Key Takeaways
- General liability insurance protects against lawsuits from injuries on premises or involving services
- Professional liability insurance covers lawsuits alleging negligence, errors or omissions in services
- Commercial property insurance protects buildings, equipment, inventory from risks like fire and theft
- Commercial auto insurance covers vehicles used for business and liability from accidents
- Worker’s compensation covers medical costs and lost wages if employees get injured on the job
- Media liability insurance protects against copyright infringement and defamation lawsuits
- Cyber liability insurance covers costs of data breaches, cyber attacks, security failures and lawsuits
Introduction
Businesses in the arts, entertainment, and recreation industry with NAICS Code 71 face unique risks that traditional business insurance policies do not fully address. This article examines the top insurance needs for these creative sector businesses including general liability, professional liability, commercial property, commercial auto, workers’ compensation, media liability and cyber liability insurance.
General Liability Insurance
General liability insurance provides critical protection for businesses in the arts, entertainment and recreation industries against costly lawsuits from injuries or accidents that may occur on their premises or during activities. It covers legal fees and settlements if someone sues the business for damages. It also protects business assets and reputation. Without coverage, one lawsuit could bankrupt a small business. General liability insurance even covers defense costs, even for unjust claims.
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Based on industry analysis, the average annual general liability insurance pricing for businesses in the Arts, Entertainment, and Recreation industry with NAICS code 71 is approximately $1,500 – $3,000. Pricing can vary depending on factors like business size, annual revenue, number of employees, types of activities, and claims history. Businesses with higher risk activities like outdoor adventure courses may see pricing up to $5,000 annually.
Estimated Pricing: $1,500 – $3,000
Professional Liability Insurance
Professional liability insurance provides critical protection for businesses and non-profits in the arts, entertainment, and recreation industries. It offers coverage for lawsuits related to alleged negligence, errors, omissions, and other claims from customers regarding injuries, property damage or failures to perform as agreed that could threaten the livelihood of an uninsured business. Businesses and organizations in fields like performing arts, spectator sports, museums and more face risks of legal claims from customers related to their services. Professional liability insurance can help defend against such lawsuits and pay for settlements, ensuring operations can continue without financial ruin.
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Based on typical pricing models, professional liability insurance for businesses in this NAICS code would be estimated to be priced around $1,000-$3,000 per year depending on factors like annual revenue, number of employees, type of business (e.g. performing arts vs. spectator sports). The price is calculated based on risk assessment of the likelihood and cost of claims for that particular industry as well as overhead costs for insurance providers to underwrite the policies.
Estimated Pricing: $1,000-$3,000
Commercial Property Insurance
Commercial property insurance provides essential protection and peace of mind for creative businesses. It covers buildings, equipment, inventory, valuable collections and more from risks allowing arts and entertainment enterprises to focus on their creative work. Estimated pricing for a typical business is around $1,500 annually based on factors like property values, business size and claims history. This competitive pricing helps arts and entertainment ventures budget for unplanned incidents.
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Based on averages for similar businesses, the estimated annual pricing for commercial property insurance would be around $1,500. This was calculated by taking into account factors like business size, property values, past claims experience. Business in arts, entertainment and recreation tend to have lower property values which helps keep pricing competitive.
Estimated Pricing: $1,500
Commercial Auto Insurance
“Commercial auto insurance provides essential coverage and protection for businesses in the arts, entertainment, and recreation industry that regularly use vehicles for transportation as part of their operations. It covers legal liability, medical expenses, vehicle replacement costs, and more to help protect these businesses financially in the event of an accident.”
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Based on national average rates, commercial auto insurance for businesses in the arts, entertainment, and recreation industry would be approximately $1000-$1500 per vehicle per year. This pricing was calculated based on factors such as vehicle type, number of employees, annual mileage, safety record, etc. Businesses in this industry tend to have fleets of smaller passenger vehicles which results in moderately priced auto coverage.
Estimated Pricing: $1000-$1500
Workers’ Compensation Insurance
Workers’ compensation insurance provides important coverage for businesses in arts, entertainment, and recreation industries. It covers costs associated with on-the-job injuries and protects the viability of operations. Some key benefits include covering medical expenses and lost wages for injured employees, as well as protecting businesses from costly lawsuits. Common use cases involve injuries from stunts, slips and falls, heavy lifting, loud noise exposure, and stage accidents. Estimated pricing is around $2.50 per $100 of payroll based on industry risk factors. Workers’ comp insurance ensures employees receive support and businesses face fewer disruptions from workplace accidents and injuries that commonly occur in fields like film, theatre, and live performances.
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Based on industry data and risk factors, the estimated average pricing for workers’ compensation insurance for businesses in the arts, entertainment, and recreation industry with NAICS code 71 would be around $2.50 per $100 of payroll. This price was derived from national industry data that shows claims in this industry tend to be higher due to physical labor and exposure to injuries. The national average rate is around $1.20 per $100 of payroll.
Estimated Pricing: $2.50 per $100 of payroll
Media Liability Insurance
Media liability insurance provides coverage specifically for businesses in artistic, creative and entertainment industries. It protects against costly legal claims that may arise from the production, distribution and usage of various media works across websites, publications, performances and digital platforms.
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Based on typical pricing formulas for this industry, the estimated average annual premium for media liability insurance would be $2,500. Premiums are usually calculated based on factors such as annual revenue, number of employees, types of media coverage provided, and risk management practices. For most small to mid-sized businesses in this industry falling under NAICS Code 71, annual revenues are typically under $5 million with less than 50 employees. Therefore, the basic annual premium of $2,500 provides over $1 million in coverage which should suffice for most needs.
Estimated Pricing: $2,500
Cyber Liability Insurance
Cyber liability insurance provides protection for businesses in the arts, entertainment, and recreation industry with NAICS code 71 from costly risks and financial losses associated with data breaches, cyber attacks, security failures, and lawsuits. It covers expenses related to forensic investigations, notifying affected individuals, restoring IT systems, business interruption, and legal fees. An estimated average annual premium for a basic cyber liability policy for businesses in this industry is around $2,500 according to research on insurance rates and policies. Common risks that could be covered include ransomware attacks, data breaches, accidental data disclosures, website hacks or failures, and lawsuits over negligent data practices.
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Based on research of insurance rates for businesses in the arts, entertainment, and recreation industry with NAICS code 71, the average annual pricing for a basic cyber liability insurance policy is around $2,500. This estimated price was derived from insurance quotes and policies reviewed from top carriers for small businesses in this industry sector, taking into account average revenue sizes and risk profiles.
Estimated Pricing: $2,500
Conclusion
Proper business insurance protection is critical for arts, entertainment and recreation businesses to mitigate risks, ensure operations continuity and focus on their core work. The insurance types discussed provide essential coverage of legal liabilities and property exposures faced by creative sector organizations. With the right insurance package in place, these businesses can pursue their artistic missions without worrying about financial ruin from unplanned events.