Recording Studios Insurance – What Kind and at What Cost

Whenever you budget the expenses of your business, recording studios insurance must be near the top of the list because you can’t always know exactly what is going to happen in the future.

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With the protection provided by insurance against accidents and all the other types of insurance we will tell you about, you can protect your business and yourself in case something unwanted happens.

Like any business owner, for your recording studios enterprise, you must consider how much financial liability you are taking on.

Business Insurance for recording studios

If your recording studios business runs without proper insurance, you are taking a giant chance not just of losing some money but of a total wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the results of their actions. 

In this article, we are giving very general guidelines for small businesses to highlight what the main kinds of insurance that you need are, and where available, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your recording studios business?

What this means, for any recording studios business owner, is that if some company claims that your work caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your recording studios business is not sheltered by laws in the same way as states are, where legislation can place a “cap” on the maximum level of liability.

In some states, like Montana, there are specific monetary levels that limit the amount a judge can award in any case against the state.

In a court case, it’s purely the duty of the jury to award whatever amount they deem appropriate, even sometimes giving a person more than they have sued for.

When you are running your recording studios operations, you can’t avoid responsibility for the results of your actions.

Even more importantly, unless you have spent up-front the money necessary to have your business running as a corporation, all of that liability belongs to you alone.

What does recording studios insurance protect you from?

For your recording studios business, the most important sorts of insurance are intended to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some official kinds of insurance that various states require.

In the next few paragraphs, we will explain the most important points any recording studios business owner should consider when negotiating the insurance needed.

The main types of insurance for your recording studios businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any recording studios business is dealing directly with members of the public, and that means you generally have the danger that some accident can happen to them bodily or else something of theirs can be ruined.

In such a case, they can demand compensation.

General liability insurance policy for your recording studios business insures you against claims coming from injury to customers or damage to their property.

It protects your recording studios business from the claims themselves and in addition to any follow-on court costs and legal fees of the lawsuits.

In many cases, it should help you to qualify for extra business from city and state organizations, where contracts require proper liability insurance.

The normal level of general liability insurance for your recording studios business would be with a cap of $1 million for a single claim and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your recording studios insurance operations.

Professional liability insurance for your recording studios business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your recording studios business for them, you can quickly face a court case.

Even if the case against you is judged in your favor, the cost of defense can be large, and the impact on your reputation can be damaging.

Most small recording studios business should have enough professional liability insurance to cover a single claim of $25,000, with annual cover of $50,000.

See the table in the cost of recording studios insurance section below for average prices of professional liability insurance for your recording studios operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that buyers may claim that the results didn’t meet your description of function, or that your guidance was basically incorrect.

You need to be aware of the explicit laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for damages caused by products claimed to be defective.

To cover yourself against any following lawsuit, you need Product liability insurance for recording studios

Only you can know exactly how much insurance you need.

Best advice is to consult with experienced insurance agents, brokers or company representatives for help.

Commercial insurance

Commercial vehicle insurance for your recording studios business

Be careful! – practically all policies for private vehicle insurance do not cover any occurrence like theft or accidental damage when the van is being used for business purposes.

The proper way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a proper commercial vehicle insurance package.

Commercial car policies insure the value of any vehicle in case of accident, malicious damage, fire, or theft.

As well, in case of any accident, the van itself, the content and any legal bills, medical expenses, and property damage is insured if your van is involved in an accident.

Most states, other than Virginia and New Hampshire, insist on this type of insurance.

The necessary value of the insurance depends on the depreciated value of the vehicle, and your declared level of cover of contents. 

Tools and Equipment insurance

Since your recording studios business needs specialized and expensive equipment, you will realize how much it can cost to replace it in case of any damage, loss, or theft.

The tools may be subject to malicious damage, deliberate fire, theft, other such unforeseen acts.

In addition, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such specialized gear quickly out of your own pocket, you must have full-level equipment insurance so that you can immediately buy everything needed to keep your recording studios business running.

It is impossible to advise how much equipment insurance you need – it’s essentially dependent on how much you have invested in your recording studios business’ equipment.

