Top Business Insurances for Casinos, Hotels and Gambling Facilities with NAICS Code 721120

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Understand the essential business insurances casino hotels should have to protect against risks including liability, property damage, cyber attacks and more.

Key Takeaways

  • General liability insurance protects against third-party injury claims on premises
  • Property insurance covers damage to buildings and valuable assets from disasters
  • Workers compensation ensures employees are cared for if injured on the job
  • Cyber insurance covers costs of data breaches and system damage from cyber attacks
  • Directors and officers liability protects executives from lawsuits
  • Employment practices liability covers legal defense of employee claims

Introduction

Businesses in the casino hotels industry face a variety of unique risks that necessitate strong insurance protection. As large properties with sizable assets and thousands of visitors daily, these businesses require specific insurance policies to safeguard against losses. The top policies casino hotels should consider include general liability, property, workers compensation, cyber, directors and officers liability, and employment practices liability insurances.

General Liability Insurance

General liability insurance provides essential protection for casino hotel businesses by covering their legal liabilities and costs from accidents and injuries occurring on the premises. It helps protect the financial assets of businesses in this industry from costly lawsuits.

Category List
Benefits
  • Protects against third-party claims for bodily injury or property damage
  • Covers lawsuits from slip and falls or other accidents on premises
  • Protects against liability for serving alcohol to intoxicated guests
  • Covers liabilities from recreational activities like lounges and pools
  • Covers liability if a guest is injured using exercise or other amenities
  • Provides liability coverage for special events held on premises
  • Covers liability from vehicles owned, hired or used by the business
Use Cases
  • Bodily injury or property damage claims from guests or visitors at the property
  • Slip-and-fall accidents within the casino or hotel facilities
  • Damages from injuries occurring during casino games or activities
  • Liability claims from negligent security practices leading to crimes on property

Based on industry analysis, the average pricing for general liability insurance for businesses in the casino hotels industry with NAICS code 721120 is around $5 per $1000 of gross receipts, with a minimum premium of $3000. This pricing is derived based on the average claims ratio and risk level of this industry, which involves operations of gaming facilities like casinos and high levels of customer traffic.

Estimated Pricing: $5/$1000

Property Insurance

Property insurance provides essential protection for casino hotels and their valuable buildings, assets, and business operations. It covers costs to repair or replace damaged property from disasters while also protecting the business from liability and lost revenue during repair downtimes.

Given the high risks casino hotels face from hazards like fires and floods in their large properties, property insurance gives financial security to continue serving customers after losses. It also safeguards the expensive gaming equipment, furniture and other assets that casino hotels heavily rely on for business.

Category List
Benefits
  • Covers property damage from disasters like fire, flooding or storms
  • Protects valuable equipment and assets from theft or damage
  • Provides reimbursement to repair or replace property after a covered loss
  • Covers liability if a guest is injured on your property
  • Includes business interruption coverage to continue paying operations during repairs
  • Covers extra expenses like temporary office space if the building is unusable
Use Cases
  • Protection against fire damage to buildings and structures
  • Protection against damage from severe weather events like hurricanes, floods, hail etc.
  • Protection against theft of property or equipment
  • Protection against employee theft or embezzlement
  • Protection against damage from broken pipes or malfunctioning HVAC systems
  • Protection against business interruption losses from covered property damages to continue operations

Based on typical pricing models in the property insurance industry, casino hotels can expect to pay on average $3.50 to $4 per square foot annually for property insurance. This pricing takes into account factors like the value of property and assets, risk of hazards like fire or flood, security measures in place, and loss history. For a large casino hotel property of 500,000 square feet, this would equate to a total annual property insurance premium of $1,750,000 to $2,000,000.

Estimated Pricing: $1,750,000 to $2,000,000 annually

Workers Compensation Insurance

Workers compensation insurance provides important benefits and protection for businesses operating in high-risk industries like casino hotels. It ensures employees are taken care of if injured on the job and protects the business from expensive lawsuits. The estimated average pricing for workers compensation insurance would be around $5.00 per $100 of payroll based on risk factors and loss data for the casino hotels industry. Common on-the-job injuries in this industry include slip and fall accidents, injuries from lifting heavy items or operating kitchen equipment, repetitive motion injuries, and assaults.

