Electric Utilities Insurance

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Electric Utilities Insurance Policy Information

Electric Utilities Insurance

Electric Utilities Insurance. Electric utility companies are responsible for generating and distributing electric power, in turn supplying residences, all branches of commerce, and public infrastructure at the same time.

With modern civilization being, to a colossal extent, entirely dependent on electricity, there is no question that electric utility companies play a vital role in both the global economy and the individual communities they serve.

Electrical utilities generate electrical power, distribute power, or both to residential and commercial enterprises. Service may be provided using overhead lines or underground utility cables. In a power generation operation, energy is produced by various sources and converted into electrical power.

Those sources of energy include the burning of fossil fuel, such as coal or oil, the movement of water or wind, geothermal, biomass, solar, or nuclear. Massive generators feed the initial energy source through transformers to convert it to electrical energy.

The electrical power can be distributed directly to end users by the generating plant or sold to electrical power distribution operations, which buy and sell energy to support the needs of their customers.

While companies providing this invaluable service will strive to ensure that they are not affected by major perils, the risk of disaster can never be reduced to zero. This is why it is crucial for electric utilities to carry the right types of insurance. Learn more about what kinds of electric utilities insurance coverage that may entail in this short guide.

electric utilities insurance protects electric companies from lawsuits with rates as low as $297/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked electric company insurance questions:


How Much Does Electric Utilities Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small electic utilities ranges from $297 to $479 per month based on location, number of customers, source of electricity, revenue, claims history and more.


Why Do Electric Utilities Need Insurance?

Electric Meters

Like any other public or commercial entity, electric utilities are vulnerable to a multitude of risks. In the form of unforeseen circumstances, they can arrive on any day, often without warning.

Some of the hazards that threaten utility companies are virtually universal, having the potential to cause damage to any commercial venture, while others are more industry-specific.

Property risk is the first type of risk an electric utility has to consider. Buildings and other physical assets, including industrial equipment, may be damaged or destroyed by circumstances such as acts of nature (earthquakes, wildfires, and lightning strikes, to name but a few), as well as theft, vandalism, or accidents.

Such perils are accompanied by direct expenses, in the form of repair or replacement costs, as well as consequential fees in the form of business interruptions.

Liability risk is the second type of threat. Electric utilities can be held responsible for malfunctions or negligent acts that lead to third party personal injury or property damage, for example, in which case the legal costs are likely to be massive.

When an employee suffers an occupational injury or illness, the company can, again, be held liable.

Any significant peril that befalls an electric company could lead to costs so high that the company may not survive - unless it has equipped itself with comprehensive electric utilities insurance.


What Type Of Insurance Do Electric Utilities Need?

The modern insurance market is both vast and complex - and the fact that each company is unique means that it is crucial to carefully consider whether an electric utility company has the quality insurance it requires.

To achieve complete peace of mind, electric utility companies should always consult with a skilled commercial insurance broker specializing in utilities. These professionals can help utility companies craft insurance programs that cover every eventuality.

Keeping in mind the fact that no two utility companies will have identical insurance plans, these are some of the most important types of electric utilities coverage needed:

  • Commercial Property - This kind of insurance protects a company from financial losses if its physical assets - including, but not limited, to buildings - are damaged or destroyed by perils that include acts of nature, theft, vandalism, and certain accidents.
  • Commercial General Liability - Privately-operated electric utilities will need to equip themselves with several kinds of liability insurance, including general liability coverage. This helps to cover legal and settlement expenses in cases of third party personal injury or property damage claims. Public entities should instead opt for public entity management liability insurance.
  • Pollution Liability - This type of electric utilities coverage helps manage the costs that result if a company's activities lead to environmental damage. Because these policies offer diverse kinds of coverage, it is crucial to closely evaluate what eventualities any given plan includes.
  • Equipment Breakdown - Should crucial equipment that a company relies on break down, this type of insurance can help bridge the revenue lost as a result.
  • Workers Compensation - If an employee is injured at work, or falls victim to an occupational illness resulting from exposure to hazardous substances, employees are liable for the associated costs. Workers' comp covers such employees' medical bills, but also any income they lose if they time to recover.

While any electric utility will need to carry these types of insurance, they are simply examples of the coverage a company within this branch of commerce requires.

Commercial insurance brokers are crucial on the path toward obtaining a electric utilities plan specifically tailored to an individual business.


