Casinos have it all: The sights, the sounds, the lights, the laughter, the cheers when a guest wins big at the roulette wheel, and the groans when the house takes all.
Casino owners create an environment that captivates, fosters excitement, and always leaves guests ready for their next visit.
With great power comes great responsibility – and risk. With the right insurance and risk management solutions, you can protect your business, employees, and customers.
In this guide, we’ll cover:
- Who needs casino and gaming insurance?
- Why do casinos need insurance?
- What kind of insurance do casinos need?
- How much does gaming insurance cost?
- Do casinos need alcohol surety bonds?
- Managing risk as a casino
- Choosing a risk partner that understands your casino
Who needs casino and gaming insurance?
Casino and gaming insurance is essential for owners and operators in the gaming industry. This includes:
- Card rooms
- Online gaming platforms
- Any establishment that offers gambling activities
Why do casinos need insurance?
Casinos need insurance to protect them from financial, legal, and reputational risks.
Businesses face a variety of risks in the gaming industry. Two of the biggest: theft and fraud.
Casinos deal with significant amounts of cash, chips, and valuable assets. This exposes you to the risk of theft by your own employees or third parties.
Other risks in the gaming industry include:
- Fraudulent activities like counterfeit currency and rigged games
- Liability for guest grievances
- Compliance with gaming regulations
- Business interruption due to natural disasters or power outages
- Reputation and brand damage
Casino insurance can help you safeguard your assets and mitigate potential liabilities.
What kind of insurance do casinos need?
There are many types of insurance that could benefit your business. That’s why it’s important to follow a consultative approach to understand the full scope of your exposures. Then, your agent can help identify insurance solutions to mitigate your risk.
The policies we typically recommend for casinos are:
- General liability insurance
- Workers’ compensation insurance
- Business interruption insurance
- Commercial property insurance
- Crime insurance
- Cyber insurance
- Employment practices liability insurance
- Liquor liability insurance
- Prize indemnity insurance
Let’s explore each policy and when your business might need it.
Required insurance for casinos
Legal insurance requirements are dictated by your state’s Department of Insurance, gaming control board, and lease contracts. Thus, the coverage required for your business depends on which state(s) you operate in.
Your insurance agent can help you identify the specific requirements for your business.
General liability insurance
General liability insurance covers claims that your business caused third-party injury or property damage. It helps protect your company from financial losses due to lawsuits or other legal claims stemming from your operations such as a trip and fall, illness, or even personal injury.
When we recommend general liability
Some states require certain types of businesses to carry general liability coverage. Even if not required, GL provides fundamental protection for your business. We recommend it for every business that interacts with the public or customers.
Workers’ compensation insurance
In most states, businesses with a certain number of employees must carry workers’ compensation. Workers’ comp covers medical bills and lost wages for employees who are injured or become ill on the job.
When we recommend workers’ comp
This no-fault insurance policy protects you and your employees from the financial impact of workplace injuries. Each state has different workers’ comp requirements, but we recommend it for most businesses with employees.
Essential casino insurance policies
These policies are likely not required, but we consider them essential coverage for casinos.
Business interruption insurance
Business interruption coverage, also called business income insurance, protects businesses against financial losses due to unexpected interruptions to their operations. It typically covers:
- Lost profit
- Rent or mortgage payments
- Ongoing business expenses
Examples of covered interruptions include natural disasters, power outages, and unforeseen equipment failures.
When we recommend business interruption insurance
Because disrupted operations can significantly impact a casino’s bottom line, we recommend business interruption insurance for any business in the gaming industry.
Commercial property insurance
Commercial property insurance protects your building and physical property from events like:
- Hail, windstorms, lightning
- Natural disasters
It covers financial losses from property damage, lost income, and other expenses while recovering.
When we recommend commercial property
We recommend commercial property coverage for most businesses that own or rent property, including buildings, equipment, inventory, and supplies.
Crime insurance covers losses caused by criminal acts like:
These acts could be by your own employees or third parties. It covers the costs of investigations, legal defense, and judgments.
When we recommend crime insurance
Crime insurance is one of the most important policies for businesses in the gaming industry, since they’re vulnerable to crimes like theft and fraud.
Cyber insurance covers losses caused by a security failure or data breach. It’s beneficial for any business handling customer data. It covers a range of expenses, like:
- Credit monitoring
- Public relations
- Legal fees
- Regulatory fines
- Business interruption
- Deceptive and fraudulent instruction
When we recommend cyber liability
Nearly every business is exposed to cyber risk. We recommend cyber insurance for any business that uses technology to conduct business or store sensitive information.
Employment practices liability insurance
EPL insurance covers employee claims of wrongful employment practices like discrimination, harassment, or wrongful termination. It covers:
- Legal defense costs
When we recommend EPL
We often recommend EPL insurance for businesses with larger numbers of employees, but any company with employees faces the risk of employment-related claims.