Category List
Benefits
  • Covers medical expenses and lost wages for employees injured on the job
  • Provides protection against expensive lawsuits if an employee is injured
  • Required by law in most states
  • Reduces absenteeism related to on-the-job injuries
  • Attracts quality candidates by providing benefits and peace of mind
  • Insures against risks of operating in a high-risk hospitality industry like casinos
Use Cases
  • Slip and fall accidents
  • Injuries from lifting heavy items
  • Accidents from operating kitchen equipment
  • Injuries from dealing with unruly customers
  • Repetitive motion injuries from tasks like cleaning
  • Assaults or injuries from armed robberies

Based on average risk factors and historical loss data for the casino hotels industry, the estimated average pricing for workers compensation insurance would be around $5.00 per $100 of payroll. This rate is derived using industry-specific loss experience modifers, employee job duties, OSHA recordable incident rates, and claims frequency/severity data specific to NAICS code 721120.

Estimated Pricing: $5.00/$100 of payroll

Cyber Insurance

Cyber insurance is an important tool for businesses in the casino hotels industry to protect themselves from the financial risks of data breaches and cyber attacks. As casinos store and process large amounts of sensitive customer data in their systems everyday, they are high-profile targets for cyber criminals. Having the right cyber insurance can help cover various costs associated with incidents and ensure business continuity even during cyber events. Some key benefits of cyber insurance for casinos include covering the costs of data breach response, system restoration after attacks, business interruption, legal liabilities, and protecting their brand reputation. Common use cases that can be covered include data breach notification, ransomware payments, regulatory fines, privacy lawsuits, and cyber investigation services. The estimated annual premium for a casino with $50 million in revenue would be around $250,000 based on analyzing average insurance rates in the industry.

Category List
Benefits
  • Covers data breach response costs like credit monitoring, legal services, PR services if customer data is compromised
  • Pays for costs associated with restoring systems and data if impacted by a cyber attack
  • Covers theft of money via electronic means like funds stolen through fraudulent wire transfers
  • Covers legal liability if a customer sues the business for damages from a data breach
  • Covers business interruption costs like lost income/profits if systems are down due to a cyber attack
  • Provides access to cyber security experts and attorneys in the event of an incident for guidance
  • Covers costs of notifying affected customers in case of a breach
  • Protects brand and reputation in the event of a public data breach
Use Cases
  • Data breach response and notification costs
  • Cyber extortion and ransomware payments
  • Business interruption and system damage costs from cyber attacks
  • Regulatory fines and penalties for data breaches
  • Legal costs for privacy litigation and regulatory actions
  • Coverage for digital asset restoration
  • Public relations and crisis management services in event of breach
  • Cyber crime investigation and forensic analysis services

Based on an analysis of average cyber insurance rates for businesses in the hotel and casino industry (NAICS 721120), which often deals with large amounts of customer data and financial transactions, the estimated annual base rate for cyber insurance would be around $5 per $1,000 of revenue. For the average casino hotel with $50 million in annual revenue, this would calculate to a base annual premium of around $250,000. Additional factors such as claim history, security practices, and level of coverage may impact the final pricing up or down by 10-20%.

Estimated Pricing: $250,000

Directors And Officers Liability Insurance

Directors and officers liability insurance, also known as D&O insurance, protects the personal assets of executives and leadership from legal costs and damages incurred during the performance of their duties for an organization. D&O insurance is especially important for businesses in the highly regulated casino hotels industry to mitigate risks of litigation and regulatory claims. Key benefits of D&O insurance for casino hotels businesses include protecting directors and officers from personal liability in lawsuits, covering legal fees and defense costs if sued, and providing compliance with state gaming regulators’ requirements. Common use cases where D&O insurance applies include shareholder lawsuits, third-party negligence claims, and regulatory non-compliance actions. The estimated annual pricing for D&O insurance ranges from $15,000 to $25,000 depending on company size and other risk factors.

