Top Insurance Options to Protect Your Water Supply and Irrigation Systems Business (NAICS 221310)

UncategorizedReading Time: 12 minutes

An overview of the key business insurance policies water supply and irrigation systems companies should consider to mitigate risks and remain compliant, including general liability, commercial property, commercial auto, workers' compensation, cyber liability, umbrella liability and more.

Key Takeaways

  • General liability insurance protects against third-party claims for bodily injury and property damage.
  • Commercial property insurance covers buildings, equipment, vehicles and covers loss of income from interruptions.
  • Commercial auto coverage provides liability protection and physical damage coverage for fleet vehicles.
  • Workers’ compensation ensures proper medical care and benefits for injured employees.
  • Cyber liability protects against costs of data breaches and network disruptions.
  • Umbrella liability provides additional liability coverage above primary limits.
  • Directors and officers coverage protects company leaders from lawsuits.
  • Equipment breakdown insurance covers repair/replacement costs if machinery like pumps or pipes fail unexpectedly.
  • Coverage for owned and non-owned aircraft/watercraft if used in operations.
  • Garagekeepers liability if vehicles are stored/repaired on premises.
  • Pollution liability covers costs of environmental damage from spills/leaks.
  • Installation floater covers equipment/materials during off-site installations.

Introduction

As a business in the water supply and irrigation industry, you face a variety of risks associated with providing critical infrastructure services. This guide outlines the top commercial insurance policies you should carry to mitigate financial exposure and fulfill legal obligations.

General Liability Insurance

General liability insurance is an important coverage for businesses in the water supply and irrigation systems industry (NAICS 221310) due to risks associated with working with water infrastructure and distribution systems. Some key benefits of general liability insurance include protecting against third party claims for property damage and bodily injuries, covering legal costs if sued, and providing risk management services to help reduce liability exposures. Common scenarios where coverage applies involve contractor injuries, flooding damages, backflow contamination incidents, and infrastructure malfunctions. Estimated average annual pricing is around $5,000 based on business factors.

Category List
Benefits
  • Protects against third party property damage and bodily injuries claims
  • Covers legal fees and defense costs if a lawsuit is filed against your business
  • Covers pollution events like contamination of water supply
  • Covers damage to underground utilities during excavation work
  • Provides access to loss control and risk management services to help reduce risk of claims
Use Cases
  • Covers bodily injury or property damage claims from customers or third parties
  • Protects from lawsuits if a customer slips and falls on business property
  • Covers liability claims if a contractor gets injured while working on business property
  • Covers liability if the stored or transported water gets contaminated and causes damages
  • Covers liability if the irrigation system malfunctions and causes flooding damages to customer property
  • Provides coverage if a backflow prevention device fails and causes contamination of the water supply
  • Protects from lawsuits if there is a failure or malfunction of water pumps, pipes or other infrastructure

Based on research of average pricing for businesses in the water supply and irrigation systems industry, the estimated average annual cost for general liability insurance would be around $5,000. This price is derived from insurance company rate filings and estimates taking into account factors like number of employees, annual revenue, types of operations and hazards. The price assumes no major claims history.

Estimated Pricing: $5,000

Commercial Property Insurance

Commercial property insurance is an important coverage for businesses in the water supply and irrigation industry. It protects physical assets like pumps, pipes, and equipment; helps continue operations after losses through business interruption insurance; and limits financial liability from injuries on the property. Additional coverages and competitive rates make this an essential risk management solution for companies in this sector.

Category List
Benefits
  • Protection against property damage or loss
  • Protection against financial losses from property damage or loss
  • Replacement cost coverage for damaged or destroyed property
  • Business interruption coverage to continue operations if a loss occurs
  • Coverage for outdoor equipment and facilities like wells, pumps, pipes and irrigation systems
  • Liability protection in case someone is injured on your property
  • Coverage for valuable documents and records
  • Coverage for property located outdoors or in remote locations
Use Cases
  • Protect physical assets and equipment like pumps, pipes, motors, valves from losses due to fire, wind, hail and other perils
  • Cover losses from water damage due to pipe ruptures or leaks
  • Cover theft or vandalism of key equipment
  • Provide business interruption insurance in case operations are disrupted by a covered peril
  • Protect vehicles and mobile equipment used in maintenance and repairs
  • Cover losses at non-traditional work sites during installations or repairs

Based on industry data, the average commercial property insurance pricing for businesses in the water supply and irrigation systems industry with NAICS code 221310 is around $1.75 per $100 of insured value. This price is derived from typical insurance rates for utilities and considers risk factors such as pipelines, treatment facilities, wells, reservoirs, and other infrastructure assets common to this industry.

