What Is Niche Insurance?
Niche insurance is a form of specialized insurance that covers an uncommon form of business or enterprise, when that business still faces a substantial risk of financial loss. These types of insurance are usually often very focused on the types of business or industry they cover, and may be more expensive than traditional liability or business insurance policies. Examples of businesses that often require niche insurance include resorts, farms and ranches, and certain entertainment companies. These businesses sometimes face unique risks that ordinary insurance policies may not cover under normal circumstances.
Businesses that operate in the entertainment and leisure industry may require niche insurance. A ski resort and a commercial fishing lodge are two examples. A ski resort may need coverage for avalanche danger, while a fishing lodge might need accidental drowning coverage. These are risks that normal businesses don’t face, and many insurance companies often view the low demand and higher risk of these ventures as not being worth insuring. Other examples of entertainment businesses that require niche insurance include circuses, amusement parks, zoos and certain sports venues such as rodeos. Niche insurance can be so specialized that individual types of entertainers can be insured, such as clowns, jugglers and comedians.
Businesses with animals often require niche insurance. Farms and ranches, for example, can purchase specialty insurance to cover their livestock. These policies can protect an investment in livestock in the event of certain diseases, drought and accidents while transporting animals to market. Pet insurance for animals such as horses, cats and dogs is also considered a form of niche insurance.
Niche insurance can cover businesses that operate in more than one country, because these companies often face additional risks. Examples include companies that export products, or businesses that offer vacation packages abroad. Export companies face the risk of their products being lost if a ship sinks or a plane crashes, and vacation tour companies often face a multitude of unforeseen risks when their clients travel in foreign countries.
Coverage can be purchased for single events, or year-round. Concerts and other forms of entertainment are often one-time events that happen in individual cities, and county fairs or other festivals may happen only once a year. Companies that constantly tour or operate year-round often require a policy that has no gaps in terms of time coverage. Even specialty insurance companies have limits to the types of business ventures they will insure, so potential customers should talk to an insurance agent with these companies to find out if they’re eligible for coverage.
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