Theater Insurance for Movie Theaters & Companies

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According to the National Association of Theater Owners, 39,000 indoor movie theaters exist in the United States 

Hundreds and possibly thousands of people visit theaters every day. If you run any of these, you want to ensure you have a countermeasure against emergencies. That’s where theater insurance comes in.

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Benefits of Theater Insurance

Theater insurance ensures that you are protected against financial losses when something unexpected happens, including fires, stampedes, and loss of business property.

Additionally, as a movie theater owner or company, you can obtain business insurance for theatre production which enables your business to obtain financing for the different productions and avoid bankruptcy in the likelihood of an accident.

What Will Be Included In Theatre Insurance?

Having highlighted some of the benefits of theater insurance, it would be prudent to point out what's found within a basic movie theater insurance cover. This is a query you must bring up when conversing with the different theatre insurance brokers. This way, you are able to compare the various offerings.

A basic theater insurance coverage includes compensation for damages to the physical premises or furnishings of the building. Additionally, the cover adequately takes care of your responsibility in the event that any visitor to your facility is injured.

Depending on the unique risks that your movie theater is exposed to, you might decide on negotiating for custom coverage within your theatrical insurance.

Now, suppose your establishment is within a flood-prone area. Negotiate with your insurer to have cover for your storage room against floods. You can also insure equipment and protect your business against loss of income on days when the theater’s operations are temporarily suspended.

Some providers will go a step further and offer community theatre insurance which encompasses all that would otherwise be offered to private theater owners.

Public Liability Insurance for Theatre Companies

As you operate the movie theater, you will likely be dealing with throngs of people. In today's litigious landscape, the chances of you being caught up in lawsuits are quite high.

With public liability insurance for theatre companies, you will be sufficiently covered in such a scenario. Here are some examples to give you an idea about how costly lawsuits can get:

• A Kansas movie theater faced a $50,000 lawsuit filed by a customer who got injured after his seat collapsed

• A viewer filed a $383,000 lawsuit against a popular theater chain after a slip and fall accident caused by a wet floor

Suppose one of your patrons trips on a prop or seat and sustains an injury or property damage. Public liability insurance would be responsible for covering the costs, specifically:

• The medical treatment of the claimant

• Reimbursements for the claimant’s losses after his or her property got damaged due to your theater’s fault

• Pay for attorney fees, administrative costs, and legal expenses

Public liability insurance provides $1 million-$2 million coverage for each personal injury or property damage claim. Note that this only covers claims filed by visitors, viewers, vendors, and other individuals who are not part of your theater’s operations.

So what particular situations will public liability insurance be useful? The following are incidents in which the policy can cover costs:

• Theater equipment falling over a guest

• Slip and fall accidents due to spilled drinks

• Tripp and fall accidents due to narrow spaces and poorly lit pathways

General Liability Insurance for Theater Companies

Note that public liability insurance only covers claims for bodily injury or property damage. If you want a policy that covers other liabilities, consider getting general liability insurance.

The primary function of general liability insurance is similar to public liability insurance. It will also:

• Cover medical treatments of third injured by your theater

• Refund the value of damaged properties third parties own

• Pay for legal defense costs

But note that, unlike public liability insurance, additional coverages can be added to the terms of general liability insurance. These are:

• Advertising injury coverage-With advertising injury coverage added, general liability insurance will pay for settlements, attorney fees, administrative costs, and other related expenses if a third party sues your theater for slander, libel, and copyright infringement

• Rented premises liability coverage-You can add rented premises liability coverage if your theater is renting a building. Rented premises liability coverage will reimburse the owner if his property is damaged by fire due to your negligence

General liability insurance for small theatre companies provides a $1 million-$2 million coverage for each claim of bodily injury or property damage. Big theaters can get up to $10 million coverage from general liability insurance.

Remember that general liability insurance only covers claims filed by viewers, visitors, vendors, and other individuals not part of your theater’s management.

Theater Company Product Liability Insurance

Insurance companies will ask you to include a product liability policy in theater insurance if your theater is selling burgers, wings, popcorn, and pizza to viewers.

Product liability insurance will cover settlements and defense costs if patrons sustain a foodborne illness after eating the food sold in your theater. Not only this, but the policy will also help if your theater is accused or guilty of mishandling or preparing food poorly.

Your theater can also leverage product liability insurance if it sells merchandise that harm or damage the properties of others by having:

• Labeling errors

• Manufacturing defects

• Design defects

Product liability insurance has a $1 million-$2 million per occurrence limit. You can avail this as an additional coverage to general liability insurance.

