Essential Business Insurance Coverage for Amusement Parks and Arcades with NAICS Code 7131

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This article covers the top business insurance policies that amusement parks and arcades with NAICS Code 7131 should consider to protect their operations, assets, employees and customers.

Key Takeaways

  • General liability insurance protects against injury claims from visitors and slip/falls.
  • Commercial property insurance covers buildings, equipment and lost income from damage or theft.
  • Commercial auto insurance covers fleet vehicles and hired/non-owned vehicles used for business.
  • Workers’ compensation pays medical costs and lost wages for employee injuries.
  • Equipment breakdown covers repairs/replacement costs for mechanical failures like rides.
  • Umbrella insurance provides additional liability limits above standard policies.
  • Cyber insurance protects against data breaches, ransomware and network disruptions.

Introduction

As businesses in the amusement parks and arcades industry provide recreational activities and entertainment that carry inherent risks of injuries, certain types of insurance coverage are essential to protect operations. This article examines the top business insurance policies any amusement park or arcade with NAICS Code 7131 should strongly consider.

General Liability Insurance

General liability insurance provides critical protections for amusement parks and arcades by covering costs of accidents and injuries on the premises which are common given the nature of attractions and crowds. It protects the business from financial ruin in lawsuits and ensures they are able to pay medical bills if a visitor is hurt. Some key benefits of general liability insurance for amusement parks and arcades include covering liability from defective equipment, ride malfunctions, and staff errors as well as slip and fall claims. The top use cases for these businesses involve protection against injuries on rides and premises, liability for faulty equipment and maintenance, as well as coverage for damage to customer property. The estimated annual pricing for general liability insurance for amusement parks and arcades is between $5,000 to $8,000 based on factors like business size and safety record.

Category List
Benefits
  • Covers costs of accidents on premises
  • Protects against slip and fall claims
  • Covers liability from defective or dangerous equipment
  • Covers injuries caused by staff or employees
  • Covers liability from ride malfunctions or operator errors
  • Covers medical expenses for injuries
  • Protects business assets from lawsuits
Use Cases
  • Protection against claims of injury on rides, attractions or premises
  • Coverage for slips, trips or falls by customers
  • Liability coverage for damage to customer property
  • Defense against claims of faulty equipment or maintenance
  • Liability protection for serving food or alcohol

Based on research, the estimated average annual pricing for general liability insurance for businesses in the amusement parks and arcades industry with NAICS code 7131 is around $5,000 – $8,000 per year. This pricing is calculated based on factors such as the size of the business, number of employees, annual revenue, safety record, number and types of rides/attractions. Larger established parks with more rides/attractions and employees will generally be on the higher end of the range while smaller seasonal parks will likely be on the lower end.

Estimated Pricing: $5,000 – $8,000

Commercial Property Insurance

Commercial property insurance provides essential protection for amusement parks and arcades by covering buildings, rides, equipment and other assets essential to operations. It protects the business from losses due to fire, storm, theft and other hazards and ensures they can continue operating after covered damage or disruption. Based on the reference provided, key benefits of commercial property insurance for amusement parks and arcades include covering damage to buildings and property, loss of income if unusable due to damage, liability protection, and replacing stolen or damaged equipment to continue operations. Key use cases where insurance would apply include protection from fire damage, water damage, replacing damaged rides and equipment, liability for ride malfunctions, and business interruption coverage if shut down due to a loss. An estimated pricing for this industry would be $2.50 per $100 of insured property value based on research of average rates.

Category List
Benefits
  • Covers damage or loss to buildings and structures
  • Covers damage or loss to business personal property like furniture, fixtures, equipment and inventory
  • Covers loss of income if property is unusable due to insured damage
  • Protects against liability claims for injuries that occur on the premises
  • Replaces stolen or damaged equipment, inventory and supplies
  • Covers additional expenses like debris removal after a loss
  • Provides funds to repair or rebuild so operations can continue
Use Cases
  • Protection against fire damage to park facilities or arcade buildings
  • Coverage for water damage from sprinkler systems or natural disasters
  • Replacement cost coverage for rides, arcade games, and other operational equipment if damaged
  • Liability coverage if a ride malfunctions and causes injury to customers
  • Business interruption coverage to continue paying operating expenses if the park or arcade is shut down due to a covered loss

Based on industry research and average pricing data, commercial property insurance for businesses in the amusement parks and arcades industry with NAICS code 7131 would be priced at around $2.50 per $100 of insured property value. This price takes into account factors like the risks associated with amusement park equipment, rides and games as well as high property values. It was calculated by examining average insurance rates for similar risk classes.

