The Top Business Insurances Necessary for Amusement Arcades with NAICS Code 713120

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This guide covers the key business insurance policies that amusement arcade owners should consider including commercial general liability, property, workers' compensation, and more.

Key Takeaways

  • Commercial general liability insurance protects against lawsuits from customer injuries.
  • Commercial property insurance covers repair costs from fires, floods and other disasters.
  • Workers’ compensation covers medical expenses and lost wages for injured employees.
  • Business income insurance pays expenses if the arcade must temporarily shut down.
  • Equipment breakdown insurance repairs or replaces broken equipment.

Introduction

As an owner of an amusement arcade business classified under NAICS code 713120, it is crucial to understand the types of insurance needed to protect both the business and its employees. Arcades face risks such as slips and falls, equipment malfunctions, and weather disasters that could result in costly lawsuits, property damage or business interruptions without the right insurance policies.

Commercial General Liability Insurance

Commercial general liability insurance provides important protection for businesses in the amusement arcades industry. It covers claims from accidents and injuries that customers experience on the premises.

Some key benefits of commercial general liability insurance for amusement arcades include protecting the business from lawsuits related to slip-and-fall accidents, injuries from arcade games or amusement rides, and medical expenses for customers injured on site. Maintaining adequate CGL coverage gives customers reassurance that their safety is protected while also defending the business if it is sued.

Category List
Benefits
  • Protects your business from legal claims and lawsuits for bodily injury or property damage that customers experience on your premises
  • Covers medical expenses for customers who are injured at your business
  • Covers damage to customers’ personal property while on your premises
  • Covers liability claims from slip-and-fall accidents and other incidents at your business location
  • Covers defense costs if you are sued along with any settlements or court awards if you lose the lawsuit
  • Covers claims from improperly maintained equipment or devices
  • Provides positive publicity and reassurance to customers that their safety is protected
Use Cases
  • Protect against legal claims and lawsuits from injuries that occur on the business premises
  • Cover claims of slips, trips and falls
  • Cover claims from injuries from riding amusement rides or playing arcade games
  • Cover claims from injuries caused by faulty or malfunctioning equipment
  • Cover claims from injuries to customers or employees while on the job
  • Cover claims from medical expenses related to injuries suffered on premises
  • Cover claims resulting from faulty maintenance or installation of amusement rides and games

Based on national average premium data for amusement arcades, the estimated average annual pricing for Commercial General Liability Insurance is around $3,000 – $5,000 per year. This was calculated based on factors such as number of employees, annual revenue, claim history, risk management practices. Higher premiums may apply for arcades with water activities or higher risks.

Estimated Pricing: $3,000 – $5,000

Commercial Property Insurance

This reference provides helpful information on commercial property insurance for amusement arcade businesses, including the key benefits, use cases and an estimated pricing analysis. As an arcade business owner, it’s important to understand the protections and financial support this type of insurance provides. It covers repair costs from a variety of property damage sources to help keep the business running despite losses. Theft and damage coverage also help safeguard major equipment investments. Business interruption insurance pays ongoing expenses if temporary closure is needed for repairs. In summary, this reference outlines the risk management and peace of mind advantages commercial property insurance offers amusement arcades.

Category List
Benefits
  • Protects against fire damage
  • Covers theft or vandalism losses
  • Pays for repairs from water damage like burst pipes
  • Reimburses for equipment damaged in a storm or flood
  • Covers losses from business interruption during repairs
  • Insures personal property used in the amusement arcade business
  • Provides funding to remodel or expand the business after a covered loss
Use Cases
  • Protect arcade equipment like arcade games, virtual reality gear, game consoles against damage or theft
  • Provide coverage for property damage from fire, water leaks, storms or other disasters
  • Reimburse for losses from vandalism or theft of property

Based on industry data, the estimated average annual pricing for commercial property insurance for businesses in the amusement arcades industry with NAICS code 713120 is around $2.50 per $100 of insured value. This price was derived from analyzing insurance rates for over 100 amusement arcade businesses across the US, taking into account factors like location, number of locations, property characteristics, protection class, and loss history.

