Essential Business Insurance Options for Performing Arts Companies with NAICS Code 7111

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A guide to top business insurance types performing arts companies with NAICS Code 7111 should consider like general liability, property, workers' comp, and more.

Key Takeaways

  • General liability insurance protects against third party claims from injuries during shows.
  • Property insurance covers losses from fire, theft or damage to instruments and equipment.
  • Workers’ compensation provides wage replacement and medical care if employees are injured.
  • Equipment insurance replaces valuable gear if it’s stolen or damaged.
  • Business interruption funding pays expenses if unexpected closures disrupt operations.

Introduction

Businesses in the performing arts industry face unique risks that require tailored insurance protections. As a performing arts company with NAICS Code 7111, it’s important to understand the types of coverage available to safeguard your operations and finances.

General Liability Insurance

General liability insurance provides protection for performing arts companies in case of incidents during shows and events that could result in bodily injury, property damage, or other legal claims from third parties. It helps cover lawsuit expenses and settlements in these situations.

The top benefits of general liability insurance for performing arts companies include protecting against third party claims of bodily injury or property damage during performances. It also covers legal fees and costs if claims are filed, and provides liability protection if intellectual property is infringed upon. Maintaining general liability insurance is important for performing arts businesses to safeguard against costly lawsuits.

Category List
Benefits
  • Protects against third party claims of bodily injury or property damage
  • Covers legal fees and lawsuit costs if a claim is filed against your business
  • Provides coverage if someone is injured during a performance or event
  • Protects your business assets if you are sued for negligence or errors and omissions
  • Covers claims that may arise from contractual liabilities or agreements with other parties like venues
  • Provides liability protection if a client’s intellectual property is infringed upon in some way
  • Covers liability that may arise from employment practices like discrimination or harassment claims
  • Covers contractual liabilities or agreements with other parties like venues
  • Provides liability protection if a client’s intellectual property is infringed upon in some way
Use Cases
  • Bodily injury or property damage caused by performers or staff
  • Injuries or accidents that happen to audience members
  • Damage or loss of props, costumes, or equipment
  • Legal claims from canceled or postponed shows
  • Legally liable claims of slander, libel, or copyright infringement
  • Security and crime-related incidents at venues or during events

Based on industry data, the average general liability insurance pricing for performing arts companies with NAICS code 7111 is around $2,000 – $3,000 per year. This pricing is derived based on factors such as number of employees, gross revenues, types of performances/shows, and claims/loss history. The average performing arts company in this industry has 10-50 employees and $500,000 – $5M in annual gross revenues.

Estimated Pricing: $2,500/year

Property Insurance

“Property insurance provides important protection for performing arts companies by covering potential losses and damages to valuable equipment, property and assets essential to their operations. It also helps them deal with financial impacts if there are disruptions to business activities. Common types of coverage include protection against accidental damage, fire, floods, theft, vandalism, and liability claims. Estimated pricing is around $2.50 per $100 of insured assets.”

Category List
Benefits
  • Covers losses from accidental damage or destruction of property and equipment
  • Covers losses from fire or natural disasters like flooding, hurricanes, etc.
  • Replaces property after theft or vandalism incidents
  • Covers additional expenses if property is temporarily unusable after an accident or disaster
  • Provides compensation for business interruption losses if operations are disrupted
  • Covers liability claims if faulty equipment causes injury or damage
  • Allows for replacement of property after partial losses at depreciated value
  • Deductibles can help keep premiums affordable
Use Cases
  • Protection against damage or loss to valuable musical instruments
  • Protection against damage or loss to sets, costumes, props, audio/visual equipment
  • Protection against damage or loss to facility from events like fire, water damage, theft

Based on industry averages, property insurance for performing arts companies with NAICS code 7111 would be approximately $2.50 per $100 of insured assets. This price is derived from analyzing typical property values and risks for theaters, dance companies, musical groups and other performing arts businesses. Higher property values or greater risks may increase the price.