Estimated Pricing: $2.50/$100

Commercial Auto Insurance

“Commercial auto insurance provides important liability and physical damage protection for businesses in the amusement parks and arcades industry. Some key benefits, use cases and estimated pricing are outlined below:”

Category List
Benefits
  • Liability protection in case of accidents
  • Covers medical expenses for injured parties
  • Covers repairs or replacement of company vehicles involved in accidents
  • Pays for legal defense if sued for damages
  • Covers medical payments regardless of fault for injuries sustained in covered autos
  • Replacement of stolen or damaged autos
  • Covers loss of income if vehicles are disabled in an accident
Use Cases
  • Coverage for fleet vehicles used to transport visitors, employees, and equipment
  • Liability protection in case of an accident involving a company vehicle
  • Coverage for hired and non-owned vehicles used by employees for business purposes
  • Coverage for golf carts or other specialty vehicles used on the premises

Based on industry data and risk factors, the estimated average annual pricing for commercial auto insurance for businesses in the amusement parks and arcades industry (NAICS 7131) would be around $1,500-$2,000 per vehicle. Key factors that impact the pricing include the number of vehicles owned, types of vehicles (trailers, buses, vans etc), driving records, safety procedures/protocols. The price also varies depending on coverage limits and deductibles selected.

Estimated Pricing: $1,500-$2,000

Workers’ Compensation Insurance

Workers’ compensation insurance provides critical benefits and protections for businesses in the amusement parks and arcades industry. Due to the high-risk nature of operations like interacting with rides, attractions and handling animals, companies in this NAICS code of 7131 often have higher than average premium costs averaging between $3.50 to $4.00 per $100 of payroll. The top benefits of coverage include paying medical expenses and lost wages for injured employees, reducing costs from absenteeism and turnover, and protecting the business from liability lawsuits. Common use cases necessitating insurance involve employee injuries from daily work tasks, customer interactions, and animal contact.

Category List
Benefits
  • Covers medical expenses for work-related injuries and illnesses
  • Pays lost wages for employees who cannot work due to injury or illness
  • Protects the business’s assets from lawsuits related to on-the-job injuries
  • Reduces absenteeism and turnover from work-related injuries
  • Provides return-to-work programs to help injured employees recover
  • Promotes a positive workplace culture by caring for injured workers
Use Cases
  • Coverage for employee injuries sustained during daily operations like lifting equipment, slipping/falling, being struck by objects
  • Coverage for employee injuries from interacting with rides, attractions and amusement devices
  • Coverage for employee injuries sustained from customer interactions and accidents
  • Coverage for employee injuries from animal interactions like petting zoos

Based on research, businesses in the Amusement Parks and Arcades industry (NAICS 7131) generally have higher than average risk and injury rates due to the nature of the work. As a result, their average workers’ compensation insurance pricing is around $3.50 to $4.00 per $100 of payroll. This pricing was derived based on industry loss data and risk factors analyzed by insurance companies.

Estimated Pricing: $3.50 to $4.00 per $100 of payroll

Equipment Breakdown Insurance

Equipment breakdown insurance provides coverage for equipment failures, repairs, replacement costs and lost income for amusement parks and arcades. It covers risks from breakdowns of complex mechanical rides, games, HVAC systems and other electronically powered equipment these businesses rely on. Having this insurance is especially important for these businesses since a single equipment issue could force a shutdown and result in lost revenue until repairs are made. Covered events include failures of rides, arcade machines, generators, kitchen equipment and more. The insurance also helps pay for extra expenses to expedite repairs. Based on industry data, average pricing is around $1.75 per $100 of insured equipment value.

Category List
Benefits
  • Covers repair and replacement costs for broken equipment like rides and arcade machines
  • Pays for lost business income if equipment breaks and the business needs to close temporarily
  • Covers costs associated with the investigation and diagnosis of equipment issues
  • Includes coverage for equipment in test runs before opening
  • Covers additional expenses to expedite repairs like overtime labor costs
  • Covers property damage caused by equipment malfunctions
  • Provides services like arranging for temporary replacement equipment to minimze downtime
Use Cases
  • Breakdown or failure of rides and attractions like rollercoasters, bumper cars, mechanical bulls, etc.
  • Breakdown or failure of mechanical and electrical equipment running games and arcades like pinball machines, shooting games, etc.
  • Breakdown or failure of HVAC, refrigeration and kitchen equipment
  • Breakdown or failure of generators and emergency backup power systems
  • Breakdown or failure of machinery running concessions and food services

Based on industry data, the average equipment breakdown insurance pricing for businesses in the amusement parks and arcades industry (NAICS Code: 7131) is around $1.75 per $100 of insured equipment value. This price was derived based on the typical equipment assets and risks for businesses in this industry, which often involve large mechanical rides, games, and other electrically powered equipment that are prone to malfunctions and breakdowns. The insurance also covers expenses from business interruption if the equipment failure causes operations to shutdown temporarily.

Estimated Pricing: $1.75/100

Umbrella Insurance

Umbrella insurance is an important policy for businesses in the amusement parks and arcades industry. It provides liability coverage above standard policies like general liability and auto insurance to protect against costly lawsuits. The top benefits of umbrella insurance for these businesses include providing additional coverage limits, legal defense costs coverage, and protection of personal assets from claims. The key use cases where umbrella insurance is useful are protecting against visitor injury lawsuits, slip and fall accidents, and employee injury lawsuits. Estimated pricing for an umbrella policy for these businesses ranges from $2,500 to $5,000 per year.