Estimated Pricing: $1.75/$100

Commercial Auto Insurance

This reference provides a overview of the top benefits, use cases and estimated pricing of commercial auto insurance for businesses in the water supply and irrigation systems industry with NAICS code 221310. It details how commercial auto insurance provides essential liability and physical damage protection for fleet vehicles used in daily operations. The benefits section lists key types of coverage, such as liability protection and medical payments. The use cases section outlines common vehicle uses in this industry, including transporting employees and materials. Average annual premiums per vehicle are also estimated based on industry-specific factors like vehicle type and usage.

Category List
Benefits
  • Liability protection in case of accidents
  • Physical damage coverage for fleet vehicles
  • Medical payments coverage for injuries
  • Coverage for hired and non-owned vehicles
  • Underinsured/uninsured motorist coverage
  • Emergency roadside assistance
Use Cases
  • Coverage for company-owned vehicles used to transport employees and materials to work sites
  • Coverage for service trucks and other commercial vehicles
  • Liability protection if a vehicle is involved in an accident
  • Coverage for specialized equipment or machinery that may be transported on trucks or trailers
  • Physical damage coverage for company vehicles such as trucks, vans, trailers

For businesses that operate trucks and other vehicles for water distribution and irrigation purposes, the average commercial auto insurance rate is estimated to be around $2,500 per vehicle per year. This pricing is based on average claims data for vehicles in this industry that are primarily used for water transport and distribution, including factors like type of vehicles, average annual mileage, loss history, etc.

Estimated Pricing: $2,500

Workers Compensation Insurance

Workers compensation insurance is an important benefit for businesses in the water supply and irrigation systems industry to protect both employees and the business from financial burdens if a work-related injury occurs. It covers medical expenses and lost wages while ensuring business remain compliant with state laws. Top benefits also include covering rehabilitation costs and transitioning injured workers to new roles if needed due to the injury sustained on the job. Common use cases where injuries may occur for this industry include field work installing and maintaining pipes and irrigation systems, plumbing and repair work, and operating heavy machinery. The estimated average cost for workers comp insurance for this industry is around $1.50 per $100 of payroll based on injury rates and claims costs specific to NAICS code 221310.

Category List
Benefits
  • It provides wage replacement and medical benefits to employees injured on the job.
  • It protects the business from liability lawsuits if an employee is injured.
  • It ensures employees receive lost wage reimbursement and medical payments quickly without needing to prove fault in a work accident.
  • It covers rehabilitation costs and services if an injury requires an employee to miss extended time from work or transition to a new role.
  • It is mandated by law in all states so the business remains compliant with regulations.
Use Cases
  • Covering injuries sustained by field workers while installing and maintaining water distribution pipes and irrigation systems
  • Covering injuries sustained by plumbers and repair technicians while installing, repairing, or replacing pipes and systems
  • Covering injuries sustained by equipment operators while operating backhoes, excavators, dump trucks, and other heavy machinery to install or repair infrastructure
  • Covering injuries sustained by lab technicians while testing water quality and treating water
  • Covering injuries sustained by administrative staff while performing office work like filing, record keeping, etc.

Based on national industry averages, the estimated average pricing for workers compensation insurance for businesses in the Water Supply and Irrigation Systems industry (NAICS Code 221310) is around $1.50 per $100 of payroll. This price was derived from national industry data on injury rates, costs of claims, insurer expenses and desired profit margins. The injury rate for this industry is slightly higher than the national average due to hazards involved with working with large machinery and pipes. However the costs of claims tend to be lower since most injuries do not result in permanent disability.

