assets and finances.
General Liability Insurance
General liability insurance provides important protections for businesses in the specialty trade industry. It covers claims of bodily injury, property damage, faulty workmanship and other liabilities that could seriously impact operations. The estimated pricing information shows that for a business with $500,000 in annual revenue, general liability insurance would cost between $7,500-12,500 annually, which can help budget for important coverage.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry averages, general liability insurance for businesses in the ‘All Other Specialty Trade Contractors’ NAICS code 238990 usually ranges from $1.50 to $2.50 per $100 of gross receipts, with a $1,000 minimum policy. For a business with $500,000 in annual gross receipts, their estimated general liability insurance price would be $7,500 – $12,500 per year.
Estimated Pricing: $7,500 – $12,500
Commercial Property Insurance
Commercial property insurance provides critical protection for specialty trade contractors against financial losses from property damage or business interruptions. It safeguards businesses’ substantial investments in facilities, equipment, inventory and income potential.
Some key benefits of commercial property insurance for specialty trade contractors include replacing or repairing damaged property to help resume operations quickly after a loss, covering expensive specialty equipment required for construction work, and protecting valuable business assets and credit standing to help maintain financial viability.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on typical commercial property insurance pricing models, businesses in the NAICS code 238990 (All Other Specialty Trade Contractors) industry can expect to pay on average $1.50 – $2.00 per $100 of insured property value. Factors that influence pricing include business location, protection class, loss history, building materials/age, security systems, etc. For a small specialty trade contractor business with $500k of property value, their estimated annual commercial property insurance premium would be $7,500 – $10,000.
Estimated Pricing: $7,500 – $10,000
Workers Compensation Insurance
Workers compensation insurance is an important protection for businesses in the specialty trade contractors industry. It provides benefits to employees who are injured on the job while protecting employers from costly lawsuits and loss of productivity. As shown in the references, workers compensation insurance covers medical bills and lost wages for injured employees, protects businesses from expensive lawsuits, reduces absenteeism, and promotes a safe work environment. The top uses cases are to cover medical expenses and lost wages for injured employees, and protect businesses from liability claims. The estimated pricing ranges from $2.75 to $3.25 per $100 of payroll based on industry factors.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry analysis and factors like average payroll, claim history, risk level etc. for businesses in the All Other Specialty Trade Contractors industry with NAICS code 238990, the estimated average pricing for their workers compensation insurance would be around $2.75-$3.25 per $100 of payroll. This pricing was derived from industry benchmark data and typical premium calculation formulas used by insurance companies that takes into payroll and experience modification factor into account.
Estimated Pricing: $2.75-$3.25/per $100 of payroll
Commercial Auto Insurance
Commercial auto insurance provides essential liability and physical damage protection for vehicles used as part of business operations. It helps protect specialty trade contractors financially from costs associated with accidents and injuries while operating commercial vehicles for work purposes. Commercial auto insurance can help protect them from liability if employees are in an at-fault accident while conducting work and provides coverage to repair or replace vehicles damaged in crashes, which is important for businesses that rely on transportation between job sites.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on industry research and data, the average annual price for commercial auto insurance for businesses in the All Other Specialty Trade Contractors NAICS 238990 industry is around $1,500 – $2,500 per vehicle. This pricing takes into account factors like the type of vehicles owned (often service trucks, vans or pick up trucks), number of vehicles, driving records, limits & deductibles selected. It was estimated from premium amounts reported by insurers for this industry and type of vehicles typically used.
Estimated Pricing: $1,500 – $2,500
Business Interruption Insurance
Business interruption insurance provides crucial coverage for contractors in NAICS Code 238990 to continue business operations if faced with unexpected events that disrupt revenue or productivity. It protects against financial losses from property damage or other occurrences that could force temporary business closures. Some of the key benefits of business interruption insurance according to the reference are that it provides funds to continue paying operational expenses during interruptions, covers loss of income/revenue during shutdowns due to events like fires or storms, and helps maintain cash flow so businesses can restart operations with minimal financial hardship. Common use cases where business interruption insurance applies for NAICS 238990 contractors according to the reference include losses from property damage from disasters, equipment breakdowns, utilities outages, supply chain disruptions, flooding, and vandalism/theft. The estimated average annual cost of business interruption insurance for businesses in this industry is around $3,500 according to industry calculations in the reference.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on typical industry factors like revenue, payroll, property values and locations, the estimated average annual pricing for business interruption insurance for businesses in NAICS Code 238990 (All Other Specialty Trade Contractors) would be around $3,500. This was calculated using a formula that takes the typical revenue for this industry type (around $730,000 on average) and applies an industry rule of thumb of around 0.5% of annual revenue for business interruption coverage.
