The goal of any commercial insurance policy is to protect the golden goose that is your business and keep it laying eggs without disruption at the time of a claim. For wastewater industry companies, that includes a focus on protecting against the perils of losing expensive and critical equipment and keeping your business operating smoothly and efficiently when any kind of calamity strikes.

For example, if you run a one-driver, one-truck business and your main vehicle is totaled in an accident, without business interruption coverage on that vehicle (loss of income coverage), the golden goose is not being protected as adequately as it could be. It is essential for any wastewater-related business — from the mom and pop operation to much larger companies — to take advantage of the latest insurance offerings.

The core objectives of commercial insurance have remained unchanged over the past decade (proper coverage, quick claims resolution and payment, aggressive customer service, ongoing business operations, etc.). But the options for meeting these objectives has dramatically advanced over this same time period. New insurance coverages may significantly benefit your business.

If you have not conducted a review of your commercial insurance coverage recently, consider these options to personalize your policies specifically for septic and sewer businesses. Here are points to consider:

Replacement cost coverage for vacuum and jetter equipment 10 years old or newer.

Auto insurance is rated on an actual cash value basis, or more commonly referred to as “depreciated cost” basis. However, in the commercial insurance world for wastewater contractors, vacuum or jetter trucks can now be insured for full replacement cost, not depreciated value, if it is 10 years old or newer.

Let’s say you purchase a brand-new vacuum truck for $200,000. Let’s also say the vehicle is totaled in an accident eight years after purchase. With replacement cost coverage, you will receive $200,000 (minus any deductible) from the insurance company. With actual cash value, or depreciated cost insurance, you might be lucky to receive $65,000 for the totaled vehicle due to its age and depreciation.

Obviously we are talking about a significant difference. Replacement cost insurance is a unique coverage improvement for wastewater businesses. I have only seen this coverage emerging for trucks through select insurers catering to the wastewater industry. Because they focus narrowly on vacuum and jetter equipment at this time, they have been able to keep the price of replacement insurance competitive with depreciated cost policies.

Business interruption insurance (loss of income) is now offered for your trucks.

If a vacuum truck is involved in an accident and becomes inoperable or unusable in some manner due to a covered insurance loss, your company can now be eligible for the lost income the vehicle would have generated had it been operating. Normally this type of insurance coverage is only offered for physical business locations. However, several specialized insurance carriers now extend this coverage to service trucks as well. This is also a case of specialty providers focusing on the unique needs of wastewater-related service companies.

Bundling errors and omissions coverage.

Errors and omissions insurance for businesses that design, install and inspect wastewater systems can now be purchased from the same company that insures the rest of your business policies. No longer is it necessary to purchase a separate, stand-alone, expensive errors and omissions policy for the business. Today, discounted bundled rates are available.

Commercial umbrella policies have come down in price.

Commercial umbrella insurance rates for wastewater service providers have dropped over the past few years among select insurance carriers. Many septic or sewer businesses used to only carry an excess liability insurance policy when required by municipal or general construction clients. The added cost (which was significant) was simply a means to getting the work. However, certain insurance carriers have considerably reduced their rates for an extra $1 million, $3 million or $5 million in liability coverage.

This amounts to added coverage above and beyond the underlying $1 million limits a business most likely has on their general liability and commercial auto policies. As a result, more wastewater contractors are now adding umbrella coverage onto their business insurance policies for the extra layer of protection it provides rather than simply because they are required to do so for a particular project or client.

Employment liability has a broadened reach.

The number of lawsuits/insurance claims surrounding wrongful termination, discrimination and sexual harassment is quickly approaching an all-time high. These types of claims are not covered under general liability, workers’ compensation, or errors and omissions insurance policies. Coverage is only found under an employment practices liability policy. These types of policies are rapidly becoming a staple of the insurance portfolio for almost every business, regardless of industry or trade. Even an accusation of misconduct brought against an employer by an employee (past or current), whether it be true or false, can result in thousands of out-of-pocket defense costs without this type of insurance in place.

Cyber criminals now target smaller businesses.

Computer hackers used to be a concern only for large organizations. However, cyber attackers have quickly learned that smaller businesses that accept credit cards are easier and quicker to infiltrate than larger companies with stricter internet security measures in place. As a result, smaller businesses are now targeted by online thieves more often than larger businesses. Cyber insurance can be purchased for as little as $60 per year for $100,000 in coverage. Any business that accepts credit cards should have cyber insurance in place, especially when the added cost can be minimal.

Pay as you go insurance is reality.

The days of having to come up with hefty deposit amounts or down payments to initiate an insurance policy every year are fading away. Many insurers now offer monthly payment plans that require little to no money down to initiate. I cannot tell you the number of wastewater companies that have selected a particular insurance plan for this reason alone. The fixed monthly cost and budgeting advantage has proven to be a true benefit to many wastewater business accounting departments.

BE A SMART INSURANCE SHOPPER

If you don’t have these types of coverage in place, ask your insurance agent about them. In my opinion, it makes little sense to be missing out on these unique coverage protections. When it comes to protecting the golden goose, no business should settle for insurance that only covers the eggs. With all the latest insurance coverage options for wastewater businesses, you should have coverage for the goose, the eggs, and the beanstalk too!