Background Music Services Insurance

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Background Music Services Insurance Policy Information

Background Music Services Insurance

Background Music Services Insurance. Music services are unique private label radio stations or streaming services that meet the music or soundtrack needs of various commercial ventures by providing customized offerings.

Background music services companies work with clients to develop a unique soundtrack or private label radio station that plays for customers while shopping, while waiting in an office, or when their telephone call is placed on hold.

They may assist clients in choosing appropriate music for advertising a specific product or service as a branding technique. Some solicit clients directly while others work through advertising agencies. The music service company is responsible for obtaining all copyright approvals and paying the appropriate royalties.

Music services for retail stores are probably the most well-known example, but music services may also serve other kinds of companies, such as by playing music in office spaces, elevators, waiting rooms, and on the telephone while customers are placed on hold.

As the mood of a soundtrack or type of music played in a setting can play a crucial role in encouraging customers to make a purchase, music services offer a lot more than simple background music. This booming industry is only growing as it increasingly moves into streaming, and customer-oriented music services can be incredibly successful.

These business also, however, have to consider the financial pitfalls they may face - including those that arrive as a result of unforeseen circumstances like accidents, disasters, and lawsuits. What types of background music services insurance might be needed? Learn more in this brief guide.

Background music services insurance protects businesses from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked background music services insurance questions:


How Much Does Background Music Services Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for background music services businesses ranges from $37 to $59 per month based on location, size, revenue, claims history and more.


Why Do Background Music Services Need Insurance?

On-Hold Music

Music services need insurance for many of the same reasons that lead any other company to pursue the best coverage they can afford - to meet legal requirements and avoid fines, to meet lender conditions, to raise their reputation, and because the right insurance coverage offers your best chance of recovering from the financial losses associated with major perils more easily.

The risks background music services face include those universal to all branches of commerce as well as some unique to this still-growing industry. Your facility could be devastated by an act of nature, such as a wildfire or earthquake, simultaneously causing great damage to your smaller assets, such as important equipment. Theft and vandalism are two more examples of threats that deal a huge blow to your financial health, and accidents are another.

A third party - like a client or vendor - could file a lawsuit against your company for almost any reason, including allegations of bodily injury or property damage, copyright infringement, or professional negligence. An employee could be injured in the workplace under circumstances for which music services could, as an employer, likewise be held liable.

Background music services may be able to handle the costs of minor mishaps on their own, but major perils can be accompanied by such overwhelming expenses that they could threaten the very future of your business. If you invest in the appropriate background music services insurance policies, your business will, on the other hand, find that it is much less painful to deal with the aftermath of a serious incident.


What Type Of Insurance Do Background Music Services Need?

Each business will have unique insurance needs, even within the same industry. What types of coverage background music services should carry ultimately depends on factors like the location where your company is based, the types of clients you provide services to, and the technical aspects of your business, such as the equipment you rely on.

Because of this, it is crucial to talk to a commercial insurance broker who understands your field of commerce. Having said that, some of the most important types of background music services insurance policies will include:

  • Commercial Property: This type of insurance is designed to protect your music service from financial losses if your commercial building and its contents are affected by perils that include acts of nature, (physical) theft, and vandalism.
  • General Liability: A broad form of liability coverage, this kind of insurance will cover your legal costs in case of bodily injury or property damage claims that occur on your premises or as a result of your activities. Your attorney fees and other legal costs can both be covered.
  • Professional Liability: Also called errors and omissions insurance, these background music services insurance policies cover allegations against your company that pertain to your professional performance - like lawsuits filed for violation of intellectual property or failure to deliver services that were already paid for. As with general liability insurance, professional liability insurance covers your legal costs up to a predefined limit.
  • Workers' Compensation: This type of insurance shields you in case an employee suffers a work-related injury or accident, by paying for their medical bills as well as any income they lose as a result of not being able to return to work for a while.
  • Cyber Security: Music services are also likely to need cyber coverage, which will help cover expenses related to electronic attacks or data breaches.