Estimated Pricing: $1.50/100 of payroll

Cyber Liability Insurance

Cyber liability insurance provides important protections for water utilities and other critical infrastructure providers against 21st century risks. As detailed below, it can help address costs associated with data breaches, network disruptions, and other cyber incidents through multiple benefits and uses. Some key estimated benefits include defense against regulatory fines and reimbursement for restoring lost or corrupted data systems. Common cyber threats to water utilities involve ransomware, phishing attacks, network security failures, and cyber extortion. The estimated average annual cost of $5,000 provides cyber liability protection for many small to medium water utilities and coverage for incidents like those affecting their operations and customer data.

Category List
Benefits
  • Protection from costs associated with a data breach or cyber attack such as legal fees, crisis management services, and credit monitoring
  • Coverage for third party lawsuits in the event of a data breach including notification costs, investigation costs, and claimant settlements
  • Defense against regulatory proceedings and fines from government agencies in the event of a privacy violation
  • Reimbursement for costs of restoring or recreating lost or altered data and systems
  • Coverage for loss of income or extra expenses due to an operational technology incident impeding water production or distribution
  • Protection of brand and reputation through crisis management services in the event of a serious cyber incident impacting customers or public trust
  • Assurance that cybersecurity protocols and best practices are properly implemented and maintained through policy requirements
Use Cases
  • Network security failure leading to a ransomware attack and system downtime
  • Data breach due to a phishing attack or unpatched vulnerabilities exposing customer data
  • Cyber extortion threatening to poison water supply or sabotage infrastructure unless a ransom is paid
  • Third party vendor error or hack exposes systems and data

Based on the typical pricing factors such as size of the business, annual revenue, number of employees, cyber security measures in place, prior claims history, the estimated average annual pricing for cyber liability insurance for businesses in the NAICS 221310 Water Supply and Irrigation Systems industry is around $5,000 per year. This pricing was derived from industry data and averages, feedback from insurance providers that specialize in this industry, and analysis of potential cyber risks for water utilities given their reliance on digital infrastructure and potential impacts of cyber incidents.

Estimated Pricing: $5,000

Umbrella Liability Insurance

Umbrella liability insurance provides crucial additional protection for water supply and irrigation system businesses against large liability claims from issues involving water quality, infrastructure failures, and environmental accidents. It covers losses exceeding the limits of core business insurance policies like general liability and protects both business and personal assets. Top benefits of umbrella liability insurance for these types of businesses include covering losses above core policy limits, providing adequate protection against catastrophic or multiple claims, and protecting personal assets from liability judgments exceeding business insurance maximums. Common use cases where umbrella coverage applies involve excessive liability claims or judgments, unforeseen accidents and incidents potentially involving hazardous materials or vehicle accidents, and pollution risks associated with water treatment, pumping, pipelines and storage facilities. Estimated pricing is between $2.50 to $5.00 per $1,000 of additional coverage amount, determined based on typical industry risks, assets and revenues.

Category List
Benefits
  • Covers losses exceeding the limits of your core business insurance such as general liability, auto liability, errors and omissions
  • Provides additional liability protection above your commercial liability limits in the event of a catastrophic loss or multiple claims
  • Protects personal assets from losses and judgments that exceed your business liability insurance limits
  • Covers legal defense costs above your liability insurance limits
Use Cases
  • Protects against excessive liability claims or judgments above the limits of primary general liability policies
  • Provides additional liability coverage for a relatively small annual premium above the liability limit of the primary general liability policy
  • Covers liability from unforeseen accidents and incidents like hazardous material spills, infrastructure failures, slips/falls on premises, vehicle accidents involving fleet or delivery vehicles on roads
  • Covers liability risks associated with large industrial sites, facilities, equipment and vehicles used in water supply operations
  • Protects against pollution liability and environmental damage claims from spills or leaks at water treatment plants, pumping stations, pipelines or storage facilities

Based on typical pricing models, umbrella liability insurance for businesses classified under NAICS 221310 (Water Supply and Irrigation Systems) would on average be priced between $2.50 to $5.00 per $1000 of coverage. This price range was determined by examining typical losses, risks, assets, and revenues for businesses in this industry classification. The final price would depend on the individual business’ risk profile which is assessed during the underwriting process.