Commercial Property insurance

Any recording studios business that owns or rents space in a building must have a commercial property insurance policy.

If you own the space, you probably have a substantial capital investment, along with a big liability if there’s a mortgage.

Any physical building location should carry insurance coverage for the value of the premises and contents against unexpected occurrences like fire and storms, and against criminal damages like theft and vandalism.

If your recording studios business works in areas of high risk, like California or North Carolina, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Washington, where extreme cold snaps can cause damage to outer coverings of recording studios business premises, there is a need for more extra cover than in warmer climes.

Whereas the level of cover depends mainly on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of recording studios insurance section below to give some indication of the average prices per million dollars of property insurance for your recording studios business.

Temporary insurance by month, week or day for your recording studios business

Is your recording studios business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for recording studios – are special policies where you can cover a nominated period when you want to be covered.

By only paying for that period of cover, you will save by having lower premiums but still having adequate risk cover.

The essential feature of short-term insurance is that you buy the cover for a defined period – a designated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of higher business activity, get the existing cover raised.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your recording studios business

You have the option to combine a few of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP combines commercial property and public liability insurance by packaging these coverages into one insurance policy, which can save you money.

BOP insurance will shield you if any claims of injury or property damage are made.

It is frequently the right choice for small and medium-sized recording studios businesses, such as yours.

There are some limits that will determine whether BOP is suitable for your own business.

BOPs cannot cover your professional liability or commercial vehicle policies.

Also, the size of your business will rule whether you are allowed to take out BOP cover.

The usual business that can take out a BOP policy must have fewer than one hundred employees, and under five million dollars in annual turnover.

Plus, you must separately take out the mandated worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your recording studios business employees

In many states, it is mandatory to have workers compensation insurance when your recording studios business has one or more employees.

Workers compensation insurance covers the operation against any costs that arise if any hired hand experiences an injury or becomes sick as a result of work.

The benefits include medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s requirements in this regard can leave you as the employer required to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only authorize coverage from the government-run monopoly state funds.

In these states, you may not get your workers compensation obligations from private insurance corporations.

Workers compensation rates are computed based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must see the relevant authorities in your state.

Average costs of these types of insurance

Although every recording studios insurance requirement is unique, there are enough examples of usual quotes from insurance companies for us to give appropriate guidelines, including what are the cheapest rates offered.

Of course, you should always check with a broker what’s relevant for your business.

The list below is of annual premiums we have collected for the main types of insurance your recording studios businesses needs.

Types of insurance Price range
Public liability insurance $385 – $785
Equipment insurance $310 – $1090
Product liability insurance $335 – $765
General liability insurance $675 – $985
Commercial insurance $1145 – $2615
Commercial vehicle insurance $1525 – $2590

Cost of insurance for your recording studios operations depends on many different factors.

We have calculated these figures for small independent recording studios businesses.

In larger states like Texas, premiums are generally about 20%-30% higher than national averages, but in smaller states like Oregon, they usually are about 20%-30% lower.

The location and size and type of your recording studios business can have a big effect on the cost of different policies.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

In addition you can let the internet do the work for you by searching for insurance companies near where your business is located.

Another useful source of information is the local Better Business Bureau in your town.

FAQ

What is small business insurance for recording studios operations?

This is a wide term used to describe common insurance policies designed to protect recording studios business owners from risks like bodily injury, property damage, claims of negligence.

Does my recording studios business have to have insurance?

Some of the kinds of insurance are not mandatory for you to operate your business, but they can protect you from risks in your business operations.

Some other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small recording studios business insurance policy cover?

Liability insurance provides coverage against lawsuits or claims filed by a client for bodily injury, property damage, or negligence.

The precise cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for recording studios insurance.

How much will recording studios business insurance cost?

On top of the size of the business, several other factors, such as location and claims history, are used to determine your policy’s cost.

You should talk to professional insurance agents and brokers, or insurance company representatives.

You can search for more information insurance for recording studios, in the search box below, and follow the relevant links.

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