Estimated Pricing: $2.50/$100 of insured assets

Equipment Insurance

The performance arts industry relies heavily on expensive equipment to put on shows. Having proper insurance can help protect this valuable equipment against losses like theft, damage or accidents so performances are not disrupted.

Some key benefits of equipment insurance for performing arts businesses include protecting expensive instruments, covering replacement costs, and providing reimbursement for lost income if equipment is damaged and shows cannot go on as scheduled. Common types of equipment covered include musical instruments, audio/visual equipment, costumes, electronics, and items used for productions, tours and performances. Pricing typically runs from 1-3% of total insured equipment value per year.

Category List
Benefits
  • Protect against theft or damage to expensive instruments and equipment
  • Cover replacement costs to maintain business operations
  • Peace of mind knowing equipment is insured in case of an accidents or disasters
  • Coverage for equipment used during productions, performances or tours
  • Reimburse lost income if equipment is damaged and unable to perform
  • Coverage for equipment used during productions, performances or tours
  • Reimburse lost income if equipment is damaged and unable to perform
Use Cases
  • Cover expensive production equipment like cameras, lighting equipment, musical instruments against theft, damage or loss
  • Cover electronics equipment like soundboards, mixing boards, DAW systems against damages from accidents, water damage or power surges
  • Cover costume and set items against damage or loss when transporting to and from productions
  • Replace or repair equipment after damage or theft so shows can continue as scheduled
  • Cover equipment used for tours and traveling productions against risks while on the road

Based on industry averages, equipment insurance for performing arts companies with NAICS code 7111 typically costs between 1-3% of the total value of insured equipment per year. For a company with $500,000 worth of equipment, the estimated annual pricing would be $5,000-$15,000.

Estimated Pricing: $5,000-$15,000

Workers’ Compensation Insurance

Workers’ compensation insurance is an important protection for businesses in the performing arts industry. It covers costs if employees are injured on the job and ensures they receive support for medical care, lost wages and getting back to work. This type of insurance is particularly useful for performing arts companies due to the physical nature of rehearsals, performances and specialized materials/equipment that can increase injury risks. On average, workers’ comp insurance rates for businesses in this industry are estimated to be $2.50 per $100 of payroll.

Category List
Benefits
  • Covers medical expenses if an employee gets injured on the job
  • Pays partial wages if an employee cannot work due to a work-related injury or illness
  • Protects the company from lawsuits if an employee gets injured on the job
  • Covers rehabilitation costs such as physical therapy if needed for an injury
  • Provides return-to-work programs and vocational assistance to help injured employees transition back to work
  • Complies with state laws requiring businesses to carry workers’ comp insurance
Use Cases
  • Injury from accidents during rehearsals or performances
  • Illness or injury from overuse or repetitive motions
  • Injury from lifting or moving heavy equipment
  • Injury due to slip and falls
  • Injury or illness due to theatrical makeup and costumes
  • Injury or illness due to exposure to chemicals/materials in theatrical sets and productions

Based on industry data, the average workers’ compensation insurance rate for performing arts companies with NAICS code 7111 is approximately $2.50 per $100 of payroll. This rate is derived based on risk classifications and loss histories specific to this industry sector which includes theaters, dance companies, musical groups, and independent artists. Higher rates may apply for companies with more hazardous operations or injury histories.

Estimated Pricing: $2.50 per $100 of payroll

Directors And Officers Insurance

According to the reference provided, Directors and Officers (D&O) insurance provides essential liability protection for leadership roles within performing arts companies by covering legal costs and damages from lawsuits against directors and officers related to their roles and duties. It mitigates the risks directors and officers face when making business decisions that could potentially put the company or themselves at legal risk.

The reference also outlines some of the top benefits of D&O insurance like protecting personal assets, attracting qualified board members, and reimbursing defense costs for unsuccessful claims. It provides examples of common use cases like defending shareholder lawsuits and covering claims from investigations. Finally, it estimates the average annual pricing is $5,000-7,500 for small to mid-sized performing arts companies with revenues between $2-10 million.

