No matter what the season is, people will always look for a place to unwind. And speaking of someplace to do just this, most will look for the fun and merry atmosphere of amusement arcades.
As an arcade owner, you know that the higher the number of visitors, the higher the chances of facing a lawsuit. This is why it is essential to get amusement arcade insurance that protects you against such claims. Read on as we discuss what amusement arcade insurance entails and why you should get it.
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Amusement Arcade Liability Insurance
Amusement arcades can expose patrons to numerous dangers. A proof of this is the fact that amusement arcades have to comply with requirements and follow rules to do business.
There’s no need for insurance to get an arcade business license. All the authorities want to see is an approved premises approval from the fire department, a review from the council board and member council, and applicable business certificates.
Nonetheless, not having insurance can be quite problematic. Insurance acts as the first wall of defense against the common problems amusement arcade owners face such as:
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Customer personal injury claims
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Fire breakouts
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Copyright infringement
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False advertising
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Equipment breakdown
Amusement arcade liability insurance guards against personal injury claims by providing a basic general liability coverage. General liability provides $1 million up to $2 million to small arcade businesses for the legal fees and settlements of personal injury lawsuits. On the other hand, big amusement arcades can get up to more than $5 million.
Prolonged use and exposure of arcade video game machines can result in physical injuries and mental disorders. An amusement arcade isn’t suable for any mental disorders a regular might develop. However, the law is clear about the liability of the owner for any physical injuries of the customer.
Physical injuries that customers may sue an amusement arcade for are trigger thumb, carpal tunnel syndrome, eye strain, and tennis elbow. The table below outlines the cost of settlement for these injuries in a lawsuit, which general liability insurance covers:
| Type of Injury | Settlement Cost |
|---|---|
| Eye strain | $31,000 |
| Carpal tunnel syndrome | $81,000 |
| Trigger thumb | $38,382 |
| Tennis elbow | $27,000 |
General liability in amusement arcade insurance doesn’t only answer personal injuries. It will also answer property damage lawsuits an amusement arcade might face. Most property damage lawsuits ended with amusement arcades paying a minimum of $5,000 to the plaintiff.
Protection, which liability insurance provides to amusement arcades, initially comes as a basic general liability coverage. However, it doesn’t end here. General liability can be paired with other coverages to cover risks aside from customer personal injuries and property damage.
Commercial Property Insurance for Amusement Arcades
General liability will not cover the destruction of the amusement arcade’s building and the objects inside. That’s why those, who ran arcades for many years, recognize the importance of commercial property insurance.
Everything inside amusement arcades use electricity. Electrical devices can go haywire. Ultimately, electrical device malfunctions can result in fires. Experts estimate the total cost of fires in the United States to be at $328.5 billion and the cost for repairing fire damages amount to $98,000 minimum per affected individual.
Commercial property insurance provides a $75,000 minimum amount payable to the policy holder. It covers electric-related fire breakouts caused by:
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Unclassified electrical failure or malfunction
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Short circuit from defective or worn insulation
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Arc or spark from arcade machines
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Faulty electrical wiring of the building
After getting commercial property insurance, there’s no need to get a stand-alone contents coverage that reimburses the cost of damaged objects inside the amusement arcade. It’s because aside from the building, commercial property will reimburse the policyholder equal to the projected cost of the arcade machines and other objects destroyed.
The terms of commercial property insurance differs from carrier to carrier. Understand that some carriers offer two types of commercial property insurance. The first one only covers damage caused by fire or any other event specified, while the second covers property damage because of fires, natural disasters, civil unrest and more.
In addition, commercial property won’t cover products or goods amusement arcade sells such as souvenirs and food . For this, arcade owners must endorse stocks and contents coverage on their commercial property policy.
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Does Commercial Property Cover Arcade Machine Repair or Replacement?
Yes, but only if the arcade machines were damaged because of a particular incident covered under the terms of the policy. However, if the arcade machines malfunctioned, the owner can’t use commercial property coverage to get the money for repair or replacement.
Equipment breakdown coverage in amusement arcade insurance is the answer to this problem. It gives the policyholder money based on the repair or replacement cost an underwriter attests a faulty arcade machine needs. The table below shows the the type of arcade equipment or machines and their replacement cost:
| Arcade Equipment | Replacement Cost |
|---|---|
| POS System | $679 |
| Arcade cabinet | $1,150 |
| Video game component | $3,000 |
| Monitor | $2,503 |
| Cables | $1,134 |
| Arcade stool | $264 |
Business Interruption Insurance for Arcades
All amusement arcades and other related business such as amusement parks and miniature golf courses are required to get a license to operate, and authorities can confiscate, revoke, terminate, and issue a non-renewal restriction of an arcade’s license because of:
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Conducting business operations outside of the schedules imposed by specific laws
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Admitting ages prohibited by law to enter the premises of arcades
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Allowing patrons to use illegal arcade gambling machines
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Leaving arcade patrons on their own without adult supervision
Problems regarding business licenses will force an amusement arcade owner to cease business operations. And so, it’s important that there must be backup funds to pay for loans and any other associated costs while the amusement arcade isn’t generating income.