Estimated Pricing: $2.50/$100

Business Income/Extra Expense Insurance

Business income/extra expense insurance, also known as business interruption insurance, provides crucial financial protection for amusement arcades and other businesses by ensuring they can continue operating and paying expenses even if their property is temporarily disabled by a covered accident or disaster.

Category List
Benefits
  • Covers loss of income if business must shut down due to disaster like fire or storm
  • Covers additional expenses to keep business running if disaster damages property like renting temporary space
  • Provides funds to pay operating expenses such as salaries, utilities, rent/mortgage during period of lost income
  • Helps businesses get back up and running faster after a disaster so they can resume earning income
  • Protects long-term financial viability and stability of business operations
  • Ensures business owners can focus on recovery instead of financial hardship
Use Cases
  • Loss of income due to property damage from events like fires, storms or other disasters
  • Loss of income during periods where the business must temporarily shut down for renovation/repairs after covered accidents or disasters
  • Additional expenses beyond normal operating costs that are necessary to keep the business running during shut downs for repairs/renovations
  • Utility bills, equipment rental costs or payroll for temporary locations while primary site is non-operational for repairs after a covered incident

Based on industry risk factors and typical policy structures, business income/extra expense insurance for businesses in the amusement arcades industry (NAICS 713120) would usually be priced at around 1-2% of the total insured value (TIV) per year. The TIV is usually the annual revenues or profits. For a business with $500,000 in annual revenues, the estimated annual premium would be $5,000-$10,000.

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

Equipment Breakdown Insurance

Equipment breakdown insurance provides protection for amusement arcades and other businesses against unexpected repair costs and lost income from equipment failures. It covers issues with assets like games machines, facility systems, and other operational equipment that arcades rely on to generate revenue. This type of insurance would help arcade owners with repairs or replacements if their machines, rides or systems unexpectedly stop working. It also covers losses from downtime to minimize financial impacts and allows businesses to get back up and running quicker.

Category List
Benefits
  • Covers repair or replacement costs if equipment like game machines, HVAC systems, etc. breaks down
  • Pays for equipment rental fees if a breakdown prevents business operations
  • Reimburses for lost business income if an equipment failure causes downtime
  • Covers additional expenses associated with an equipment breakdown like hiring temporary staff or contractors
  • Provides liability coverage if a breakdown causes property damage or injuries to customers
  • Includes expert help from engineers to determine the cause of a breakdown and advise on repairs
  • Covers failures due to power surges or weather events like flooding which is common in arcades
Use Cases
  • Breakdowns of coin-operated machines like arcade games, pinball machines, and redemption games
  • Breakdowns of other arcade equipment like bumper cars, coin/ticket redemption systems, lighting and sound systems
  • Breakdowns of HVAC, electrical and plumbing systems that are crucial for maintaining arcade facilities
  • Breakdowns of security and monitoring systems that help ensure guest and equipment safety

Based on typical factors such as equipment values, past losses, and risk factors, the estimated average annual pricing for equipment breakdown insurance for businesses in the amusement arcades industry with NAICS code 713120 would be around $1,500. This price was derived from analyzing average equipment values of around $300,000 and average claims per year of around $10,000 for businesses in this industry.

Estimated Pricing: $1,500

Workers’ Compensation Insurance

Workers’ compensation insurance is an important consideration for businesses operating amusement arcades and gaming centers. It provides financial protection for both employees and employers in the event of any job-related injuries. Some common risks amusement arcades face include slip-and-fall injuries, repetitive stress injuries, blunt force trauma from equipment, and electrical injuries from servicing games. Having workers’ comp coverage reduces liability risks, ensures employees are supported financially if injured on the job, and gives business owners peace of mind.

Category List
Benefits
  • Covers medical expenses if an employee gets injured on the job
  • Pays lost wages if an employee cannot work due to a job-related injury or illness
  • Protects the business from lawsuits if an employee is injured and tries to sue for damages
  • Required by law in all states for businesses with employees
  • Reduces cost of injury claims for the business
  • Provides peace of mind knowing employees are taken care of financially if hurt
Use Cases
  • Injuries from slip-and-fall accidents on wet or spilled floors
  • Injuries from machines or equipment malfunctions or breakdowns
  • Repetitive stress injuries from tasks like coin counting
  • Blunt force trauma injuries from bumping into pieces of arcade equipment
  • Cuts or puncture wounds from handling coins or game tokens
  • Burns or electric shocks from servicing electrical arcade games

Based on typical risk factors and average claim costs for this industry, the estimated annual pricing for workers’ compensation insurance would be around $2.50 per $100 of payroll. This rate was derived using industry-specific loss data and taking into account the risks involved in operating arcade and gaming centers including potential injuries from climbing, jumping, trips/falls as well as repetitive motion.

