Last Updated: May 23, 2024, 8:22 am by TRUiC Team

Arcade Business Insurance

Getting insurance for your arcade is essential.

Arcades need to be protected against claims involving things that could cause financial loss and are likely to happen, such as bodily injury or property damage.

For example, a leak in the roof may cause water damage to some arcade cabinets, or a patron could injure themselves while playing on a faulty dance machine.

We’ll help you find the most personalized and affordable coverage for your unique business.

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Recommended: Next Insurance is dedicated to matching small businesses with the right policy at the best price.

Best Insurance for an Arcade

General liability insurance is — generally speaking — one of the most important insurance policies for arcades. 

Some of the risks general liability insurance covers are:

  • Bodily injury
  • Property damage
  • Medical payments
  • Legal defense and judgment
  • Personal and advertising injury

In addition to general liability, many arcades often find it useful to leverage several other insurance policies to fully protect themselves from common risks they may face. Some of these include:

  • Business interruption insurance
  • Workers’ compensation
  • Commercial umbrella coverage
  • Data breach insurance

Your arcade will find itself with two distinct options when looking to acquire business insurance, each with its own unique pros and cons:

  • Traditional brick-and-mortar insurers: Experienced providers based in a physical location, these insurers have garnered a reputation for being reliable and a safe option for businesses, though their higher overhead costs can mean they are costlier.
  • Online insurers: Modern providers that take advantage of the power of AI to be able to offer reliable quotes without an insurance agent. They have become the preferred option in recent years since they can generally offer very personalized insurance quickly, conveniently, and cheaply.

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Cost of General Liability Insurance

The average arcade in America spends between $300-$800 per year for $1 million in general liability coverage.

Compare the average cost of general liability insurance for an arcade 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.

Graph showing average price of general liability insurance prices per industry

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Discover the best coverage at the lowest rate in our cheapest business insurance review.

Common Situations That General Liability Insurance May Cover for an Arcade

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Example 1: The most common type of accident to take place in an arcade is a trip and fall incident. If one of your customers becomes injured during a game of laser tag or as they race from one game to another, you could be found liable for damages. With the help of general liability coverage, you can protect your customers in the event of an accident involving your specialized arcade equipment.

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Example 2: While many business owners don’t consider their parking lot to be a particularly important area, it is actually a very common accident site. As visitors try to maneuver around other vehicles, bikes, and pedestrians, there's great potential for an accident to take place. And if the accident is a result of poor maintenance, general liability insurance can help to cover the cost of damages.

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Example 3: Arcades are a great hangout for people of all ages. But it’s important to keep in mind that some gamers can be extremely competitive and may become angry or frustrated when things don’t go their way. In an arcade, there is an increased risk of customers hurting themselves and others when rattling a machine or losing their temper.

Other Types of Coverage Arcades 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:

Business Interruption Insurance

Arcades are not only a place for fun and games, but they are also home to many different pieces of valuable specialty equipment. If this equipment becomes damaged or destroyed in an incident, the business income that you rely on could be lost. With the help of business interruption insurance, you can help to cover the loss of business income that you will incur as you suspend operations to repair or replace your equipment.

Workers’ Compensation

Workers’ compensation insurance is another important insurance coverage that will help to protect your team. In fact, workers’ compensation coverage is required in many states for any business that has part-time and full-time employees. This type of insurance coverage is designed to cover your employees’ wages and medical expenses if they get sick or become injured on the job.

Commercial Umbrella Coverage

In the modern world, even small businesses are at risk of accidents and actions that could result in large liability judgments against them. And while your general liability coverage will protect against most of these cases, an umbrella policy provides you with an extra layer of protection that goes above any other policies you may have in place. This is especially helpful in situations where damages related to an incident exceed your primary policy limits.

Data Breach Insurance

Many arcades have return customers who like to keep important payment information on file. If you have a loyalty club or keep important customer information in your computer system, your customers’ personal and financial information could be at risk of a cyber attack. With the help of data breach insurance, you can protect your business and customers from a system breach that results in stolen data.

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 arcade:

  • 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.

Arcade 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, arcades are generally encouraged to obtain appropriate business insurance before they begin operations to make sure they are adequately protected against potential risks and prevent financial losses.

For some arcades, it may even be a legal requirement to hold insurance before launching the business if certain criteria are met (e.g., if you have employees or use company vehicles for your arcade).

Not necessarily. Certain exceptions may be written directly into your arcade 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.