Telecommunications Insurance Policy Information
Telecommunications Insurance. Telecommunication companies provide the wiring, cabling, equipment, and ongoing maintenance for services to residences and commercial enterprises. These companies may offer automated answering systems, cable access, internet access, and local, long-distance, and international telephone service, special communications devices for customers with physical disabilities, telegraphs, and wireless communications.
Service may be provided using overhead lines, underground utility cables, fiber-optic, microwave, or satellite systems.
The world is more connected than ever before, and as a telecommunications provider, you play a key role in keeping your clients connected. You may provide any number of services for your clients; for example, you may offer products and services to other business owners, or you may provide services to residential clients. Whatever services you provide, they play an invaluable part in connecting the clients you serve. While you do your best to ensure that everything runs as smoothly as possible, you never know if or when something will go wrong.
To protect yourself from the unexpected, you need to have the right type of telecommunications insurance coverage.
What type of insurance do telecommunications companies need? How much coverage should you carry? Read on to find the answers to these questions and more.
Telecommunications insurance protects your telecom company from lawsuits with rates as low as $39/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked office machine services insurance questions:
- What Is Telecommunications Insurance?
- How Much Does Office Machine Repair And Maintenance Insurance Cost?
- Why Do Telecommunications Businesses Need Insurance?
- What Type Of Insurance Do Telecommunications Businesses Need?
- What Are Telecommunications Risks & Exposures?
- What Does Telecommunications Insurance Cover & Pay For?
What Is Telecommunications Insurance?
Telecommunications insurance is a type of insurance that protects telecommunications companies, such as phone and internet service providers, against financial losses due to various risks.
This can include damage to equipment or infrastructure, loss of income due to service disruptions, and liability claims arising from third-party injuries or damage caused by the company's operations.
The insurance may also cover the cost of restoring or replacing damaged equipment, and may provide coverage for losses caused by cyber attacks or other cyber-related incidents.
How Much Does Telecommunications Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small telecom companies ranges from $39 to $57 per month based on location, services offered, payroll, sales and experience.
Why Do Telecommunications Businesses Need Insurance?
Telecommunications companies need insurance for the same reasons that any other business or organization needs insurance: to protect against financial losses resulting from unexpected events.
In the case of telecommunications companies, there are many potential sources of financial risk. For example, the company's equipment and infrastructure may be damaged by natural disasters, such as storms or earthquakes. There is also the risk of financial loss due to theft, sabotage, or other criminal activities.
Additionally, telecommunications companies may be sued if they are accused of violating laws or regulations, or if they are found to be responsible for accidents or injuries that occur on their premises.
In addition to the financial protection that insurance provides, you're also legally required to carry certain types of coverage; if you fail to have the necessary coverage, you won't be operating in compliance with the law and could end up facing stiff penalties and there's a chance that you could lose your business.
Insurance can provide protection against these and other potential sources of financial loss, helping telecommunications companies to stay financially stable and operational in the face of unexpected events.
What Type Of Insurance Do Telecommunications Businesses Need?
The specific type of telecommunications insurance coverage you'll need depends on a variety of factors; the location of your business, the specific services you provide, and the size of your operation, for example. With that said, however, there are certain policies that all telecom providers should have in place, regardless of these unique factors, including:
- General Liability - . This type of telecom business liability insurance safeguards you from the financial losses that are associated with third-party property damage and injury claims. For instance, if a operate a retail center, a client slips and falls on the premises, sustains an injury, and files a lawsuit against you, commercial general liability insurance will cover the associated costs, including legal defense fees and monetary damages you may be required to pay.
- Commercial Property - This policy covers the cost of damages that your commercial space may incur as a result of acts of nature of vandalism. For instance, if your office is damaged by a fire, commercial property insurance will cover the cost of any necessary repairs, as well as replace any tools and supplies that may be damaged by flames or smoke
- Electronic Data Loss - As a telecommunications company, you store a lot of data, such as software and sensitive client information. If power outages occur or viruses infect, corrupt, and compromise the sensitive information you store, electronic data insurance will help to cover the cost of replacing and recovering files.
