Top 7 High-Growth Industries and Their Unique Insurance Needs

By Christopher J. Boggs, CPCU, ARM, ALCM
Insurance Journal–December 23, 2009

The seven fastest growing industries over the next few years include several in the health care field and each of the seven has a unique insurance need that agents and brokers should address.

According to the U.S. Bureau of Labor Statistics, the seven fastest growing industries between now and 2016 are:

1. Management, Scientific and Technical Consulting Services
2. Individual and Family Services
3. Home Health Care Service
4. Securities, commodity contracts and other financial investments and related activities 
5. Facilities Support Services 
6. Residential Care Facilities
7. Independent Artists, Writers and Performers

Beyond the need for “ordinary” coverages (i.e. property, liability and automobile), each of these industries presents at least one unique coverage or risk management issue to which agents and brokers must pay special attention.

The following includes a description (with NAICS base code) of each industry and the exposures specific to that industry, along with a list of several providers from the membership of the MyNewMarkets.com Web site.

Management, Scientific and Technical Consulting Services (5416)

This industry and its employees provide professional advice and assistance to businesses, municipal entities and governments seeking/needing help and direction in all areas of business or entity management. Scientific and technical consultants provide more specialized expertise. Specialized knowledge, experience and/or training are required of these consultants.

Insurance coverages unique to this class of operation include:

• Professional Liability or Errors & Omissions protection (differs based on consulting specialty)
• Kidnap & Ransom coverage if working internationally
• Employment Practices Liability Insurance policy providing third party protection
• Fiduciary Liability if advising or handling money; and 
• If the employee works from home, one of two specific homeowners’ policy endorsements may be required.

A few of the program providers for the unique exposures as found on MyNewMarkets.com include Venture Insurance Programs Inc. (www.ventureprograms.com); Travis-Pedersen and Associates of Arizona LLC (www.travped.com); USG Insurance Services (www.usgins.com); and Victor O’Schinnerer & Co. Inc. (www.PlanetAEC.com)

Individual and Family Services (6241)

Entities and individuals working in this industry are primarily engaged in providing nonresidential individual and family social assistance services specifically directed toward children, the elderly, persons diagnosed with mental retardation or persons with disabilities. Services include counseling, day care, advocacy and recovery help.

Some insurance and loss exposures agents and brokers should consider are:

• Professional Liability (for counseling and other professional services)
• EPLI with Third Party coverage
• Fiduciary Liability (if helping with finances)
• Coverage for sexual abuse and sexual harassment
• Accident & Health coverage for those being cared for and volunteers; and
• Directors & Officers coverage.

A few program providers for the unique exposures as found on MyNewMarkets.com include Great American Insurance Co. (www.hsd.gaic.com); Irwin Siegel Agency (www.siegelagency.com); Markel Insurance Co. (www.markelinsurance.com); and PGI Commercial (www.pgicom mercial.com)

Home Health Care Service (621610)

Participants in this industry are primarily engaged in providing skilled nursing services in the individual patient’s home offering a range of services including: personal care services; homemaker and companion services; physical therapy; medical social services; medication administration; medical equipment and supplies training; counseling; 24-hour home care; occupation and vocational therapy; dietary and nutritional services; speech therapy; audiology; and high-tech care, such as intravenous therapy.

Insurance and risk management considerations include:

• Medical Malpractice
• Sexual assault and harassment coverage
• Crime/Fiduciary coverage; and
• Workers’ compensation coverage – especially critical if the home health agency pays the health care providers as independent contractors; they may still be employees for workers’ compensation purposes.

A few program providers for the unique exposures as found on MyNewMarkets.com include USX/S (www.usxs.net); K&B Underwriters (www.kbunderwriters.com); Bunker Hill Insurance Agency (www.bhiainc.com); and Tapco Underwriters (www.gotapco.com).

Securities, Commodity Contracts, Other Financial Investments and Related Activities (523)

This classification engages a plethora of financial service professionals from investment bankers to commodities brokers and trust officers and portfolio managers. The economic downturn is not permanent, so this will likely be a growth profession again soon.

Special insurance coverages that should be explored include:

• Professional Liability and
• Fiduciary Liability/Dishonesty Bonds 

A few program providers for the unique exposures as found on MyNewMarkets.com include Fox Point Programs (www.foxpointprg.com); Navigators Pro (www.managementliability.com); Cambridge Alliance LLC (www.cambridgealliance.com) and Boston Insurance Brokerage (www.bostonbrokerage.com).

Facilities Support Services (561210)

This industry is primarily engaged in providing a combination of support services within a client’s facilities such as janitorial; maintenance; trash disposal; guard and security; mail routing; reception; laundry; and other related services that support the operations of the client’s facilities. Establishments that operate correctional facilities (i.e. jails) on a contract or fee basis are included in this industry class.

Special insurance considerations include:

• Fiduciary Liability/Dishonesty Bonds
• Professional Liability (i.e. Law Enforcement Liability for guard services); and Bailee’s coverage.

A few program providers for the unique exposures as found on MyNewMarkets.com Quaker Special Risk (New Jersey) (www.quakerspecialrisk.com; All Risks Ltd (www.allrisks.com); The Mechanic Group (www.mechanicgroup.com) and Towerstone Inc. (www.towerstonecorp.com)

Residential Care Facilities (6232, 6233, 6239)

A wide range of operations is anticipated by this particular classification. Establishments and employees engaged in this industry primarily provide residential care and personal care services to facility-housed patients who suffer from mental retardation; require on-going medical care; suffer from a mental health issue; or provide group living for the elderly that do not require continuous medical treatment (retirement home).  Also included in this broad classification are employees of children’s homes, “boot camp” facilities, half-way homes and orphanages.

Like some of the previous classifications, insurance coverages that may need to be considered include:

• Professional Liability (for medical, counseling or other professional services)
• EPLI with Third Party coverage
• Fiduciary Liability (if helping with finances)
• Coverage for sexual abuse and sexual harassment
• Accident & Health coverage for those being cared for and volunteers; and
• Directors & Officers coverage

A few program providers for the unique exposures as found on MyNewMarkets.com include James River Insurance Co. (www.jamesriverins.com) and Founders Professional (www.founderspro.com). Providers listed under Individual and Family Services and Home Health Care Service also provide programs for this industry class.

Independent Artists, Writers and Performers (711510) 

Independent-minded individuals primarily engaged in performing in artistic productions, creating artistic and cultural works or productions or in providing technical expertise necessary for these productions are the symbols of this industry class. This classification also includes athletes and other celebrities exclusively engaged in endorsing products and making speeches or public appearances for which they receive a fee.

A few of the unique insurance issues faced by these free spirits includes:

• Workers’ Compensation coverage (a majority are self-employed and need the protection)
• Media Professional Liability protection
• Inland Marine when works on display; and
• Disability Income coverage

A few of the program providers for the unique exposures as found on MyNewMarkets.com include ARC West Coast Excess & Surplus Brokerage LLC (www.arcbrokers.com); Euclid Managers LLC (www.euclidmanagerskc.com) and AmWINS Brokerage of New York (www.amwins.com).

Boggs is associate editor of MyNewMarkets.com. He may be contacted at cboggs@mynewmarkets.com.