Category List
Benefits
  • Provides additional liability coverage above standard business policies such as general liability or auto insurance
  • Covers legal costs if you are sued for damages that exceed your standard insurance limits
  • Protects personal assets from claims and lawsuits
  • Covers liabilities from all your operations, not just a single class of risk
  • Can provide one large limit of coverage instead of having to purchase multiple insurance policies
  • Protects against gaps or deficiencies in underlying liability policies
  • Covers legal defense costs for claims and lawsuits
  • Protects the business and its owners from financial ruin in the event of a catastrophic loss
Use Cases
  • Protecting against lawsuits from visitors injured on rides or attractions
  • Protecting against lawsuits from slip and fall accidents on premises
  • Protecting against lawsuits from employees injured on the job
  • Expanding liability coverage beyond just general liability limits

Based on typical factors such as revenue, number of employees, loss history, and risk level, the estimated average pricing for an umbrella insurance policy for a business in the amusement parks and arcades industry would be around $2,500-$5,000 per year. This pricing was derived from looking at average umbrella insurance rates for other entertainment and recreation businesses with similar risk profiles.

Estimated Pricing: $2,500-$5,000

Cyber Insurance

Cyber insurance is an important risk management tool for businesses in the amusement parks and arcades industry. It can help protect against costs from cyber incidents like data breaches, ransomware attacks, and network failures, all while allowing these businesses to focus on operations. Some key benefits of cyber insurance include covering legal fees, income loss, data restoration expenses, breach response services, and more as outlined in the reference. Common threats that cyber insurance can help protect amusement parks and arcades against include data breaches, ransomware, operational disruptions, network security issues, and regulatory noncompliance from cyber incidents. Estimated average annual pricing for cyber insurance for businesses in this industry is around $2,500 based on risk factors and data provided.

Category List
Benefits
  • Covers costs associated with data breach response and notification
  • Pays for legal services in the event of a data breach lawsuit
  • Covers income loss due to system downtime from a cyber attack
  • Covers costs to recover and restore hacked or lost digital assets and data
  • Provides access to breach response services like legal advisors and PR firms
  • Covers extortion payment and ransoms in the event of ransomware attacks
  • Covers cyber extortion, such as paying a hacker to prevent data leaks
  • Provides liability protection against lawsuits from affected individuals
Use Cases
  • Data breach or cyber attack leading to loss or theft of customer or employee personal information
  • Ransomware attack encrypting critical systems and demanding ransom for decryption
  • Operational disruptions and losses from a cyber attack impacting systems
  • Network security failures exposing systems to unauthorized access
  • Legal fees and fines from regulatory noncompliance due to a cyber incident

Based on industry data and risk factors, the estimated average annual cyber insurance pricing for businesses in the amusement parks and arcades industry (NAICS 7131) is around $2,500. This pricing was derived considering the typical number of records held, annual revenues, and common cyber security practices for businesses in this industry. Factors like data encryption, regular staff training, and use of firewalls help keep the pricing relatively low compared to other industries that store more sensitive personal information.

Estimated Pricing: $2,500

Business Interruption Insurance

Business interruption insurance provides coverage for losses of income and additional expenses if operations are suspended due to covered causes of loss. It is an important product for amusement parks and arcades to protect their revenue streams against disruptions outside of their control. Some key benefits include protecting income if the business needs to close temporarily, covering ongoing expenses, reducing financial stress from disasters, and providing funds for alternative locations or restructuring costs. Common use cases amusements parks and arcades need coverage for include weather events, equipment failures, accidents, or government closures.

Category List
Benefits
  • Protects lost income if your business closes temporarily due to an insured event like fire, flooding or extreme weather
  • Covers ongoing expenses like payroll, rent and loan payments when income is disrupted
  • Reduces financial stress of recovering from things outside your control like natural disasters
  • Provides funds to cover alternative business locations or restructuring costs if your primary site becomes unusable
  • Helps minimize losses from extended closures due to damage from accidents, equipment failures or infrastructure issues
  • Allows you to avoid laying off employees and helps resume normal operations more quickly after an interruption
Use Cases
  • Weather-related closures and damages (floods, hurricanes, storms, etc.)
  • Equipment failures or malfunctions
  • Accidents or injuries on premises that force a closure
  • Government-mandated closures (pandemics, terrorism alerts, etc.)
  • Fire or natural disasters damaging facilities

Based on average revenue and profit margins for businesses in the Amusement Parks and Arcades industry (NAICS 7131), business interruption insurance pricing would be approximately $5,000-$10,000 annually. This price range was calculated using industry averages for revenue ($5-10M annually) and net profit margins (5-10%) to estimate potential lost income from business interruption. Higher revenue businesses and those with smaller profit margins may expect pricing closer to the upper end of the range.

Estimated Pricing: $5,000-$10,000

Conclusion

In summary, general liability, commercial property, commercial auto, workers’ compensation, equipment breakdown, umbrella and cyber insurance provide layered protections for both the physical and legal risks amusement parks and arcades face on a daily basis. Having the right insurance coverage in place ensures these businesses can focus on safely serving customers without fears of financial ruin from unexpected incidents.

Frequently Asked Questions

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