- Workers Compensation - As a business owner, you are responsible for providing your employees with a safe work environment. Therefore, if a member of your staff sustains a work-related injury, you'll have to cover the cost of any medical care he or she may need, as well as the wages that the employee may lose while recovering; workers comp pays for these expenses.
What Are Telecommunications Risks & Exposures
Premises liability exposure at the main office location is usually light as communication with customers is done by mail or electronically. Off-site premises exposures are heavy due to the running of lines or cables, both above ground and below ground. Company vehicles may disrupt normal traffic flow, requiring adequate notice to motorists to prevent accidents. Technicians may damage customers' premises when installing lines and cables within buildings. Excavation and maintenance of underground lines could cause damage to the property of others.
Towers pose an attractive nuisance to children and teenagers and should be fenced to prevent unauthorized access. Terrorism is a potential threat to public services. There must be adequate security to deter unauthorized access to any part of the company's premises. Despite the lack of scientific evidence, some cellular service providers have been sued on the allegation that repeated exposure to electromagnetic radiation causes injuries to people or animals. Personal injury exposures may result from failing to adequately secure customer information. Complaints by customers to the FCC regarding "slamming" or "cramming" offenses may result in high defense costs.
Completed operations exposures can be high if equipment is not properly installed. Loss of communications service could result in loss of earnings to businesses, particularly those who derive the bulk of their income from online sales.
Workers compensation exposures are very high. Working with power lines can result in electrical shocks. There should be adequate shutoff and lockout procedures to make sure the wiring is not live.
Falls can occur from ladders, scaffolds or cherry pickers, utility poles or towers. Adequate personal protective equipment is required. Failure to adequately warn motorists of road hazards can result in a worker being hit by a motor vehicle. Laying of underground cable can result in back sprains and strains from dragging heavy cables, or exposure to collapse hazards. Prolonged exposure to electromagnetic microwave or cellular transmissions has been linked to occupational disease.
Workers who visit customers' premises may be attacked by dogs or other animals. 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.
Property exposures are high due to the high concentration of electronic equipment on premises. Ignition sources include electrical wiring, heating and air conditioning systems, and overheating of equipment. All of these require ongoing maintenance. Adequate fire detection and suppression equipment is recommended. Power surge equipment is needed to prevent lightning and other power losses. Smoke and water damage, even from a small fire, can result in a major loss without extensive contingency planning. Switching stations should be protected and security provided.
If maintenance and fueling of service vehicles is done on premises, all flammables must be stored away from heated areas in a fireproof cabinet. Welding and soldering should be done in a well-ventilated area that is free of combustible materials. Communications equipment may be targets for theft. 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.
Telecommunication companies have very high exposure to business income loss as any power outage affects service to residential and business customers. Extra expenses may be high, as repairs must be made quickly to reduce downtime to dependent customers.
Equipment breakdown exposure includes breakdown losses to telecommunication devices, electrical control panels and other apparatus. All equipment must be inspected and maintained on a regular basis. Back-up generators should be available.
Crime exposure is from computer fraud and employee dishonesty. The exposure increases without thorough background checks of employees. Billing, ordering, and disbursement should be under separate supervisors. Reconciliation and audits should be routine. 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 is from accounts receivable as the company regularly bills customers for service, computers, radio and television floater (including towers), tools and equipment, and valuable papers and records for customers' and suppliers' information. The company is likely to have extensive communications systems, including computers, which are very expensive and must be backed up regularly. Computer systems must have adequate security features to prevent unauthorized access due to industrial espionage or by hackers. Communications towers are often in remote areas, and should be fenced to prevent access by unauthorized persons. Towers are susceptible to loss by high winds, lightning, icing, and airplanes. Protective features such as guy wires, lighting and de-icing equipment, are needed.
Service technicians carry tools and equipment to customers' premises for installation and repair. Vehicles should be kept locked at all times. Duplicates of records must be made often and stored off site. Storage on premises should consist of fireproof cabinets. There may be a contractors' equipment exposure if the company installs its own underground cables.