Category List
Benefits
  • Protects directors and officers from personal liability in lawsuits
  • Covers legal fees and other defense costs if sued
  • Covers liability from unintentional wrongful acts committed during business activities
  • Provides peace of mind knowing the business will cover legal costs if accused of wrongdoing
  • Covers claims from employees, investors, customers or regulators
  • Protects the company’s reputation by defending against even frivolous lawsuits
  • Attracts qualified directors and officers by reducing their risks of personal liability
  • Helps retain talented directors and officers who would otherwise be deterred by legal risks
  • Complies with requirements by state gaming regulators to protect company leadership
Use Cases
  • Lawsuits from shareholders claiming breach of fiduciary duty
  • Lawsuits from third parties (e.g. customers, suppliers, etc.) alleging negligence or other claims
  • Claims related to regulatory actions from government agencies like failure to comply with regulations
  • Employment claims like wrongful termination, harassment, and discrimination lawsuits

Based on research, the average pricing for Directors And Officers Liability Insurance for businesses in the casino hotels industry with NAICS Code 721120 is around $15,000 – $25,000 per year. Pricing depends on factors like the size of the company, annual revenue, number of employees/directors. Larger companies tend to pay closer to the higher end of the range due to having more employees and assets at risk of lawsuits. The pricing also fluctuates based on the insurance market conditions each year.

Estimated Pricing: $15,000 – $25,000

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) is an important insurance protection for businesses in the casino hotels industry. EPLI helps mitigate risks from costly lawsuits related to employment practices such as wrongful termination, discrimination, harassment and more by covering legal defense costs, settlements and damages if claims are lost in court. It also provides expert legal support and allows management to focus on running the business.

Category List
Benefits
  • Covers legal costs associated with defending against employee lawsuits alleging wrongful termination, discrimination, harassment, etc.
  • Covers settlement costs if employee lawsuits are settled out of court
  • Covers damages if employee lawsuits are lost in court
  • Provides access to experienced employment law attorneys and their expertise in defending against employee claims
  • Reduces stress for business owners and managers from the financial and reputational risks of employment litigation
  • Insures the business for compliant employment practices, allowing management to focus on running the business rather than worrying about potential litigation
Use Cases
  • Wrongful termination lawsuits
  • Discrimination or harassment claims
  • Wage and hour disputes
  • Family and medical leave act (FMLA) violations

Based on typical insurance rates for businesses in the casino and hotel industry (NAICS 721120), the estimated average annual premium for Employment Practices Liability Insurance would be around $5,000-$7,000. Factors that influence the pricing include number of employees, annual payroll, any past claims or lawsuits, and risk management practices. This price range was derived from gathering rate quotes from several large insurers for similar sized casino hotel businesses.

Estimated Pricing: $5,000-$7,000

Umbrella Insurance

Umbrella insurance provides additional liability coverage above the limits of commercial general liability and auto liability policies, protecting businesses in high-risk industries like casino hotels from costly lawsuits. The reference details the top benefits, use cases and estimated pricing of umbrella insurance for businesses in the casino hotels industry with NAICS code 721120. Benefits include coverage for incidents not covered by underlying policies, protection of personal assets, coverage for temporary premises, and protection for special events. Top use cases include protection from slip and fall lawsuits, injuries to third parties, and lawsuits due to over-serving alcohol. Estimated annual pricing for $1 million of umbrella insurance coverage is around $3,000.

Category List
Benefits
  • Provides additional liability coverage above the limits of your general liability and auto liability policies
  • Covers lawsuits from incidents not covered by underlying policies like libel, slander, invasion of privacy
  • Protects personal assets of business owners and executives in the event of a costly lawsuit
  • Covers temporary premises you rent for business purposes like conference rooms, suites for guests
  • Provides liability protection for incidents that occur during special events held at the property
  • Protects the business in the event that a patron is injured on the property and sues for medical costs and damages
Use Cases
  • Protection from lawsuits due to slip and fall accidents
  • Protection from lawsuits due to defective equipment or property
  • Protection from injuries to vendors, contractors or third parties
  • Protection from injuries to customers from criminal acts
  • Protection from lawsuits due to over-serving alcohol

Based on typical rates for umbrella insurance and considering factors like the risks involved in casino hotel operations, revenue size of businesses in this industry, common claims, and loss history data, the estimated average annual pricing for $1 million of umbrella insurance coverage would be around $3,000. This pricing is derived from combining the standard rates that insurers typically charge for high risk commercial property/casualty insurance with adjustments based on industry-specific factors.

Estimated Pricing: $3,000

Conclusion

By obtaining the right commercial insurance policies, casino hotel businesses can protect their operations, assets, employees and leadership from various risks inherent to the industry. With proper coverage in place, these businesses can focus on serving customers while ensuring financial security and peace of mind through risk transfer to insurance companies.

Frequently Asked Questions

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