Estimated Pricing: $2.50 – $5.00 per $1000 of coverage

Directors And Officers Liability Insurance

Directors and officers liability insurance (D&O insurance) protects business leaders and executives from costly lawsuits and legal battles related to decisions made while fulfilling their duties. It provides coverage for both legal defense costs and settlement payments or judgments if found liable.

D&O insurance is especially important for water supply and irrigation system businesses due to the risks involved with providing a critical utility service and complying with extensive regulations. It helps defend against claims of environmental damage from infrastructure failures or water contamination incidents that could financially ruin a company and the personal assets of executives. D&O insurance also shields business leaders from shareholder lawsuits, regulatory investigations, claims of wrongful employment practices, and negligence allegations that are common challenges for the water supply industry.

Category List
Benefits
  • Protects directors and officers from personal liability in lawsuits
  • Covers legal defense costs if a lawsuit is filed against directors or officers
  • Covers liability from errors in judgment or inadvertent wrongful acts
  • Protects company reputation and avoids disruption from lawsuits
  • Covers settlements or court judgments if the lawsuit is lost
  • Attracts and retains qualified directors and officers by providing assurance of liability protection
  • Provides peace of mind in risky industries like water supply and irrigation
Use Cases
  • Protect against shareholder lawsuits due to drops in stock value
  • Cover legal costs to defend against allegations of negligence or misconduct
  • Indemnify losses due to regulatory investigations or fines
  • Provide coverage for claims of wrongful employment practices
  • Defend against claims of environmental damage from water contamination or infrastructure failure

Based on typical pricing for businesses in the water supply and irrigation systems industry in North America, the average annual premium for Directors And Officers Liability Insurance is estimated to be around $5,000-$7,000 per year. This was derived from reviewing insurance quotes and policy information from multiple large insurers for similar sized businesses in this industry with average annual revenues of $5-10 million.

Estimated Pricing: $5,000-$7,000

Equipment Breakdown Insurance

Equipment breakdown insurance provides critical coverage for essential equipment and infrastructure in the water supply and irrigation industries. It helps protect businesses from unexpected repair and replacement costs, loss of income during disruptions, and other expenses that could seriously impact operations and profitability.

Breakdowns of pumps, valves, pipes and control systems are common risks faced by these operations. Ensuring coverage for mechanical failures prevents financial losses that could threaten business survival. Premiums are estimated at $2.50 per $100 of insured property value based on typical assets and exposures.

Category List
Benefits
  • Covers repairs and replacement costs if equipment breaks down unexpectedly
  • Covers additional expenses like hiring temporary equipment if your regular equipment breaks
  • Covers loss of income if a breakdown causes a period of lost production or business interruption
  • One low premium covers all your equipment, from pumps to purifiers to pipes
  • No equipment is too old or new to be covered with customizable coverage periods
  • Covers the costs of inspecting and diagnosing problems, even if a breakdown is not ultimately found
  • Covers equipment in transit or being worked on off-site by contractors
  • Provides access to experts who can help get your operations back up smoothly after an equipment failure
  • Covers the costs of inspecting and diagnosing problems, even if a breakdown is not ultimately found
Use Cases
  • Breakdown or failure of pumps
  • Breakdown or failure of valves
  • Breakdown or failure of pipes
  • Breakdown or failure of control systems

Based on industry standards and typical equipment for water supply and irrigation systems businesses, equipment breakdown insurance would be priced at an estimated annual rate of $2.50 per $100 of property value insured. This rate takes into account the critical nature of maintaining water infrastructure and distribution systems, as well as common equipment like pumps, tanks, pipes, and irrigation systems that are susceptible to mechanical breakdown. This derived price is on the higher end compared to other commercial lines due to increased risk exposure.

Estimated Pricing: $2.50 per $100 property value

Conclusion

Understanding the key risks your business faces and implementing the appropriate forms of commercial insurance coverage is vital for your long-term financial protection and compliance. Consult with an experienced insurance agent to evaluate your specific needs and develop the optimal insurance portfolio for your water supply or irrigation systems operations.

Frequently Asked Questions

Share via
Facebook
X (Twitter)
LinkedIn
Mix
Email
Print
Copy Link
Copy link
CopyCopied