Bear in mind that, while these important kinds of background music services insurance coverage will go a long way toward protecting your business, you may also need other policies. To find out more, consult a skilled commercial insurance broker.


Background Music Services' Risks & Exposures

Elevator Music

Premises liability exposures at the location are limited. Production of soundtrack tapes should be within a restricted area with access to visitors controlled and limited. Visitors must be confined to waiting rooms and designated conference areas.

To prevent slips, trips, and falls, all areas accessible to clients must be well maintained with floor covering in good condition. Exits must be sufficient in number, be well marked, and have backup lighting in case of power failure. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls.

Off-premises exposures are from salespersons working with clients to develop the appropriate sound.

Media professional liability exposures are very high, as there may be allegations of copyright infringement, libel or slander, unauthorized use of names, ideas, or music, actual or implied breach of contract, and personal injury.

The music service is required to secure copyright approval and pay royalties for music produced by others. The level of exposure varies based on the services provided and the contractual arrangements with each client.

Workers compensation exposures are light. Potential injuries from working with computers include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations.

Hearing impairment can result from working with music at high decibel levels. Work with electrical equipment may result in shocks and burns.

Off-site exposures include slips, falls, and back injuries due to lifting equipment, electrical injuries, automobile accidents, and contact with clients.

Property exposures are moderate. Ignition sources include electrical wiring, heating, and air conditioning systems. Wiring must be well maintained with sufficient capacity to handle load requirements as both the amount of equipment and demand may increase due to technology.

While many music files can be downloaded, the music service may still have a CD or vinyl records library. Electronic equipment and musical recordings are susceptible to damage by fire, smoke, and water. Fire extinguishers and automatic fire extinguishing or suppressant systems should be of a dry chemical nature and not water based.

Audio equipment is valuable and may be a target for thieves. Appropriate security controls should be taken, including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.

Equipment breakdown exposures are moderate due to the reliance of the service on electronic equipment and other apparatus.

Inland marine exposures include accounts receivable if the service offers credit, audio equipment, computers, and valuable papers and records for clients' and vendors' information. The audio equipment and computers should be combined for coverage because they are integrated systems.

Since viruses can adversely affect computer equipment, EDP coverage with virus protection is recommended. Duplicates should be made and kept in an off-site backup facility for easy reproduction following a loss.

Crime exposures are from employee dishonesty. Hazards increase without proper background checks, monitoring procedures, and securing of all records to prevent unauthorized access. All billing, ordering, and disbursements should be handled as separate duties. Regular reconciliation and audits are vital.

Audio equipment is extremely valuable. Some types are relatively small and easily concealed. This equipment should be inventoried regularly to verify that it is still on the premises.

Business auto exposures may be limited to hired and non-ownership liability for employees running errands. Owned vehicles may be equipped for off-site production activities. If vehicles are provided to employees, there should be written procedures regarding personal use by employees and their family members. All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be maintained, and records kept in a central location.

Commercial Insurance And Business Industry Classification

  • SIC CODE: 7389 Business Services, Not Elsewhere Classified
  • NAICS CODE: 512290 Other Sound Recording Industries
  • Suggested ISO General Liability Code(s): 61224, 61225, 61226, 61227
  • Suggested Workers Compensation Code(s): 8810, 8742

7389: Business Services, Not Elsewhere Classified

Division I: Services | Major Group 73: Business Services | Industry Group 738: Miscellaneous Business Services

7389 Business Services, Not Elsewhere Classified: Establishments primarily engaged in furnishing business services, not elsewhere classified, such as bondspersons, drafting services, lecture bureaus, notaries public, sign painting, speakers' bureaus, water softening services, and auctioneering services, on a commission or fee basis. Auctions of used cars and agricultural commodities, such as livestock and produce, are classified in Wholesale Trade.