Commercial auto exposure may be high. If the company does its own repairs, vehicles are on the road on both routine and emergency basis. The vehicles must be out 24 hours per day, sometimes on rough terrain in inclement weather. Cable and the equipment used to install it are awkward to transport. Secure tying down is vital to prevent heavy damage to other vehicles. Vehicles may be parked along roads, disrupting regular traffic. Proper signage is required to warn drivers.
All drivers must be licensed with acceptable MVRs. Regular training should be provided in driving under difficult situations. All vehicles must be well maintained with documentation kept in a central location. If vehicles are provided to employees, there should be written procedures in place regarding personal use by employees and their family members.
What Does Telecommunications Insurance Cover & Pay For?
As with any business, telecommunications companies can face various legal challenges that may result in lawsuits. Some common reasons why telecommunications businesses may be sued include:
Breach of contract: Telecommunications companies often have contracts with customers, suppliers, or other parties. If there is a breach of contract, such as failure to provide services as agreed upon or failure to meet contractual obligations, the affected party may file a lawsuit. Insurance coverage, such as Errors & Omissions (E&O) insurance or Contractual Liability insurance, can help protect the telecommunications business by covering legal costs and damages awarded in case of a breach of contract lawsuit.
Personal injury or property damage: Telecommunications companies may face lawsuits related to personal injury or property damage. For example, if a customer or third party suffers bodily injury or property damage due to a telecommunications company's negligence, they may file a lawsuit. General Liability insurance can provide coverage for such claims, including legal defense costs and damages awarded.
Intellectual property infringement: Telecommunications companies may be sued for infringement of intellectual property rights, such as patents, trademarks, or copyrights. Intellectual Property Liability insurance can help protect a telecommunications business by covering legal costs and damages related to intellectual property infringement lawsuits.
Employment disputes: Telecommunications companies may face lawsuits related to employment disputes, such as wrongful termination, discrimination, or harassment claims. Employment Practices Liability insurance can provide coverage for legal defense costs and damages awarded in case of employment-related lawsuits.
Regulatory violations: Telecommunications companies operate in a highly regulated industry and may face lawsuits related to regulatory violations, such as non-compliance with telecommunications laws, regulations, or licensing requirements. Regulatory Liability insurance can help cover legal costs and damages associated with regulatory violation lawsuits.
Insurance can protect telecommunications businesses by providing financial coverage for legal defense costs, settlements, or judgments awarded in lawsuits. This can help alleviate the financial burden of defending against lawsuits and paying damages, which can be substantial and potentially threaten the financial stability of the business. It is important for telecommunications companies to carefully review their insurance policies, understand the coverage provided, and work with an experienced insurance broker or attorney to ensure they have appropriate insurance coverage tailored to their specific needs and potential risks.
Commercial Insurance And Business Industry Classification
- SIC CODE: 4813: Telephone Communications, Except Radiotelephone, 4812 Radiotelephone Communications, 4822 Telegraph and Other Message Communications, 4899 Communications Services, Not Elsewhere Classified
- NAICS CODE: 517210 Wireless Telecommunications Carriers (Except Satellites), 517410 Satellite Telecommunications, 517110 Wired Telecommunications Carriers
- Suggested Workers Compensation Code(s): 7600 Telecommunications Co. - Cable TV, or Satellite - All Other Employees & Drivers, 8901 Telecommunications Co.: Office or Exchange Employees & Clerical
Description for 4813: Telephone Communications, Except Radiotelephone
Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 48: Communications | Industry Group 481: Telephone Communications
4813 Telephone Communications, Except Radiotelephone: Establishments primarily engaged in furnishing telephone voice and data communications, except radiotelephone and telephone answering services. This industry also includes establishments primarily engaged in leasing telephone lines or other methods of telephone transmission, such as optical fiber lines and microwave or satellite facilities, and reselling the use of such methods to others.