Liquor liability insurance
Liquor liability insurance protects you from legal claims and financial losses arising from alcohol-related incidents. This essential coverage is required by many states and commercial leases.
It typically covers:
- Legal defense costs
When we recommend liquor liability
In most states, a liquor license and liquor liability insurance are legally required if you serve alcohol to be consumed on the premises.
Even if your business’s primary purpose is not serving alcohol, if you serve it at special events, you should consider liquor liability coverage.
Prize indemnity insurance
Prize indemnity insurance, also called insured prize insurance or contest insurance, is a specialized policy that protects gaming establishments that offer high-value prizes through:
- Other special events
The policy covers the cost of the prize if a participant wins.
When we recommend prize indemnity insurance
For events that often involve significant prizes, insured prize coverage can offer financial protection and peace of mind when it comes to budgeting.
How much does gaming insurance cost?
Insurance companies calculate your premiums using several factors:
- Business size and revenue
- Claims history
- Coverage limits
Because insurance costs can vary, it’s important to work with a risk manager to find the best solution for your business. Businesses with complex risk profiles will find the most value from partnering with an independent agent that will help them proactively manage risk for long-term success. Learn more about the benefits of integrated risk management.
Do casinos need alcohol surety bonds?
Like insurance, surety bond requirements depend upon your state’s legislation. Many states require alcohol bonds as part of the licensing process.
If you serve alcohol, you may need an alcohol bond. The best way to find out if your business needs a bond is to rely on your agent’s expertise.
What are alcohol bonds?
A bond is a three-party contract between you (the principal), the requiring party (the obligee), and the surety provider. If you fail to perform according to the contract terms, the surety will step in to fulfill your obligation. You will remain liable and will have to repay the surety provider.
Alcohol bonds, also known as liquor bonds or alcohol beverage control bonds, are a form of surety bonds that guarantee compliance with the liquor laws and regulations governing your business license.
Managing risk as a casino: 5 common risks
1. Theft and fraud
Because casinos deal with large amounts of cash and valuable chips, some of their biggest concerns are theft and fraud – by employees or outsiders.
Most casinos have robust systems in place to mitigate this risk, but there’s always room for improvement.
To prevent theft and fraud:
- Regularly assess security protocols like surveillance systems, access controls, and employee background checks
- Conduct audits and reconciliations of cash and assets to detect internal theft or fraudulent activities
- Get sufficient crime insurance coverage
2. Liability claims
Hosting hundreds or thousands of guests on your property can expose you to claims of liability for injuries, assaults, negligence, or unfair gaming practices.
If you’re found liable for a customer or employee injury, you could be on the hook for medical expenses and other damages.
To mitigate the risk of liability claims:
- Keep your facilities safe and well-maintained by conducting regular inspections and addressing potential hazards promptly
- Provide thorough staff training on safety, responsible alcohol service, and de-escalation strategies
- Get the right general liability, workers’ compensation, and liquor liability insurance coverage
3. Regulatory compliance
Casinos must adhere to strict gaming regulations and licensing requirements. Failure to comply can lead to penalties, fines, or even loss of your license.
To minimize compliance risks:
- Stay up-to-date with the latest laws and regulations in your jurisdiction
- Establish systems to ensure compliance with reporting, auditing, and record-keeping obligations
- Partner with a risk advisor specializing in the gaming and hospitality industry
4. Business interruption
Cash flow is king for casinos – and natural disasters, power outages, or other unexpected events can disrupt operations and lead to financial losses.
To prepare for the unexpected and minimize these losses:
- Create a comprehensive business continuity plan outlining your responses to various scenarios
- Invest in backup generators and redundant systems to minimize the interruption of these events
- Carry business interruption insurance to minimize financial losses
5. Reputation and brand damage
You rely heavily on your reputation and brand image. Negative incidents like customer disputes, data breaches, or public relations crises can significantly impact your bottom line. They can also take months or years to recover from.
To reduce reputational risks:
- Use strict data security measures to protect customer information, like secure networks and employee cybersecurity training
- Address negative customer feedback and develop a PR crisis management plan
- Protect yourself and your customers with cyber insurance
Choosing a risk partner that understands your casino
To protect the business you’ve worked hard to build, insurance alone is not enough. It’s crucial to identify the most critical threats and make strategic decisions that will allow you to grow your business without disruption.
When it comes to risk, casinos face unique challenges. We’re right there with you – we work in the recreational and gaming industry too. We just happen to be on the risk management side.
When you partner with POWERS, we’re more than your insurance agency. We’re a true business partner invested in your success. Our philosophy combines:
We put programs in place to help you execute your business plans. It’s all about empowering you to mitigate risk and grow your business. That’s the POWERS Promise.