Business interruption coverage in amusement arcade insurance will cover the amusement arcade until the license is ready and in effect. It will provide the money to pay for employee wages, electrical bills, water bills, loans, and other costs until everything is sorted out. Also, business interruption will provide coverage if ever the owner wants to transfer to a new location to solve the problem.
Public Liability Insurance for Amusement Arcades
Public liability insurance is one of the most important policies for your amusement arcade business. This policy ensures you have sufficient cover for claims arising from injury or property damage, just like in zoo insurance .
These claims could come from members of the public or any other third party. When someone accidentally hits another car in the parking lot due to a lack of clear parking space, the victim could sue you for damages. In that case, this insurance policy will cover the costs.
Employer’s Liability Insurance for Amusement Arcades
This is a legal requirement if you have employees in your amusement arcade business. When one of your employees is injured or gets sick because of work, they can file a claim against you. Amusement arcade insurance helps cover the medical costs and lost income compensation of the employee.
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Amusement Arcade Insurance Cost
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The average amusement arcade insurance cost is $46 per month or $552 per year for a $1 million general liability insurance policy. While the average cost could be affordable, you should know that various factors affect the cost of this insurance policy
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Amusement arcades pay $83.33 a month or $999.96 a year for a stand alone commercial property coverage
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The cost of equipment breakdown policy accounting for arcade machines and other related equipment costs $65 a month or $780 a year
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Business interruption costs $56 a month or 672 a year
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Business owners policy for amusement arcades bundling general liability together with any of the previously discussed coverages is $171 a month or $2,052 a year
The size of your amusement arcade business is one factor that affects the cost of insurance. If you run an established business with hundreds of visitors daily, you will have to pay more for insurance. This is the case because larger businesses face higher risks than smaller businesses. In addition, the type of insurance policy you choose could also determine the total cost.
Some policies cost more than others due to what they cover. If you want a comprehensive insurance cover, you will have to spend more on insurance.
The number of employees in your amusement arcade business also plays a vital role in determining the total cost. If you have hundreds of employees, you need a comprehensive insurance policy that could cost more.
Finally, here’s a table showing the pricing of the bes amusement arcade insurance companies:
| Cost per Year | Cost per Month | Best for | |
|---|---|---|---|
| CoverWallet | $40 | $480 | Amusement arcade owners looking for coverage that fits their specific needs |
| ESP | $50 | $600 | Amusement arcades who want to only get basic general liability coverage |
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Best Amusement Arcade Insurance Companies
CoverWallet Amusement Arcade Insurance
CoverWallet offers 4 insurance programs for amusement arcades – basic, standard, pro, and custom. Basic insurance only offers general liability. Standard insurance offers business owners policy that general liability and commercial property coverage comprise. Pro insurance allows the policyholder to enjoy general liability, commercial property, and workers comp coverages. Finally, custom insurance, as the name implies, allows the policyholder the coverages they think are needed.
Pros
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Offers 4 insurance programs for amusement arcades
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Implements online application and insurance agent live chat system
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Has good BBB reviews and BBB ratings
Cons
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Some users find difficulties in adding coverages to their existing insurance
Best for : Amusement arcade owners looking for coverage that fits their specific needs
Average cost: $40
Our rating: 5/5
ESP Specialty Arcade Insurance
Entertainment Sports Promotion offers amusement arcade insurance that customers might want to try as its basic general liability coverage is comprehensive enough. ESP’s general liability offers $1 million per occurrence with a $2 million aggregate limit, $1 million for products and completed operations coverage, and $1 million for advertising injury.
There’s also commercial property coverage that provides a lot of options such as money & securities, backup for sewers and drains, and pollutant cleanup and removal. All in all, just like Coverwallet, ESP offers a lot so that amusement arcade owners can get the best protection.
Pros
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Highly efficient insurance agents
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Offers a lot of coverages
Cons
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Expensive transaction fee
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A bit shady when it comes to the refunds department
Best for : Amusement arcades who want to only get basic general liability coverage
Average cost: $50
Our rating : 4/5
