Arcade insurance is a specialized type of business insurance designed to cover the various risks associated with operating an arcade. This includes property damage, liability claims and business interruptions.
Understanding the different components of arcade insurance can help you choose the right policy to safeguard your investment.
What insurance do you need for an arcade?
General business insurance might not be enough to cover the specific needs of your arcade. For the majority of arcade business owners, the three most common types of specialized insurance coverages needed include specialized equipment insurance, injury liability insurance and prize inventory insurance.
Specialized equipment insurance covers damage to expensive arcade games and equipment. Unlike general business insurance, this policy ensures that your valuable assets are protected against malfunctions and other issues that could disrupt your business.
Injury liability insurance protects your business against claims resulting from injuries caused by malfunctioning equipment or accidents within the premises. For example, an interactive game such as VR gaming can potentially cause injury, which this type of insurance will cover.
Another very specialized insurance is prize inventory insurance. This specialized insurance can protect against loss or damage to your prize inventory, which will ensure that you can continue to attract and reward customers.
Key Coverages for Arcade Insurance
Arcade insurance goes beyond general business insurance, addressing the unique risks and liabilities that arcade and amusement businesses face. This specialized coverage is essential to ensure that your arcade is adequately protected from potential financial losses.
Property Insurance
Property insurance provides coverage for your physical assets, including arcade machines, equipment, and the building itself. This insurance protects against various risks such as fire, theft, and vandalism. For example, if a fire damages your arcade machines or if a thief breaks in and steals valuable equipment, property insurance will help cover the repair or replacement costs.
Liability Insurance
Liability insurance offers protection against legal claims arising from injuries or damages that occur on your premises. This is particularly important for arcades, which are high-interaction environments where accidents can happen. If a customer is injured while playing a game or if a piece of equipment causes damage to someone else’s property, liability insurance can cover medical expenses, legal fees, and potential settlements.
Business Interruption Insurance
Business interruption insurance compensates for lost income due to temporary closures of your arcade. This coverage is crucial in scenarios such as natural disasters, power outages, or other unforeseen events that force your business to close temporarily. For instance, if a severe storm causes significant damage to your arcade, business interruption insurance can help cover the lost revenue during the repair period.
Workers’ Compensation
Workers’ compensation insurance covers medical expenses and lost wages for employees who get injured while working at your arcade. This type of insurance is often legally required and offers significant benefits for arcade owners by protecting them from potential lawsuits related to workplace injuries. For example, if an employee gets hurt while maintaining an arcade machine, workers’ compensation insurance will cover their medical bills and a portion of their lost wages.
Cyber Insurance
Cyber insurance provides protection against data breaches and cyberattacks, which are increasingly relevant for arcades that handle customer data and electronic payments. If your arcade’s computer systems are hacked and customer information is stolen, cyber insurance can cover the costs of notifying affected individuals, credit monitoring services, and legal fees.
Specialized Insurance Coverages
Specialized insurance coverages for arcades include protection for valuable gaming equipment, prize inventory and business interruptions. These tailored coverages ensure comprehensive protection against the unique risks faced by arcade businesses.
Equipment
Specialized equipment coverage is designed specifically for arcade machines and other unique equipment. This ensures that all valuable assets are adequately protected. If a high-tech gaming machine is damaged or stolen, this insurance will cover the repair or replacement costs, ensuring that your arcade can continue to operate smoothly without significant financial setbacks.
Prize Inventory
Prize inventory insurance is another essential coverage needed for arcades that offer prizes as part of their gaming experience. This specialized coverage protects your prize inventory against risks such as theft, damage, and loss. Arcades often invest significantly in attractive prizes to draw in customers, making it crucial to ensure these assets are adequately covered.
Business Interruptions
Business interruption insurance is a critical coverage for arcades to ensure financial stability during unexpected closures. This specialized insurance protects against loss of income due to events such as natural disasters, fires, or other incidents that may temporarily halt operations.
Keep in mind that for amusement arcade insurance in particular, it should cover both protection for specialized equipment, liability for customer injuries and business interruption due to unforeseen events. Ask your insurance agent about comprehensive coverage to address these unique risks specific to arcades.
Finally, dry arcade insurance coverage is designed for amusement arcades that do not include water-based activities such as swimming or water slides. This type of insurance focuses on the unique risks and liabilities associated with “dry” entertainment options such as video games, pinball machines, virtual reality experiences and other non-water-related amusements.
Arcade Insurance Cost Breakdown
In the US, arcade business owners can expect to spend between $1,000 and $10,000 annually on insurance, depending on the size and nature of their operations. The cost of arcade insurance is influenced by factors such as the number of machines, the size of the arcade, the number of employees, and the specific coverages required.
Arcade Size
| Small Arcade | Medium Arcade | Large Arcade | |
| Number of Machines | 5-20 machines | 21-50 machines | 51+ machines |
| General Liability Cost | $500-$1,000 annually | $1,000-$2,000 annually | $2,000+ annually |
| Property Insurance Cost | $400-$1,000 annually | $1,000-$2,500 annually | $2,500-$5,000 annually |
| Equipment Insurance Cost | 2-4% of equipment value | 2-4% of equipment value | 2-4% of equipment value |
| Business Interruption Cost | $300-$700 annually | $700-$1,500 annually | $1,500-$3,000 annually |
| Cyber Insurance Cost | $150-$500 annually | $500-$1,000 annually | $1,000-$2,000 annually |
| Workers’ Compensation Cost | $500-$1,200 annually | $1,200-$2,500 annually | $2,500-$5,000 annually |
| Comprehensive Package Cost | $1,000-$3,000 annually | $3,000-$6,000 annually | $6,000-$10,000+ annually |
Choosing the Right Arcade Insurance Policy
The first step is to understand your needs by reviewing the insurance coverage options specific to arcade businesses and determining how they fit within your operation. Consider factors such as the types of games and equipment in your arcade, the value of your property and inventory, the number of employees and payroll, and the customer traffic and potential risks.
Next, start researching potential providers and pay close attention to reputation factors such as their financial strength and customer support rating. Contact our insurance team to learn more.
Here’s a list of three providers you can directly contact:
When speaking with an insurance provider, make sure to find out how customizable the policy can be to ensure it fits your business needs. Factors to consider include coverage limits and exclusions, reputation and reliability of the insurance provider, and cost and affordability. You don’t want to overpay for a combination of coverages that you may never need.
Another suggestion is to consult with industry experts through various forums and professional associations. Additionally, use tips for comparing policies and getting quotes to ensure you find the best option for your arcade.
Conclusion
Making informed decisions about arcade insurance is crucial for long-term success. Assess your specific needs by considering the types of games and equipment, the value of your property and inventory, the number of employees, and customer traffic. This helps you choose the right coverage to protect your business the best.