Category List
Benefits
  • Protects directors and officers from personal liability in the event of a lawsuit against the company
  • Covers legal defense costs if a lawsuit is filed against directors and officers
  • Covers settlement costs or judgment amounts if a lawsuit succeeds in proving liability
  • Protects the personal assets of directors and officers like homes, bank accounts, and investments
  • Attracts qualified directors and officers to serve on the board by providing strong liability protection
  • Reimburses defense costs even if the allegations turn out to be groundless, as long as the directors/officers acted in good faith
Use Cases
  • Defense against shareholder derivative lawsuits
  • Reimbursement of legal fees for defense in regulatory proceedings
  • Indemnification of personal losses from claims made against directors and officers for wrongful acts
  • Coverage for claims related to civil suits, criminal charges, administrative or regulatory investigations or proceedings arising from wrongful acts

Based on research, the average pricing for Directors And Officers Insurance for small to mid-size performing arts companies with revenues between $2-10 million and NAICS Code 7111 is around $5,000-7,500 annually. The pricing is usually calculated based on factors such as the company’s revenues, number of employees/directors, types of risks involved, any prior claims, and insurance limits required.

Estimated Pricing: $5,000-7,500

Business Interruption Insurance

Business interruption insurance provides critical financial protection for performing arts companies and organizations in case their operations are impacted by events outside of their control like natural disasters, power outages, disease outbreaks or property damage. It helps ensure they have the resources to survive a temporary closure and reopen once the disruption has passed.

Business interruption insurance can help cover lost profits, ongoing business expenses, and extra costs associated with rescheduling events during periods where operations have been interrupted. It provides funding to pay things like salaries, rents, taxes, and other operating costs. This protects the financial viability of performing arts businesses during unexpected disruptions to their normal activities and performances.

Category List
Benefits
  • Covers loss of income if the business must shut down due to property damage
  • Provides funds to pay operating expenses like payroll, taxes and rent if the business is forced to temporarily close
  • Covers additional expenses needed to continue operations from an alternative location
  • Covers loss of income from dependent business interruption if a supplier’s property is damaged
  • Replaces lost ticket sales, box office revenue or fees if performances must be cancelled or postponed due to a covered event
  • Covers extra marketing/advertising costs needed to promote rescheduled performances after an interruption
  • Provides funds to pay actors, performers and contractors if their services are no longer needed during a temporary shutdown
  • Protects against lost revenue from cancelled multi-show engagements, tours or festival appearances
  • Covers increased costs for things like venue rental if performances must be rescheduled to alternative dates
  • Helps maintain cash flow so payroll and other critical operating expenses can continue to be paid during downtime
  • Indemnifies against lost tuition, class or camp fees if programs must be cancelled or postponed
  • Covers loss of income from cancelled fundraising events, sponsorships or donations relied on as part of the annual budget
  • Ensures scholarships, grants or subsidies provided to students can still be honored if classes are temporarily suspended
Use Cases
  • Loss of income if performances are canceled due to weather events like hurricanes, blizzards, etc.
  • Loss of income if performances are canceled due to location damage from events like fires, floods, earthquakes
  • Loss of income if performances are canceled due to an outbreak like COVID-19 pandemic
  • Loss of income if key personnel like lead actors, musicians, etc. are unavailable due to injury or illness
  • Loss of income during construction/renovations if venue is temporarily closed for repairs or upgrades

Business interruption insurance for businesses in the performing arts industry typically costs between 1-3% of gross annual revenues with a waiting period of 30 days. This pricing is estimated based on the high risk of cancellation or postponement of performances due to various factors like weather, disease outbreaks, or other unexpected events. The average gross annual revenue for a mid-size performing arts company is around $5 million. Therefore, the estimated annual premium would be $50,000 – $150,000.

Estimated Pricing: $50,000 – $150,000

Conclusion

By consulting insurance professionals and considering this overview of common options, you can make informed decisions about building a comprehensive risk management plan tailored to your company’s needs and exposures in the performing arts industry.

Frequently Asked Questions

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