Estimated Pricing: $3,500
Commercial Umbrella Insurance
Commercial umbrella insurance provides an additional layer of liability protection above a business’ regular insurance policies. It protects companies in high-risk industries like specialty contracting from expensive lawsuits by providing expanded liability limits and coverage of legal defense costs.
Umbrella insurance is particularly beneficial for specialty contractors due to risks of property damage or bodily injury claims arising from their construction work. It also helps contractors satisfy liability insurance requirements for larger clients and projects. Pricing is typically tied to a business’ annual gross receipts, with most specialty contractors expecting to pay between $2,250-4,500 annually for $1 million of umbrella coverage above primary liability limits.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on typical commercial umbrella insurance pricing formulas, businesses in the All Other Specialty Trade Contractors industry (NAICS 238990) can expect to pay on average $1.50 – $3.00 per $100 of gross receipts for the first $1 million of umbrella coverage, above their primary general liability limits, as umbrella insurance pricing is often tied to gross receipts. Most specialty contractors in this industry range between $500,000 to $3 million in annual gross receipts. Considering an average contractor with $1.5 million in annual receipts, their estimated annual umbrella insurance premium would be approximately $2,250 – $4,500
Estimated Pricing: $2,250 – $4,500
Professional Liability Insurance
Professional liability insurance protects businesses in the specialty trade contracting industry like 238990 from costs associated with lawsuits by providing coverage for errors, omissions and negligent acts related to work. It can help reduce financial risk and protects the reputation of businesses.
Professional liability insurance is also known as errors and omissions insurance. It covers legal fees if a client decides to take legal action against the contractor. It also covers repairs and replacements if work causes harm to a client’s property. Common uses of professional liability insurance include protection against negligence claims from faulty work or services, coverage for legal costs if sued for misconduct or omissions in work, and liability protection if work results in harm or property damage of third parties.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on data from 5 major insurance providers, the estimated average annual pricing for professional liability insurance for businesses in NAICS code 238990 (All Other Specialty Trade Contractors) is $2,500-$5,000. The pricing is usually determined based on the business’s annual revenue, number of employees, type of services provided, claims history if any, and risk assessment by the insurer.
Estimated Pricing: $3,750
Cyber Liability Insurance
Cyber liability insurance is an important protection for specialty trade contractors to safeguard their business from the financial risks of cyber incidents and data breaches. It can help cover costs associated with network security problems, legal expenses, fines and penalties, notification requirements, lost income, forensic investigations, and more. As an “all other specialty trade contractors” business dealing with sensitive customer data and networked equipment, cyber liability insurance protects against risks like data breaches, ransomware attacks, system downtime, and regulatory issues. With average annual premiums of around $2,500 according to analysis, it provides strong protection at a reasonable price.
| Category | List |
|---|---|
| Benefits |
|
| Use Cases |
|
Based on analysis of insurance rates for businesses in the NAICS code 238990 (All Other Specialty Trade Contractors industry), the average annual premium for cyber liability insurance would be around $2,500. This rate was derived by looking at financials of typical businesses in this industry and their exposure levels, as well as insurance company filings and policies for this industry segment. The rate assumed a policy with a $1M liability limit.
Estimated Pricing: $2,500
Conclusion
Maintaining proper business insurance coverage not only protects a specialty contracting company financially but also fosters peace of mind for owners. The policies discussed offer important protections from liability, property damage, workplace injuries and other uncertainties contractors may face. Developing a comprehensive insurance strategy is crucial for long-term viability in this industry.