Electric Utilities' Risks & Exposures

Nuclear Power Plant

Premises liability exposure at the main office location is light as communication with customers is primarily done by mail or electronically. Customer and visitor access should be limited and well controlled. Stairways, railings, and floor coverings should be in good condition. Exits should be clearly marked and free of obstacles.

Adequate lighting should be available in the event of a power outage. Parking areas should be maintained free of snow and ice. Premises should be fenced, well-marked, and patrolled where necessary.

Off-site premises exposures are heavy due to the running of lines or cables, both above and below ground. Rights of way must be secured so that maintenance of the lines can occur as needed. Excavation and maintenance of underground lines could cause damage to the property of others.

Vehicles loaded with cranes or cherry pickers present an operations exposure while in use. Flaggers or signs should be used to alert traffic around the working area. Towers pose an attractive nuisance exposure to children and teenagers and should be fenced and regularly inspected.

Terrorism is a potential threat to public utility services. There must be security sufficient to deter unauthorized access to any part of the utility's premises.

Environmental liability exposures are high due to the potential contamination of air, soil, or water. The type of fuel the emissions, waste, and controls in place are important to evaluate. All must meet state and federal requirements.

Workers compensation exposure is high. Working with power lines can result in electrical shock, burns, and falls from utility poles or cherry pickers. There should be adequate shutoff and lockout procedures to make sure the wiring is not live.

Lying of underground cable can result in back sprains and strains from dragging heavy cables, or exposure to collapse hazards. Drivers can be injured in auto accidents while driving heavy equipment or while working in adverse conditions.

Failure to adequately warn motorists of road hazards can result in a worker being hit by a motor vehicle. Hearing loss can occur due to exposure to high noise levels. Lung, skin, and eye irritations can result from exposure to contaminants.

In the office where most work is done on computers, potential injuries include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations.

Nuclear energy operations present specialized concerns that should be reviewed and evaluated by nuclear hazard experts.

Property exposure is high at a generating plant from burning fuels or converting other sources of energy into electricity. Some fuel sources are highly combustible. In the distribution of the power, the age, condition, and maintenance of the equipment are critical concerns in assessing the fire potential.

Equipment and machinery must be maintained on an ongoing basis. Electrical wiring must be up to code and adequate for the operations.

To remain competitive, there should be a program in place to offer up-to-date equipment and a program to replace old with new on a scheduled basis. Adequate fire detection and suppression equipment are recommended. Power surge equipment is needed to prevent lightning and other power losses. Utility companies may be a target for terrorists.

Appropriate security controls should be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.

Nuclear energy operations present specialized property concerns, which should be reviewed and evaluated by nuclear power experts. Business interruption can be high as backup facilities may not be available. Extra expenses may be high, as repairs must be made quickly to reduce downtime to dependent customers.

Equipment breakdown exposure is high due to the specialized nature of the equipment. Equipment must be regularly tested, maintained, and documented. Back-up generators should be available.

Crime exposure due to employee dishonesty is extremely high. Background checks should be made on all employees who handle funds. Ordering, billing, and disbursements must be handled in separate areas. All must be reconciled on a regular basis and regular audits conducted.

Computer fraud potential can be high as many customers pay by Electronic Fund Transfer (EFT). Adequate security is required to prevent unauthorized access to customer information.

Inland marine exposure includes accounts receivable as customers are billed for services, computers, contractors' equipment, radio towers and transmission lines, and valuable papers and records for customers', suppliers', and regulatory information. Computer systems must have adequate security features to prevent unauthorized access from hackers.

Contractors' equipment can include excavation machinery, cranes, and cherry pickers in addition to employees' tools. Equipment should be kept on premises, not at remote locations, with portable items locked in the cab. Towers and overhead transmission lines are subject to loss by fire, lightning, the weight of ice and snow, wind, vandalism, and collision with aircraft.

All equipment must be well maintained. Towers should have guy wires, be grounded, be lighted, and have de-icing controls in areas with inclement weather. Towers may be attractive nuisances for children and teens.

Adequate security, including fencing, should be appropriate for the area. Emergency plans must be in place and reviewed regularly. Duplicates of records must be made often and stored off site.

Commercial auto exposure is high due to the ongoing transport of equipment, fuel, and machinery. Drivers often must operate in the dark or in adverse weather conditions while driving vehicles loaded with heavy equipment, cranes, or cherry pickers.

Vehicles may be parked along roads, disrupting regular traffic. Proper signage is required to warn drivers. MVRs must be run regularly on all drivers. Maintenance of vehicles must be ongoing with records retained in a central location.

