Escape Room Insurance

Business insurance is essential and often mandatory for escape rooms.

Here are the insurance policies you likely need to run your business:

• General liability insurance covers accidental bodily injuries and property damage at your escape room. You might need it to sign a commercial lease, get a business loan, operate a franchise, or get a business license or operating permit in some areas.
• Workers' compensation insurance is required in most states, including New York and California, as soon as you hire your first employee. It pays for medical treatment if a worker is injured on the job and provides them with disability benefits while they're recovering.
• Commercial auto insurance covers accidents involving business vehicles. Almost every state requires this coverage for vehicles owned by a business.

Additionally, you'll need to make sure you're in compliance with fire safety codes, emergency exit regulations, and other safety standards, including those issued by the National Fire Protection Association (NFPA), the Occupational Safety and Health Administration (OSHA), and the International Building Code (IBC).

Escape rooms face a wide range of risks. The most common insurance claims for escape rooms involve:

• Third-party accidents. General liability insurance covers accidents that injure customers or damage their property, making it the most important policy for an escape room. It'll pay for medical costs if someone slips and suffers an injury or legal costs if your business is sued over an accident.
• Property damage. Fires, storms, and theft are among the most common risks for small businesses. Commercial property insurance helps pay for damage to your office, your puzzle rooms, and elaborate sets and equipment.
• Negligence claims. If someone claims your staff failed to properly explain safety rules or did not respond to a participant in distress, your business could face a costly professional liability lawsuit.
• Worker injuries. Even if it's not required by law, it's a good idea to carry workers' comp due to the high cost of medical treatment. Sole proprietors may choose to carry this coverage, as health insurance won't cover injuries related to your job.
• Data breaches. Cyber incidents are increasingly common and costly, which makes cyber insurance essential for any business that stores personal information. It's also called data breach insurance.

Some of the top factors that affect the cost of escape room insurance include:

• Location: Localized factors such as crime rates, healthcare costs, foot traffic, risk of natural disasters, and property values can impact your insurance premiums.
• Safety measures: Insurance companies may offer lower rates to escape rooms that have sprinkler systems, proper exit signage, unlocked emergency doors, and training programs for game masters.
• Value of property and equipment: It'll cost more to insure an escape room with expensive sets and audio/visual equipment than a basic puzzle room setup.
• Annual revenue: In general, businesses that earn more revenue are associated with costlier claims, which means they pay more for insurance.
• Number of employees: A bigger workforce means an increased risk of accidents and injuries, which raises the cost of general liability, workers' comp, and similar policies.
• Coverage limits and deductibles: You can save money on insurance by opting for lower liability limits or higher deductibles on your policies, but make sure it's enough to cover a potential claim.
• Claims history: An escape room that has filed insurance claims in the past will cost more to insure than one with a clean claims history.

A strong focus on risk management helps your business avoid incidents and subsequent claims, which helps keep your rates low. As an example, escape rooms often require participants to sign liability waivers to reduce the likelihood of a claim.

Owners of escape rooms and puzzle rooms often invest in the following insurance products to protect against unexpected out-of-pocket costs:

• Commercial property insurance covers your office, escape rooms, sets, and equipment in the event of a fire, storm, or other damaging incident.
• Product liability insurance pays for legal defense costs if a customer is harmed by merchandise sold by your business.
• Business interruption insurance helps escape rooms recover from a forced closure due to a fire or other covered property claim. It's also called business income insurance, as it offsets your lost income as well.
• Equipment breakdown insurance provides funds to repair or replace equipment that suffers a mechanical or electrical failure, such as an HVAC system that breaks unexpectedly.
• Commercial crime insurance reimburses your business or your clients in the event of theft or fraud. One common type is a fidelity bond, which covers criminal acts committed by employees.
• Liquor liability insurance covers legal costs if a participant becomes intoxicated at your escape room and goes on to harm someone or damage their property. It's essential if your business sells or serves alcohol.

Our agents can help you find any specialty insurance policies you may need and answer any questions about coverage.