Increasingly stringent zoning rules may be costing tower companies, but they also are bringing new business to other industries not necessarily yet associated with the world of wireless.
Zoning laws, for example, are making tower insurance a required cost for tower owners and creating a new stream of business for insurance companies.
Atlantic Risk Management Corp., which assists companies in securing insurance coverage, has found a niche in the tower market. Atlantic Risk’s goal, according to its mission statement is “to provide maximum protection against financial risk for businesses and their owners by delivering and servicing superior insurance, surety and benefits coverage at a reasonable cost while maintaining the highest ethical standards.”
The company, which typically focused on the construction business, expanded to include a division dedicated to wireless tower owners. The company’s tower insurance program has taken off since it was endorsed in early 2002 by tower industry association PCIA, according to David Saul, the group’s vice president. The group also offers insurance to rural-based two-way radio providers.
Interestingly, finding an insurance provider is not an easy task for a tower company. In the eyes of the insurance industry, the wireless tower sector is a small universe, said Saul, and most agents and insurance companies don’t see potential for a steady flow of business or profitable returns. But that leaves the market wide open for companies like Atlantic Risk that specialize in the tower sector.
Atlantic Risk works mainly with mid- to small-sized tower companies and currently has more than 100 clients. The company offers insurance through two major nationwide providers and also brokers business through agents.
Atlantic Risk typically provides tower companies with general liability coverage and coverage for the tower structure itself. Liability coverage insures damage from external forces like adverse weather and fire. The company does not provide coverage for tower site workers, which is usually provided by the subcontractor providing the workers to the tower owner, according to Saul.
Large tower companies do not necessarily insure all of their towers because the cost to rebuild a damaged tower would not be as detrimental to its bottom line as it could be to a smaller company, Saul said. However, increasingly stringent zoning requirements may change that, and Saul said Atlantic Risk has been in talks with some large companies for certain sites.
In addition to requiring insurance for tower structures, a growing trend in zoning is to also require tower removal bonds. According to Saul, it has become increasingly common for municipalities to require a tower company to purchase bonds to guarantee there is money to take down a tower if the company goes out of business. Atlantic Risk assists tower companies in securing those bonds, which are not easy to come by as they are viewed as a financial guarantee of the company’s viability.