Commercial Insurance And Business Industry Classification

  • SIC CODE: 4911 Electric Services, 4931 Electric And Other Services Combined
  • NAICS CODE: 221111 Hydroelectric Power Generation, 221112 Fossil Fuel Electric Power Generation, 221113 Nuclear Electric Power Generation, 221114 Solar Electric Power Generation, 221115 Wind Electric Power Generation, 221116 Geothermal Electric Power Generation, 221117 Biomass Electric Power Generation, 221118 Other Electric Power Generation, 221121 Electric Bulk Power Transmission and Control, 221122 Electric Power Distribution
  • Suggested ISO General Liability Code(s): 92445, 92453, 92447
  • Suggested Workers Compensation Code(s): 7539, 7540, 7538

Description for 4911: Electric Services

Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 49: Electric, Gas, And Sanitary Services | Industry Group 491: Electric Services

4911 Electric Services: Establishments engaged in the generation, transmission, and/or distribution of electric energy for sale.

  • Electric power generation, transmission, or distribution

Description for 4931: Electric And Other Services Combined

Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 49: Electric, Gas, And Sanitary Services | Industry Group 493: Combination Electric And Gas, And Other Utility

4931 Electric And Other Services Combined: Establishments primarily engaged in providing electric services in combination with other services, with electric services as the major part though less than 95 percent of the total.

  • Electric and other services combined (electric less than 95 percent of the total)

Electric Utilities Insurance - The Bottom Line

To discover more information the the types of electric utilities insurance policies need and how much the cost, consult with a reputable commercial insurance broker that is experienced in utilities insurance.

Types Of Small Business Insurance - Requirements & Regulations

Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.

Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.

Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.

Small Business Information

Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.

Small Business Insurance Information

In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.

The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.

Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.

According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.

Types Of Small Business Insurance

Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:

  • What type of business am I running?
  • What are common risks associated with this industry?
  • Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
  • Does my state require me to carry this type of insurance?
  • Does my lender or do any of my investors require me to carry this type of policy?

A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:

Business Insurance Policy Type What Is Covered?
General Liability InsuranceWhat is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.
Workers Compensation InsuranceWhat is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.
Product Liability InsuranceWhat is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.
Commercial Property InsuranceWhat is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.
Business Owners Policy (BOP)What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.
Commercial Auto InsuranceWhat is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.
Commercial Umbrella PoliciesWhat is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.
Liquor Liability InsuranceWhat is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.
Professional Liability (Errors & Omissions)What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.
Surety BondWhat is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).


Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.

Business Insurance Required by Law
Small Business Commercial Insurance

If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.

Your insurance agent can help you check applicable state laws so you can bring your business into compliance.

Other Types Of Small Business Insurance

There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:

  • Business Interruption Insurance
  • Commercial Flood Insurance
  • Contractor's Insurance
  • Cyber Liability
  • Data Breach
  • Directors and Officers
  • Employment Practices Liability
  • Environmental or Pollution Liability
  • Management Liability
  • Sexual Misconduct Liability

Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.

Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.

Additional Resources For Miscellaneous Insurance

Find informative articles on miscellaneous businesses including the types of commercial insurance they need, costs and other considerations.


Miscellaneous Business Insurance

An insurance contract is an agreement where one party obligates itself to make good the financial loss or damage sustained by a second party when a designated event occurs. The event must be fortuitous and happen by accident. The named insured must have insurable interest at the time of loss. One final point is that in order for any contract to be considered insurance, there must be a risk of loss.

Fortuitous Event - An occurrence largely beyond the control of any involved party; happening by chance; accidental; for example: fire, lightning, windstorm, explosion or flood.

Insurable Interest - In order to recover from a loss to property, the holder must have an insurable interest in the property at the time of the event or occurrence. An insurable interest is any right, title or interest in property where the holder of that right, title or interest sustains financial loss if the property is damaged or destroyed. Any lawful and substantial economic interest in the safety or preservation of the property from loss, destruction or damage also constitutes an insurable interest.

An entity does not have to be the property owner to have an insurable interest in it. Examples include, but are not limited to, mortgagees, trustees, vendors, lessees and bailees. Insurable interest for any entity must exist at the time the loss occurs.

Risk Of Loss - If property could never be destroyed, there is no risk of loss. If property must necessarily disintegrate or be destroyed, there is no risk of loss. Between these two extremes is the exposure of risk that can be insured.


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