Umbrella Liability Insurance for Theater Companies

General liability or public liability insurance is adequate, but you must consider getting an umbrella or excess liability policy. Think of this as an expansion of your public liability or general liability policy’s limits.

You must understand that umbrella liability insurance doesn’t cover any kind of claims. It merely supplements the funds of your general liability or public liability insurance policy.

Umbrella liability insurance kicks in if your general liability or public liability insurance can’t fully cover a claim. You can also use this when you have exhausted their limits. Here’s an example for you to understand:

• Someone sued your theater for injuries and is demanding $1 million. Your general liability insurance has zero funds because you’ve already used it to cover a previous lawsuit. In this case, umbrella liability insurance will provide an additional $1 million so that your general liability insurance can cover the claim

• Your theater damaged someone’s property. Now, the person is demanding you reimburse his loss which costs $2 million. Your general liability insurance has $1 million. In this case, umbrella liability insurance will cover the excess.

Workers Compensation Insurance for Theaters 

Your theater can’t run without employees. Someone must maintain equipment and lighting, attend to the sound system, keep the premises clean, man the counter, etc.

Since your theater will employ three or more people, getting workers compensation insurance is a smart thing to do. Let's look at the situations in which either your concession stand workers, ticket takers, or other employees within the facility get hurt while dispensing their duties:

• The technician can fall from a height while maintaining or installing lights 

• The utility personnel of your theater can slip, trip, and fall while cleaning 

• Get cut or burned while preparing food 

• Muscle injuries due to repetitive tasks 

You can use workers compensation insurance to cover the following costs when an employee gets hurt due to a work-related accident:

• Ambulance and emergency treatment-If an accident happens at your theater, and an employee needs to be rushed to the hospital, workers compensation insurance will cover ambulance and emergency treatment expenses

• Hospitalization-The workers' compensation insurance of your theater can cover bills if an employee is admitted to the hospital after sustaining an injury caused by a work-related accident

• Medication-Workers compensation insurance gives money your employee can use to buy prescription medicines for a work-related injury to heal

• Rehabilitation-In case of impairment, workers compensation insurance covers retraining costs, therapist fees, and other rehabilitation expenses

• Lost wages-Your theater must cover the lost wages of an employee who can’t work due to a work-related injury. Workers' compensation insurance allows you to satisfy this responsibility without incurring losses. Through workers comp, your theater’s employee will receive a weekly allowance equal to two-thirds or  67% of the average weekly pay

• Death benefits-If a work-related accident resulted in the death of an employee, your theater can use workers' compensation insurance to cover funeral expenses and give an allowance to dependents

Things You Should Know About Workers Compensation Insurance

Your theater must have workers' compensation insurance because it will employ one or more people. And depending on which state your theater is operating, there’s no exception even if those working for you are family members. 

Most theaters use workers' compensation insurance to cover the injuries of employees that result from work-related accidents. Nonetheless, you need to know that the policy can also be used to cover a disease of an employee proven to be work-related. 

So how long does workers' compensation insurance cover your employee? Usually, your employee will receive money from workers comp for 3 to 7 years or if he or she is fit enough to work. 

Last but not least, remember that workers' compensation insurance doesn’t cover volunteers, unpaid interns, and other workers who are not part of your business’s payroll. 

Consequences Of Not Getting Workers Compensation Insurance for Your Theater 

Workers' compensation insurance is an expensive policy.  You will spend thousands on premiums. Nonetheless, paying the hefty cost of workers comp is better than facing the underlying problems of not having it. 

Your theater will face penalties if authorities find out that it doesn’t have workers' compensation insurance. Penalties differ from state to state. 

That said, let’s take a look at the penalty for not having workers' compensation insurance in the most recommended states for theater companies:

• California-Theaters with no workers compensation insurance face a misdemeanor charge punishable by a $10,000 fine or a one-year imprisonment in the county jail 

• New York-New York authorities impose a $2,000 fine for every ten days a theater operated without workers' compensation insurance

• Illinois-Deliberately refusing to get workers' compensation insurance is punishable by a $10,000 minimum fine. Officers or owners of the theater can also be responsible for indemnification

• Georgia-Theaters without workers' compensation insurance in Georgia pay $500-$5,000 for each violation. Owners and executives can also face a misdemeanor charge punishable by a one-year imprisonment

• Maryland-In Maryland, theaters that operate without workers' compensation insurance face a $10,000 fine. If such theaters are registered as corporations, executives will bear the responsibility of paying the penalty