- Data telephone communications
- Local telephone communications, except radio telephone
- Long distance telephone communications
- Voice telephone communications, except radio telephone
Description for 4812 Radiotelephone Communications
Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 48: Communications | Industry Group 481: Telephone Communications
4812 Radiotelephone Communications: Establishments primarily engaged in providing two-way radiotelephone communications services, such as cellular telephone services. This industry also includes establishments primarily engaged in providing telephone paging and beeper services and those engaged in leasing telephone lines or other methods of telephone transmission, such as optical fiber lines and microwave or satellite facilities, and reselling the use of such methods to others.
- Beeper (radio pager) communications services
- Cellular telephone services
- Paging services: radiotelephone
- Radiotelephone communications
Description for 4822: Telephone Communications, Except Radiotelephone
Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 48: Communications | Industry Group 482: Telegraph And Other Message Communications
4822 Telegraph and Other Message Communications: Establishments primarily engaged in furnishing telegraph and other nonvocal message communications services, such as cablegram, electronic mail, and facsimile transmission services.
- Cablegram services
- Electronic mail services
- Facsimile transmission services
- Mailgram services
- Photograph transmission services
- Radio telegraph services
- Telegram services
- Telegraph cable services
- Telegraph services
- Teletypewriter services
- Telex services
Description for 4899: Communications Services, Not Elsewhere Classified
Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 48: Communications | Industry Group 489: Communications Services, Not Elsewhere Classified
4899 Communications Services, Not Elsewhere Classified: Establishments primarily engaged in furnishing communications services, not elsewhere classified.
- Radar station operation
- Radio broadcasting operated by cab companies
- Satellite earth stations
- Satellite or missile tracking stations, operated on a contract basis
- Tracking missiles by telemetry and photography on a contract basis
Telecommunications Insurance - The Bottom Line
To find out more about what other telecommunications insurance policies you should have - and how much coverage you should carry for both regional and national networks, speak with an experienced an experienced commercial insurance broker.
Additional Resources For Information Technology & Internet Insurance
Learn about small business IT technology insurance policies that help protect IT businesses, consultants & subcontractors from the unique risks that small tech businesses face when they work.
- Application Development
- Amazon Seller
- Artificial Intelligence
- Computer Electronic Repair
- Computer Programming
- Computer System / Network Developer
- Cyber Liability
- Data Breach
- eBay Sellers
- Electronic Data Processing
- Electronic Data Processing Equipment
- Internet Business
- Internet Service Provider
- IT Consultant
- Online Store
- Social Media
- Software Developer
- Technology Services
- Website Design
- Specialty Computer
The information technology (IT) industry is constantly evolving and adapting to new technologies and trends. It is a critical component of many businesses and organizations, as it helps them to communicate, store data, and operate efficiently. However, the IT industry also faces unique risks and challenges that can lead to financial losses, legal issues, and damage to reputation. This is why it is essential for IT businesses to have commercial insurance to protect their assets and interests.
One of the main risks that IT businesses face is data breaches and cyber attacks. Hackers can gain access to sensitive information stored on a company's servers or systems, leading to data theft, identity theft, and other crimes. Insurance can provide coverage for these types of events, helping IT companies to mitigate the financial and legal consequences.
Another risk that IT businesses face is the possibility of equipment failure or malfunction. This can result in downtime and lost productivity, which can have a significant impact on a company's bottom line. Commercial insurance can help IT businesses to cover the costs of repairs and replacements, as well as any lost revenue or expenses incurred due to the equipment failure.
IT businesses may also face legal issues, such as intellectual property disputes or contract disputes with clients. Insurance can provide coverage for legal fees and damages, helping IT companies to defend their interests and protect their reputation.
Overall, the IT industry needs business insurance to protect against the many risks and challenges it faces. Without adequate coverage, IT businesses may be vulnerable to financial losses and legal issues that could impact their operations and success.
Minimum recommended small business insurance coverage: Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Computer Fraud, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Errors and Omissions Liability, Professional Liability, Umbrella Liability, Hired and Nonowned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Building, Earthquake, Flood, Real Property Legal Liability, Forgery, Cyber Liability, Employment-related Practices Liability, Directors and Officers Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.