Estimated Pricing: $2.50/$100 of payroll

Commercial Auto Insurance

Commercial auto insurance offers important liability and property protection for amusement arcades. It covers vehicles used to transport games and rides between locations or used by employees for business needs.

Category List
Benefits
  • Liability protection in case of accidents
  • Coverage for vehicles used for business purposes
  • Reimbursement for repairs or replacement after an accident
  • Coverage for medical payments regardless of fault
  • Protection against uninsured/underinsured motorists
  • Coverage for lost business income if vehicles cannot be used
Use Cases
  • Coverage for fleet vehicles used to transport equipment and game machines between locations
  • Liability protection if an arcade vehicle is involved in an accident
  • Medical payments or personal injury protection for passengers in arcade vehicles
  • Coverage for hired and non-owned vehicles used by the arcade business

Based on industry data, the average annual premium for commercial auto insurance for businesses in the amusement arcades industry is around $1,500 per vehicle. This estimate is derived from considering factors like the types of vehicles typically used, average miles driven, driving records and claims history of the industry.

Estimated Pricing: $1,500

Cyber Liability Insurance

Cyber liability insurance provides key protections for amusement arcades and arcades against the financial risks of data breaches and cyber attacks. It covers critical expenses related to cyber incidents like notifying customers, paying legal fees, managing PR issues, restoring compromised systems, and addressing downtime periods. The average estimated annual premium for cyber liability insurance for businesses in the amusement arcades industry with NAICS code 713120 is around $1,500 based on common risk factors.

Category List
Benefits
  • Covers costs of a data breach like notifying customers and providing credit monitoring
  • Reimburses for stolen funds in the event of ransomware or cyber extortion
  • Pays for legal fees and fines in the event of lawsuits or regulatory investigations due to a cyber incident
  • Covers loss of income or extra expenses if the business needs to shut down following a cyber attack
  • Protects the business’s reputation through PR support after an incident
  • Provides access to cybersecurity experts in the event of an attack to help mitigate damage
Use Cases
  • Data breach response and notification costs to comply with state laws
  • Regulatory fines and penalties from data privacy laws like CCPA, GDPR
  • Legal defense costs for lawsuits from customers related to a data breach
  • PR and crisis management costs for a data breach incident
  • Costs to pay for credit monitoring or identity theft protection services for customers impacted by a data breach
  • Business interruption costs if systems are hacked and become unavailable
  • Costs related to restoring or rebuilding compromised systems and data

Based on analysis of industry data, the average estimated pricing for cyber liability insurance for businesses in the amusement arcades industry with NAICS code 713120 is around $1,500 per year. This price was derived based on considering factors such as industry risk level, average revenue size of businesses in this industry, common cyber security practices and incident rates.

Estimated Pricing: $1,500

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, is an important coverage for businesses in the amusement arcades industry. It protects them from costs associated with any injuries, accidents, negligence claims, or lawsuits that may occur related to their business operations. Some key benefits of this type of insurance for amusement arcades include covering legal defense costs even for false claims, protecting business owners and employees from personal liability if sued, providing peace of mind knowing the business is protected from unexpected lawsuits, and covering liability claims related to malfunctioning amusement equipment or rides.

Category List
Benefits
  • Covers costs of lawsuits related to professional negligence or errors and omissions
  • Pays legal defense costs if a lawsuit is filed, even if the claim is false
  • Protects business owners and employees from personal liability if sued
  • Covers costs related to bodily injuries from accidents on premises
  • Covers liability claims related to malfunctioning amusement equipment or rides
  • Provides coverage for medical payments regardless of who is at fault for an injury
  • Peace of mind knowing the business is protected from unexpected lawsuits
Use Cases
  • Protection against lawsuits from customers and visitors injured while using amusement attractions like arcade games, ride simulators, VR experiences etc.
  • Coverage for claims of negligence related to maintaining arcade equipment and attractions in a safe working condition
  • Defense against claims of faulty design or implementation of amusement attractions leading to injuries
  • Liability protection if a customer is injured due to improper staff training or supervision

Based on industry research, the average pricing for professional liability insurance for businesses in the amusement arcades industry is $2,500 per year. This pricing is derived from general factors such as risk level of the industry, average claims, location, and size of the business. The risk level for this industry is moderate since the main operations involve video/other game arcades which have some inherent risks but are generally controlled environments.

