Only you can ultimately answer this question as the business owner but I’ll outline the primary types of insurance that bands carry, explain the purpose of the insurance, and give you a general idea of cost. With this information, hopefully you’ll be better able to make the decision of what insurance to carry.
General Liability Insurance
Purpose: This insurance covers you for property or bodily damage caused by your business up to a limit, usually $1M or $2M per incident. It is not uncommon for festival and government promoters to require a Certificate of Insurance for this coverage.
Example: If you throw drum sticks from stage and injure someone, this type of insurance would cover you.
Annual cost: Between $1000-2500 is the approximate range with $500-1000 deductible. You can get one-off coverage sometimes by being added onto the promoters policy in the case of festivals, or you can apply through https://www.theeventhelper.com for a one day policy that will cost around $200.
Workers Compensation Insurance
Purpose: This insurance covers medical bills and a portion of lost wages for a person injured on the job. This insurance is issued in relation to the state of residence of the employee or contractor. You might think, well, I have health insurance for that, but if your health insurance discovers that the injury happened on the job they may (and likely won’t) cover the medical bills.
Example: Crew member is pushing a case up a ramp into the trailer and his knee gives out. Or band member is on stage rehearsing and slips off the edge and injures leg.
Annual cost: Approximately 1-4% of annual payroll, depending on the state and the job the employee does. If you have all Virginia employees doing clerical work the rate may be 1.1% and if you have a FOH sound person on the road based in California the rate may be 4.0% or more. There are also minimums per state so even if you have only $10k of payroll in Virginia, there may be a minimum of $35k; this depends on the state.
Automobile Insurance for Owned Vehicles
Purpose: This insurance can coverage liability and collision. Most of you will be familiar with this insurance from insuring your personal vehicle. It works a lot like that except that sometimes an insurance company will want this policy to be a commercial policy which can be a bit more expensive.
Example: You hit a deer on the highway or get into a fender bender. You call up your company - Geico, State Farm, Erie, etc and they help you through the process.
Annual cost: $750-2500. I’ve seen this upper end go up to $4000 for a 3-year leased Sprinter but that was an outlier.
Hired and Non-owned Automobile Insurance
Purpose: This insurance covers vehicles used on behalf of the business for business purpose. It often covers rented buses or rented vehicles (like vans from the airport) or crew member vehicles in use for work.
Example: A crew member driving their own vehicle, towing the band trailer to meet the tour bus and the vehicle is involved in a fender bender. This vehicle could be covered. Or a tour bus is being rented by a band and damage is caused to it, this insurance would cover that.
Annual cost: $750 and this is added onto a commercial auto policy. I’ve not seen one of these written as a stand alone policy. Deductible usually $500-1000.
Equipment Insurance / Inland Marine Insurance
Purpose: This insurance covers your equipment and gear up to a certain amount per policy period. It can be a policy with scheduled equipment meaning that you list out ever piece the policy covers or it can be unscheduled where the policy just covers equipment up to a certain amount but the equipment doesn’t need to listed out. This policy covers equipment both on the road and in your studio (though you may also have renters insurance or home owners insurance for that gear). The basic idea of Inland Marine is that it covers equipment that moves around.
Example: Some jerk breaks into your trailer and steals your stuff. Happens all the time, right? Another example of this was a crew member using his personal truck to transport gear. His truck was broken into and the insurance reimbursed him for the lost equipment and his personal gear stolen since it was a business purpose and unscheduled equipment.
Annual cost: Approximately $500-1000.
All of these insurance policies make sense and are well worth the investment to keep you financially secure in case of an accident. I have seen every one of these policies used with either our band or festival clients. The expense seems like a burden annually until you actually need to use one of these policies and then it feels justified and like a good investment.