Theater Commercial Property Insurance

For your theater to be popular among viewers, you've got to go an extra mile to ensure their comfort, enjoyment, and safety by keeping the building and equipment in good shape. You also need to mitigate losses in case your theater experiences business property damage or loss because of the following perils:

• Fire

• Theft

• Vandalism

• Malicious mischief

• Sinkhole collapse

• Volcanic action

• Snow

• Hail

• Winds

• Vehicle

• Aircraft

• Riot

• Civil commotion

• Sprinkler leakage

The primary function of commercial property insurance is to protect your theater’s building. It will:

• Reimburse financial losses if your theater’s building sustains damage due to the perils mentioned above  

• Reimburse financial losses when your theater’s building experiences complete destruction because of the above-mentioned causes 

This type of theatre company insurance comes with contents coverage. Contents coverage will recoup losses if seats, decor, furniture, and valuable items inside your theater become damaged or destroyed. 

You can decide to add equipment breakdown coverage to commercial property insurance. Equipment breakdown coverage will cater to replacement or repair expenses if your theater’s lighting, sound system, computers, and other equipment is physically damaged due to:

• Operator error

• Electrical surge

• Electrical shorts

• Mechanical or electrical defects 

So how much money can you get from commercial property insurance? The policy provides a $10,000-$25,000 minimum coverage for your theater’s building and contents. Equipment breakdown coverage, on the other hand, provides $2,500-$5,000 for repair or replacement expenses. 

An Important Thing To Remember 

Always go over the fine print of your commercial property insurance. Some business properties or perils won’t be covered by the policy and they will be named as exclusions. In such a case, you need to add riders or endorsements to commercial property insurance, so that it covers exclusions. 

For instance, commercial property insurance always excludes floods, earthquakes, and mudslides. And to cover these perils, you need to purchase flood damage, earthquake, and mudslide endorsements.                                                       

Theatre Cancellation Insurance   

Suppose you have scheduled streaming at your movie theater, and you can no longer host the event due to unavoidable situations. In that case, you want to invest in a theatre cancellation insurance. This policy protects you from irrecoverable costs and expenses you might incur as a result of the cancellation. Some providers might be able to reimburse you for the ticket fees. 

Theater Commercial Auto Insurance 

Commercial auto insurance is available if your theater owns a vehicle for hauling equipment and transporting employees to or from work. These are the coverages your theater can get from this type of movie theater insurance policy:

• Auto liability coverage-Auto liability coverage will cover medical treatments and reimburse losses if your theater’s vehicle caused an accident that resulted to injuries or property damage of third parties 

• Uninsured/underinsured motorist coverage-Uninsured/underinsured motorist coverage kicks in if your theater’s vehicle gets involved in an accident caused by a driver who isn’t insured or doesn’t have enough insurance. It will pay the medical treatments and refunds for property damage the driver at fault would’ve paid you

• Medical payments coverage-Medical payments coverage will pay the medical expenses, hospitalization, and funeral costs of the driver and passengers in the event of a vehicular accident. Coverage applies regardless if the accident was the fault of your theater’s vehicle or not 

• Personal injury protection-Personal injury protection also kicks in if your theater’s commercial vehicle got involved in an accident or caused one resulting in the injuries of the driver and passengers. But unlike medical payments coverage, it doesn’t only cover funeral costs, medical expenses, and hospitalization but also lost wages, medication, and rehabilitation

• Physical damage coverage-Physical damage coverage will take care of costs if the parts of your theater’s vehicle needs to be repaired or replaced after sustaining damage due to a collision, fire, theft, vandalism, and other covered perils 

Important Points To Remember About Commercial Auto Insurance 

The auto liability coverage of commercial auto insurance will not help if your theater’s vehicle is involved in a criminal activity and caused an accident.

Commercial auto insurance offers personal injury protection coverage if your theater is in a “no fault” state. On the other hand, medical payments coverage is what’s available in a “fault state”.

Theater Insurance Cost  

It is prudent to mention that there is no fixed cost for theater insurance. Each insurance carrier will tend to provide its own set of criteria when it comes to determining theater insurance cost. 

On average, general liability insurance for theaters cost $32 per month or $387 per year for a $1 million general liability insurance policy. Commercial property insurance attracts a cost of $700 per year, while worker's compensation will cost you $1,200 in annual premiums. 

In addition, take a look at this table that shows the rates of the best theater insurance companies:

Compare quotes to find the best protection at the most reasonable rate. Click the “Get Quotes” button on this page to start.