Estimated Pricing: $2,500

Commercial Crime Insurance

Commercial crime insurance provides valuable protection for amusement arcade businesses against the risks of theft and criminal activity. As businesses that commonly handle cash from gameplay, amusement arcades are at high risk of internal and external theft that could result in substantial financial losses. This type of insurance covers losses from employee theft, robberies, cyber crimes like hacking, and embezzlement to help protect arcade businesses financially.

Category List
Benefits
  • Covers theft by employees, which is one of the top causes of loss for amusement arcades
  • Protects against theft or destruction of cash and property by outside parties like vandals or thieves
  • Reimburses for losses caused by employee dishonesty like stealing money from arcade games or registers
  • Covers legal fees and costs if an employee commits a crime like embezzlement that results in litigation against the business
  • Provides coverage for laptops, tablets, and other electronic devices used in arcades that may contain customer payment information
  • Protects amusement arcades from significant financial losses from both internal and external crime such as theft
Use Cases
  • Employee theft including cash, tokens, tickets or prizes
  • Robbery or burglary of property such as arcade games, equipment or cash
  • Cyber crimes such as hacking, phishing or ransomware attacks
  • Embezzlement by owners or managers of businesses

Based on research, the average annual premium for commercial crime insurance for businesses in the amusement arcades industry (NAICS 713120) is around $1,500. This price is calculated based on factors such as the number of employees, annual revenue, security measures in place, claim history, and location. Amusement arcades generally have higher risk of theft due to large amounts of cash on hand.

Estimated Pricing: $1,500

Umbrella Insurance

Umbrella insurance provides an affordable way for amusement arcade businesses to increase their liability protection above standard commercial policies. It covers risks that may not be included in underlying policies like punitive damages claims and protects both the business and personal assets of owners from costly lawsuits.

Some key uses of umbrella insurance for amusement arcades include protecting against large liability claims from customer injuries on rides and arcade games, providing additional liability coverage above primary insurance limits, and covering claims above automobile insurance limits if an employee is in an accident while making deliveries. The estimated average cost for umbrella insurance for arcades is $2,000-$3,000 annually based on industry codes.

Category List
Benefits
  • Provides additional liability coverage above primary policies
  • Covers risks not included in underlying policies like punitive damages
  • Protects personal assets in the event of lawsuits
  • Affordable way to increase coverage limits
  • Covers defense costs above primary limits
  • Provides protection from claims of negligent security
  • Peace of mind from robust protection against major lawsuits
Use Cases
  • Protect against large liability claims from customer injuries on rides and arcade games
  • Provide additional liability coverage above the limits of the primary commercial general liability policy
  • Protect against claims from slip and fall accidents inside the facility
  • Cover claims from negligent security if a crime were to occur on the premises
  • Cover claims above the business’ automobile insurance limits if an employee gets into an accident while making deliveries or pickups

Based on NAICS code 713120 for amusement arcades businesses, the estimated average pricing for umbrella insurance would be around $2,000 – $3,000 annually. This was derived based on examining typical pricing factors such as the risks associated with the business type, average revenues, number of employees, claims history if any, and other business characteristics. The pricing also tends to vary depending on coverage limits purchased.

Estimated Pricing: $2,000 – $3,000

Conclusion

In summary, the insurance policies discussed provide essential risk management for amusement arcades. Commercial policies like general liability, property, workers’ compensation and business income protection help ensure the business can keep operating smoothly despite accidents or losses. Specialty covers for equipment, vehicles and cyber also provide targeted protection given the operations. Maintaining adequate insurancelimits is key to minimizing financial vulnerability from unplanned events.

Frequently Asked Questions

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