Your telecommunications company is a vital partner to all your clients, but that also means you carry an elevated risk of liability. A failure on your part could take down a client’s entire operation. Beyond that, you hold highly valuable inventory that needs to be insured against fires, burst pipes and other disasters.
Let’s look at some options for liability and property insurance that will help protect your company from financial loss.
Property insurance for telecommunications companies
Whether you keep installation supplies in your office or a warehouse, they are at risk of damage from severe weather and other incidents, such as burst pipes, vandalism and fires. You also have your own office equipment to cover.
A typical commercial property insurance policy covers the buildings you own and the contents within them. If you lease your office space, your landlord will have insurance that covers the building structure, but you will probably need to insure any betterments you make. Examples include carpeting, shelving, cabinetry and internet upgrades.
If an upgrade you made is destroyed by a fire, lightning strike, or burst pipe and you don't have coverage, you would have to pay out of pocket to repair or replace it.
Know that there may be some important restrictions on your commercial property policy regarding computer equipment. Since your inventory and the operational equipment you use to conduct business are highly valuable, you may need more than just the standard contents coverage.
Ask us about inland marine insurance for your telecommunications equipment. You may need inland marine insurance because of the high cost of your equipment. And you will certainly need it for any equipment you take to jobsites. Commercial property insurance is designed to cover what’s at your premises, and not items in transit or off-site.
You will also likely want to add an equipment breakdown policy to your insurance suite. It covers crucial building systems, such as air conditioning. It can be written to help pay for extra emergency expenses.
For example, if your central air fails, an equipment breakdown policy would pay for a portable air conditioner while your central air is being repaired. It can also help with cash flow if your business has to shut down due to property damage from a covered peril, like a fire.
You can get added business income protection with a business interruption insurance policy. Business interruption insurance can be written to cover a shutdown due to a utility failure caused by a covered event, like a storm or fire. Business income insurance is important if you cannot provide your services from another location.
While theft is typically covered under standard commercial property insurance, employee theft is not. There are a few kinds of employee crime that you should ask us about.
One is embezzlement or other money theft by an employee. This can be covered by something called a fidelity bond. You may also wish to get a service bond, which will compensate your client if an employee steals from a jobsite.
Another consideration is employee theft of inventory. This is different from embezzlement coverage and requires its own kind of crime coverage.
First-party cyber risk insurance is another coverage you need. It protects your company from hefty financial loss due to failures of or attacks on your computer networks. It can help restore data, repair equipment, and even pay a ransom to unlock criminally encrypted systems or files.
Liability insurance for telecommunications companies
Your professional services can make or break business for your clients. If you make an error, you can be held responsible for any financial damages. For these situations, you need a professional liability insurance policy designed for the telecommunications industry.
Often called errors and omissions (E&O) insurance, this type of policy helps with attorney fees and monetary reparations if you are accused of failing in your professional duties. This can include bad advice, service and installation errors, or negligence.
Cyber liability insurance is also vital to your business, since hackers are constantly looking for ways to infiltrate networked systems. If a cybersecurity failure on your part allows a breach of a customer’s system, you may have to pay to correct the breach. Cyber liability insurance helps with those costs, as well as your legal defense and crisis response expenses.
General liability insurance is a basic, broad policy that all businesses should carry. It responds if anyone other than an employee is injured on your premises. It will also kick in if an employee harms a client or damages client property on their premises. Examples include spilling a drink on a keyboard or cutting a pipe while installing a cable.
Other common insurance needs
Workers’ compensation insurance is an important policy for any telecommunications provider with employees. It pays for medical care, rehabilitation and lost wages if an employee is injured on the job.
Commercial auto insurance is also essential, since your employees drive for work. Whether they use their own vehicles or company ones, you need business auto liability and collision insurance.
You may also wish to carry comprehensive coverage. This helps pay for repairs if your vehicle is damaged by flying or falling debris, a fire, vandalism, theft or a flood. If your employees drive their own vehicles, you need hired and nonowned auto coverage. This will protect their assets and yours if they are in an accident while driving their own vehicle for work.
Employment practices liability insurance is another coverage that is increasingly important. It steps in to help with attorney fees, settlements and judgments if your company is accused of discrimination, harassment or other wrongful treatment of an employee.
If your telecommunications company has towers or does construction work, you will have other special needs. For example, you might need coverage for your role as a subcontractor (or even the lead) on an installation project.
As you research your insurance options, you may hear about business owners policies (BOPs) for telecommunications companies. A BOP may be a good fit, especially if you are a small firm. But you will still need to build out your coverage with some of the policies mentioned above, so you are protected from common events not covered by your BOP.
We can help you secure the right blend of protections to fit your budget and your business.