Many people think of insurance as a grudge purchase—something we know we have to pay but aren’t happy about spending money on. Two common reasons are that we’ve been lucky enough to never need our insurance or just believe it isn’t necessary.
However, when the day comes that something occurs that could cause us sizeable financial loss, few things make the situation better than knowing we have insurance. This helps us avoid costly repercussions and gives us peace of mind knowing somebody else is responsible for ensuring money is available to correct the situation.
Casinos, places that profit millions of pounds from punters’ losses, are often considered exempt from insurance. After all, they make enough money to cover any eventuality without making any claims. Or at least, that is the misconception.
The truth is that casinos—both physical and those found online—do have insurance. In some instances, they are even required to have policies in place before they can operate.
Among these insurance policies are some that are commonplace among many types of businesses. However, others are specifically tailored for casinos and protect them in ways that regular policies cannot. Let’s delve into the different kinds of insurance casinos can adopt to protect their business.
Commercial Property Insurance
Physical casinos are among the most popular spots for entertainment. These buildings see thousands of gamblers passing through the door each month. They are also generally sprawled across large sections of land and have almost countless assets located within—from gambling machines to couches in common areas.
Commercial property insurance is the policy that casinos take out to protect all these physical assets. This type of insurance protects casinos against acts of nature, such as natural disasters (policy dependent), vandalism, and fire. As well as insuring the physical structures of the casino, it also provides cover for the items inside the location.
Going one step further, this type of insurance also protects the casino against gamblers who may have nefarious motives for visiting. Should any theft occur in the casino, this policy will cover replacing whatever physical assets were lost due to the robbery.
Liability Insurance
One of the most common lawsuits that casinos deal with, other than those lodged by players unhappy with losing, are those that deal with liability. These instances arise when a player is injured on the casino’s property.
Whether it is a player who misjudged a step and fell or someone who tripped while rushing to their favourite machine, each time a person is injured in a casino, the casino is liable to pay damages. These damages could be medical bills and payment for mental anguish caused by an injury.
Liability insurance protects casinos from these claims and ensures that should anyone injure themselves at the casino, the settlement they receive doesn’t come from casino profits. Instead, the insurance policy pays out the settlement and all parties concerned move forward.
As with commercial property insurance, this policy is generally geared toward brick-and-mortar casinos. However, online casinos also usually take this policy out for their offices to protect themselves against visitor and even staff injuries.
High-Limit Insurance
Because gambling is seen as a speculative risk, resulting in an uncertain degree of loss or gain, many insurers will not protect against income or loss. However, some cater to casinos that offer high-stakes games. These policies are provided to both online and physical casinos.
The policy used for this is called high-limit protection. Insurance in this line protects casinos against massive losses during high-limit games so that, should a player win a significant prize, the casino’s bottom line is not affected.
While each insurer offers its own coverage, some are known to insure losses of up to £134 million. This helps the lucky player get their winnings and ensures that casinos don’t lose so much that they can no longer operate.
Cyber Risk Insurance
While physical casinos also adopt this type of insurance, cyber risk insurance is geared chiefly toward online casinos that operate primarily on servers and face millions of daily attacks against their security systems.
According to the UK Government, 31% of businesses in the country experience a cyberattack a minimum of twice each week. These businesses include anything from charities operating simple websites to those offering money slots from Casinos.com.
As such, casinos spend millions of pounds yearly to ensure their cyber security is impenetrable. These systems are constantly updated to protect against new threats and to safeguard the data of millions of gamblers.
Despite this, security breaches can happen, and when they do, the financial loss for a casino could be devastating. Thankfully, cyber risk insurance policies protect against these losses.
By insuring against cyber threats, these policies cover losses experienced through lawsuits opened by players who have had their personal information stolen and against the cost of reinforcing or even redesigning security systems to ensure a breach doesn’t occur again.
Due to the many attacks that casinos face each day, some countries (such as the US) have made it compulsory to have cyber risk insurance. Failure to have a policy like this could revoke a casino’s gambling license or cause new casinos to be ineligible to receive a permit before opening.
Additional Insurance
The above types of insurance are those most commonly found in the portfolio of any online or physical casino. However, that is not to say that there are no additional types of insurance that these establishments could benefit from.
Ranging from dedicated employee liability that covers long-term employee injuries and supplements worker’s compensation to legal liability insurance that protects against excessive legal fees when dealing with litigation, casinos can—and should—take out whatever they feel is applicable to their business.
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