Recording Studio Business Insurance
Getting business insurance for your recording studio is essential.
A recording studio needs protection against various types of losses that may arise from unexpected events such as property damage, theft, equipment failure, and other hazards.
For example, recording equipment could fail, causing loss to the artist who may in turn seek compensation for their losses.
We’ll help you find the most personalized and affordable coverage for your unique business.
Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.
Best Insurance for a Recording Studio Business
General liability insurance is — generally speaking — one of the most important insurance policies for your recording studio.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
Other common types of insurance a recording studio may wish to purchase include:
- Cyber liability insurance: With the increasing use of technology in the music industry, studios are vulnerable to cyber attacks and data breaches. Cyber liability insurance can help protect against financial losses due to hacked computers or stolen digital files containing sensitive information.
- Employment practices liability insurance (EPLI): This type of coverage protects businesses from claims made by employees regarding discrimination, harassment, wrongful termination and other employment-related issues.
- Errors and omissions (E&O) insurance: Protect the studio from claims alleging negligence or mistakes in providing services. For example, if a client accuses the studio of producing subpar recordings or missing an important deadline, professional liability insurance can help cover legal fees and damages.
Depending on your budget, there are two avenues for purchasing business insurance for your recording studio:
- Traditional brick and mortar insurers: Typically require in-person consultations with an agent who will assess the risks involved and advise on appropriate coverage options. Pricing can be a bit higher as these insurers have higher overhead.
- Online insurers: Offer quick quotes and policies that can be purchased entirely online without any face-to-face interaction. Because they don’t need satellite offices and use an online operations model, prices are lower compared to traditional insurers.
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Cost of General Liability Insurance
The average recording studio in America spends between $300-$600 per year for $1 million in general liability coverage.
Compare the average cost of general liability insurance for a recording studio business to other professional industries using the graph below.
Several factors will determine the price of your policy. These include your:
- Location
- Deductible
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner’s policy (BOP) rather than as a standalone policy.
A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
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Common Situations That General Liability Insurance May Cover for a Recording Studio Business
Example 1: During a recording session, an artist accidentally trips over some cables and falls, injuring herself. The injuries are significant enough to require a trip to a medical facility for treatment. A general liability insurance policy will likely cover the costs of treating her injuries.
Example 2: One of your employees is bringing a box of new recording components into the studio when he accidentally drops the box on the foot of a visitor, causing that visitor injury that requires medical care. The visitor decides to take legal action against your business. A general liability insurance policy would likely cover some of your legal costs, including the cost of damages should the court decide against you.
Example 3: Most recording studios do not think of their parking lots as areas of potential financial risk, but they can be if they are poorly maintained. If a visitor is injured in the parking lot due to poor maintenance and takes legal action against your business, your general liability insurance will pay the fees related to the accident.
Other Types of Coverage Recording Studio Businesses Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some of the most common types of coverage:
Data Breach Insurance
The work you produce with different artists often has significant value. Unfortunately, a data breach could result in the theft of that work and the loss of income for your clients. Should they decide to take legal action against you for the losses they sustain due to the data breach, your data breach insurance policy will likely help to cover some of those costs.
Commercial Property Insurance
Your recording equipment is probably the biggest investment you have made in your business. If something happens to your equipment, such as being damaged in the event of a fire or other disaster, you want to know that you can replace it as quickly as possible and get back to business. Commercial property insurance is designed to help you cover the costs of replacing equipment for your business and any products you sell.
Home-Based Business Insurance
If you are running your recording studio out of your home, it is possible that your homeowners’ insurance may not protect you against accidents related to your business. A home-based business insurance policy is a good way to add the coverage you need to protect your business from unexpected costs.
Workers' Compensation Insurance
If your studio employs anyone to help with the business, then the laws of your state most likely require you to carry workers’ compensation insurance. There are multiple benefits to getting a workers’ compensation insurance policy. You protect your business from legal repercussions by adhering to state law, and you also protect your company against the costs associated with employee injuries or illnesses. If they are hurt on the job, your insurance policy will likely cover the cost of treatment and lost wages.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it shouldn’t be your only defense.
Here are several things you can do to better protect your recording studio business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up an LLC or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Maintain your corporate veil.
Recording Studio Business Insurance FAQ
Yes, absolutely. You will need to first get a quote from an online business insurance provider like Next Insurance. Next allows you to then purchase a policy immediately and your coverage will be active within 48 hours.
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Yes you need business insurance before you open. This is because you’ll have people onsite, yourself included, so you’ll want to make sure you’re protected. Looking into the costs ahead of opening also gives you a blanket-view of what you can expect to pay to protect your business. This can be factored into your business planning.
Not necessarily. Certain exceptions may be written directly into your recording studio business insurance policy, and some perils may be entirely uninsurable.
Yes, an LLC is meant to create a legal barrier between your business and your personal assets and credit. If you haven’t formed an LLC yet, use our Form an LLC guide to get started.
An LLC doesn’t protect your business assets from lawsuits and liability– that’s where business insurance comes in. Business insurance helps protect your business from liability and risk.