Field Service Technician Insurance – Cost and Types of Policies
Field service technicians, also frequently referred to as field service engineers, are the core workers in customer support for every sector of the economy and in this role, they have to make sure that they are working protected by good field service technician insurance because of the risks that such essential work brings with it.
While the different scopes, areas and levels of engagement for the wide range of varying field service activities makes it difficult to produce a single comprehensive guide to how much insurance you need for your own field service engineering business, it has been possible for us to make some rough estimates that are based on past experience across the whole sector.
In this way, it has been possible to separate the different types of businesses into three broad categories.
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In that way, we can suggest some general guidelines that will help you find the proper insurance levels and get a good idea of the expected costs.
Of course, every business is different, and you should take the following figures purely as general estimates.
It is always sensible for you to consider your own specific business knowledge and experience.
As well, talk to experts in insurance, such as insurance brokers and agents.
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In addition, thoroughly follow the great leads offered by the internet, where you can get all the information you need, as well as direct quotes.
What are the main areas of activity in which field service technicians need insurance protection?
General Liability insurance is needed to protect you in case a claim is made of damage or personal injury to a third party (which is any person not directly connected to the work you were doing)
Such a claim of negligent services can be made if any mistake in your work, or failure to perform the work, cause financial loss to the customer,
Income Protection insurance covers you if you are unable to work due to circumstances outside of your control, such as prolonged weather conditions and natural disasters.
In this case, you may still have ongoing business expenses that need to be paid, as well as your own income.
Workers Compensation Insurance is a government requirement if you employ several full-time, part-time or casual workers.
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The rules and costs vary in each state.
We explain more about these types of insurance after the table of levels and costs.
How much should you expect to pay for field service technician business insurance?
Some features of your business affect the costs of the cover.
Local insurance brokers and agents can pro, do some research on the internet and then commit to a policy.
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There are three main groupings of the levels of risk that field service engineers should be protecting.
They are based on the associated level of liabilities, the general level of investment in specialized equipment, inventory and tools, and the level of danger involved.
We explain more about these groupings below the table of levels and costs.
|Subject||Level of cover||Likely average cost per year|
|General liability||$1 million per year, maximum $500,000 single claim||$800 – $1150|
|Professional liability / E & O||$50,000 full year, $25,000 single claim||$650 – $900|
|Product liability||$1 million||$550 – $1200|
|Inventory||Based on value per $10,000||$125 – $345|
|Equipment||Based on value per $10,000 value||$120 – $175|
|Vehicle||Based on value||$1200 – $3000|
|General liability||$2 million per year, maximum $1 million single claim||$500 – $750|
|Professional liability / E & O||$100,000 full year, $50,000 single claim||$650 – $900|
|Product liability||$2 million||$750 – $1600|
|Inventory||Based on value per $20,000||$175 – $400|
|Equipment||Based on value per $20,000||$175 – $250|
|Vehicle||Based on value||$1200 – $3000|
|General liability||$5 million per year, maximum $1 million single claim||$1500 – $2250|
|Professional liability / E & O||$500,000 full year, $100,000 single claim||$950 – $1300|
|Product liability||$10 million||$1550 – $2200|
|Inventory||Based on value per $50,000||$225 – $450|
|Equipment||Based on value per $50,000||$400 – $650|
|Vehicle||Based on value||$1200 – $3000|
Some other specific factors like level of qualification, licensing and experience in the specific field, your claims history in the past, and many other factors will affect your insurance costs.
The estimates above are based on our knowledge of other businesses that run with risks similar to yours, such as Painters, Electricians, Handyman, Roofing repairs, Solar panel installers, Plumbers, and Glaziers.
Low exposure generally means that the field service technician works in an office or home environment, which means the chances of an accident are lower.
As well, the equipment being serviced of generally lower value or less complex.
Of course, this must be treated as a very general categorization.
You will be able to judge best whether your own business fits into this or the other groups we have produced.
A few typical examples are:
- Copier field service technicians (including specialties like Canon field service engineer, printer field service technician, Olympus field service technician, Ricoh field service technician) are called into offices to repair or install equipment. The environment is safe, the level of product liability is restricted to the total value of the equipment being serviced. It is usually lower than the amount provided for a single claim.
- Medical equipment field service engineer (which includes work like biomedical field service technician, dental field service technician, Ecolab field service technician, medical field service technician, Healthtronics field service technician, GE healthcare field service engineer) working in small clinics and hospitals, which are clean, quiet and safe environments, with medium levels of value of the equipment being serviced.
- Field service electronics technicians (such as Compucom field service technician, Dell field service technician or Dell field service engineer, Philips field service engineers, IT field services technician, Verizon field service technician, general telecommunications field service technician or Toshiba field service technician) are called out to offices to install or repair equipment. Their exposure to general liability is restricted, and product liability is capped, allowing for more claims to be lodged each year by the lower value of the type of equipment.
Level 2 – Medium level
Field service technicians working in more dangerous sectors, such as outdoors or in difficult areas, are more liable to incur claims for liabilities.