  • Agents and brokers for authors and nonperforming artist
  • Apparel pressing service for the trade
  • Appraisers, except real estate appraisers
  • Arbitration and conciliation services
  • Artists' agents and brokers, except performing artists
  • Auctioneering service on a commission or fee basis
  • Authors' agents and brokers
  • Automobile recovery service
  • Automobile repossession service
  • Automobile shows, flower shows, and home shows: promoters of
  • Bartering services for businesses
  • Batik work (handprinting on textiles)
  • Bondspersons
  • Bottle exchanges
  • Bronzing baby shoes
  • Business brokers (buying and selling business enterprises)
  • Charge account service (shopping plates) collection by individual
  • Check validation service
  • Cloth: cutting to length, bolting, or winding for textile distributors
  • Contractors' disbursement control
  • Convention bureaus
  • Convention decorators
  • Copyright protection service
  • Correct time service
  • Cosmetic kits, assembling and packaging
  • Cotton inspection service, not connected with transportation
  • Cotton sampler service
  • Coupon redemption service, except trading stamps
  • Credit card service (collection by individual firms)
  • Decoration service for special events
  • Demonstration service, separate from sale
  • Directories, telephone: distribution on a contract or fee basis
  • Divers, commercial
  • Drafting service, except temporary help
  • Drawback service, customs
  • Drive-a-way automobile service
  • Embroidering of advertising on shirts, etc.
  • Engrossing, e.g., diplomas and resolutions
  • Exhibits, building of: by industrial contractors
  • Field warehousing, not public warehousing
  • Filling pressure containers (aerosol) with hair spray, insecticides, etc.
  • Fire extinguishers, service of
  • Firefighting service, other than forestry or public
  • Flagging service (traffic control)
  • Floats, decoration of
  • Florists' telegraph service
  • Folding and refolding service: textile and apparel
  • Fundraising on a contract or fee basis
  • Gas systems, contract conversion from manufactured to natural gas
  • Handtool designers
  • Handwriting analysis
  • Hosiery pairing on a contract or fee basis
  • Hotel reservation service
  • Identification engraving service
  • Inspection of commodities, not connected with transportation
  • Interior decorating consulting service, except painters and paper
  • Interior designing service, except painters and paper hangers
  • Inventory computing service
  • Labeling bottles, cans, cartons, etc. for the trade: not printing
  • Laminating of photographs (coating photographs with plastics)
  • Lecture bureaus
  • Lettering service
  • Liquidators of merchandise on a contract or fee basis
  • Mannequin decorating service
  • Map drafting service
  • Mapmaking, including aerial
  • Message service, telephone answering except beeper service
  • Metal slitting and shearing on a contract or fee basis
  • Meter readers, remote
  • Microfilm recording and developing service
  • Mounting merchandise on cards on a contract or fee basis
  • Music distribution systems, except coin-operated
  • Notaries public
  • Packaging and labeling service (not packing and crating)
  • Paralegal service
  • Parcel packing service (packaging)
  • Patent brokers
  • Patrol of electric transmission or gas lines
  • Photogrammetric mapping service (not professional engineers)
  • Photographic library service, still
  • Photography brokers
  • Pipeline and power line inspection services
  • Playwrights' brokers
  • Post office contract stations
  • Presorting mail service
  • Press clipping service
  • Printed circuitry graphic layout
  • Process serving service
  • Produce weighing service, not connected with transportation
  • Product sterilization service
  • Promoters of home shows and flower shows
  • Racetrack cleaning, except buildings
  • Radio broadcasting music checkers
  • Radio transcription service
  • Recording studios on a contract or fee basis
  • Redemption of trading stamps
  • Repossession service
  • Restaurant reservation service
  • Rug binding for the trade
  • Safety inspection service, except automotive
  • Salvaging of damaged merchandise, not engaged in sales
  • Sampling of commodities, not connected with transportation
  • Scrap steel cutting on a contract or fee basis
  • Shoe designers
  • Showcard painting
  • Shrinking textiles for tailors and dressmakers
  • Sign painting and lettering shops
  • Solvents recovery service on a contract or fee basis
  • Speakers' bureaus
  • Sponging textiles for tailors and dressmakers
  • Styling of fashions, apparel, furniture, and textiles
  • Styling wigs for the trade
  • Swimming pool cleaning and maintenance
  • Switchboard operation of private branch exchanges
  • Tape slitting for the trade (cutting plastics, leather, etc. into widths)
  • Tax collection agencies: collecting for a city, county, or State
  • Tax title dealers: agencies for city, county, or State
  • Telemarketing (telephone marketing) service on a contract or fee basis
  • Telephone answering, except beeper service
  • Telephone solicitation service on a contract or fee basis
  • Textile designers
  • Textile folding and packing services
  • Time-share condominium exchanges
  • Tobacco sheeting service on a contract or fee basis
  • Tourist information bureaus
  • Trade show arrangement
  • Trading stamp promotion and sale to stores
  • Trading stamp redemption
  • Translation service
  • Water softener service
  • Weighing foods and other commodities not connected with
  • Welcoming service
  • Window trimming service
  • Yacht brokers