As well, engineers working on high-value products are more subject to claims of professional mistakes, and that also need to carry higher inventories of parts
A partial list of the sorts of field service work that falls under this category is:
- Field service technicians working on costly or more complex machines (for example, Pepsi field service technician, Coca Cola field service technician, Eaton field service technician, Evoqua field service technician
- Field service engineers working on mobiles including Ziegler cat field service and Holt cat field service technician, Crown forklift field service technician, Kia field service technician, Tesla residential field service technician, Cbe field service technician, forklift field service technician
- Field service engineers in agriculture, where risks are greater because of the environment (such as poultry field service technicians)
- Field service technicians working on top-end and higher-value electronic and computer devices (for example, IGT field service technician, Lumenis field service technician, Ncr field service technician)
Field service engineers working in heavy industry, advanced high-tech sectors, petrochemicals, electricity generation and distribution, and other specialized fields have the most significant exposure to risk.
They need more insurance than engineers involved in other sectors.
Example: oil and gas field service technicians contend with risks inherent to the services they are required to give.
Some examples are:
- Hydraulic fracturing (including casing installation, rig erecting and dismantling
- Pumping and gauging
- Tank construction, repair and installation
- Welding or cutting
- Well cleaning and shooting
A partial list of the sorts of field service work that falls under this category includes
- Field service engineers working on high-voltage electrical generators and power lines. These involve very high levels of risk coming from general liability for accidental injury and damage, as well as very high E&O exposure due to the possibility of widespread losses in case of power disruptions. Examples include electrical field service technician, GE field service technician, generator field service technician, GEA field service technician, Honeywell field service technician, Siemens field service technician, Cummins field service technician, Haas CNC field service technician, Inductotherm field service technician, Komatsu field service technician, GE field service engineer, Ingersoll Rand field service technician,
- Mining industry field service engineers who have to work in exposed sites, such as GE MRI field service engineers
- Field service technicians involved with fuel and diesel products, where dangerous fumes and spills can cause substantial damages to third-parties, requiring very high levels of liability cover. Examples include diesel field service technicians, Enersys field service technicians, Flowserve field service technicians, industrial field service technicians, Opex field service technicians, oil field service technicians, offshore field service technicians, petroleum field service technicians)
Why you need liability insurance to run your field service technician business
When working on a contract or project, if anything goes wrong, you need to be adequately covered by insurance to prevent you from having to pay personally in case you are sued.
Such possible outcomes mean that as a business, you have to protect yourself, especially in the field of liability insurance.
There are three categories of liabilities in any business operation:
- General Liability
- Errors and Omissions (E&O)
- Product liability.
General Liability insurance gives you protection in case any accident in your place of work, like the customer’s home or workplace, causes some damage to their property or some injury to a person other than yourself.
For example, suppose someone (a customer, staff member or family member) trips and falls trying to navigate around something you took down onto the floor to work on.
In that case, you could be sued for the resulting injuries and damages.
Another possibility is that your high-power worktools caused some damage to the walls, or furniture during your work in an office or home.
An example is a high-speed saw disintegrating if it cuts across a hidden hardened-steel bar.
The flying bits injure a person in the location or smash into walls and devices, causing substantial damage.
In such a case, you could be held responsible for the consequential losses and could have to pay for the damages as well as legal costs.
Errors & Omissions insurance is essential for field service technicians because your customers are depending and relying on you to perform services professionally and correctly and with due care.
A customer could make a claim that you performed your services without proper attention, due care or the required levels of skill, or that you failed to respond when called, or the service was not what you were engaged to do. In any instance, when this turns into a lawsuit, you have to defend your business and your reputation, and the cost of defense can be substantial.
Even if you win in the end, you have to finance the whole process yourself. You could end up having to foot the bill for all or part of your legal services.
Product Liability insurance is necessary whenever your business supplies your customers with spare and replacement parts.
Other insurances needed
On top of the three sorts of liability insurance mentioned above, you need to protect any assets involved in regular business activity, along with your workers.
These needs are similar to all other types of business.
For them, you should take out the specific types of insurance like:
Equipment you use in your field service business is likely to be highly specialized, which means its replacement cost is high.
You also need to have these on hand at all times.
In any case, where they are stolen or lost, you need good equipment insurance to file a claim and immediately go out buying knowing that the insurance company will reimburse you within days.
Commercial vehicle insurance means that if you own or lease a truck or van, the vehicle’s replacement cost and its contents can amount to many thousands of dollars.
As well, you won’t be able to secure a loan from a finance company until you have signed up for full comprehensive insurance.
If you are storing have high levels of parts or stock of hazardous materials, you should consider taking out cover.
Usually, this forms part of a Commercial insurance package, which covers buildings, land and stock.
Still, since most field service engineers are mobile and don’t have base stations, you may need to find a specialized insurance policy that will give you the cover you need for inventory.
Suppose your business does have commercial insurance for property.
In that case, it is possible you could get a Business Owners Policy (BOP) insurance policy, bundling commercial property, inventory and general liability under a single cover, which is generally cheaper than the individual coverages.
Worker compensation insurance
Workers compensation insurance for businesses that employ more than a specified number of full time, part-time, casual or sub-contractor workers is a legal requirement in most states.
The individual state regulations set the rates charged for the cover, protecting you from the consequences of any injuries or illnesses resulting from work-related events.