Background Music Services Insurance - The Bottom Line

To protect your business, employees and clients, having the right background music services insurance coverage is essential. To learn what types of policy options are available to you, how much coverage you should have and the costs - speak to a reputable commercial insurance broker.

Types Of Small Business Insurance - Requirements & Regulations

Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.

Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.

Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.

Small Business Information

Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.

Small Business Insurance Information

In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.

The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.

Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.

According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.

Types Of Small Business Insurance

Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:

  • What type of business am I running?
  • What are common risks associated with this industry?
  • Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
  • Does my state require me to carry this type of insurance?
  • Does my lender or do any of my investors require me to carry this type of policy?

A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:

Business Insurance Policy Type What Is Covered?
General Liability InsuranceWhat is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.
Workers Compensation InsuranceWhat is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.
Product Liability InsuranceWhat is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.
Commercial Property InsuranceWhat is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.
Business Owners Policy (BOP)What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.
Commercial Auto InsuranceWhat is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.
Commercial Umbrella PoliciesWhat is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.
Liquor Liability InsuranceWhat is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.
Professional Liability (Errors & Omissions)What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.
Surety BondWhat is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).


Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.

Business Insurance Required by Law
Small Business Commercial Insurance

If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.

Your insurance agent can help you check applicable state laws so you can bring your business into compliance.

Other Types Of Small Business Insurance

There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:

  • Business Interruption Insurance
  • Commercial Flood Insurance
  • Contractor's Insurance
  • Cyber Liability
  • Data Breach
  • Directors and Officers
  • Employment Practices Liability
  • Environmental or Pollution Liability
  • Management Liability
  • Sexual Misconduct Liability

Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.

Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.

Additional Resources For Professional Services Insurance

Get informed about small business professional services insurance, including Professional liability, aka errors and omissions (E&O insurance), that protects your business against claims that a professional service you provided caused your client financial loss.


Professional Services Insurance

Let's face reality. People today are claims conscious, resulting in a significant share of malpractice lawsuits against professionals.

Liability resulting from the rendering of or the failure to render professional services is excluded in most liability coverage forms. This means that a policy covering a account's or lawyers' office will cover liability arising out of the maintenance or use of the premises, but specifically exclude liability arising out of the rendering of a professional service or the omission of such a service.

In addition to the professions in which actual physical or mental injury may be caused to clients, certain other professions are exposed to claims for malpractice.

Claims may be brought against lawyers, accountants, architects, and similar professional persons for errors or omissions in their professional capacity. Errors & Omissions insurance pays damages that might be awarded to a plaintiff alleging professional negligence.

Professional liability policies are made available to such risks, and these policies provide essentially the same protection as is afforded under the physicians, surgeons or dentists professional liability policy.

Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Professional Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.

Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Money and Securities, Special Floater, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.


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