An accident or emergency at an amusement park often results in litigation. Some of the legal issues that can come into play include duty of care, product liability, negligence, and ADA or civil rights violations. (Adobe Stock)
The amusement and recreation industry is massive, valued at $54.9 billion. The sector is projected to reach $82.4 billion by 2030. As a result, amusement park owners are looking for specialty liability insurance that covers all aspects of their business.
The problem, however, is that not every insurance company is willing to provide the coverage these amusement or recreational businesses need, says Barbara Malkowski, senior vice president of marketing at Prime Insurance Company. Currently Prime offers amusement parks commercial general liability for injuries and property damage sustained by third parties, equipment coverage including rentals in case of malfunction or theft, and premises liability for claims including slips and falls on property due to negligence.
“Many insurance companies are turning away individuals and businesses that are deemed too risky, or, they could be leaving gaps or exclusions in policies that leave the policyholder exposed,” Malkowski says. “Prime takes a more hands-on approach to so we can write a policy that ensures maximum protection.”
Building an insurance package for an amusement park is unique from insuring other businesses as it often requires addressing an array of issues that need coverage including the venue, property, business auto, as well as other specialty liability, including assault and battery.
“Many amusement parks are outdoors and have large schedules of unique property to consider,” says Spencer Batt, president at American Specialty. “They can often have custom theming that can add significant dollars to the property values. These factors make it important to spend extra time on the property schedule and valuations so that the policy limits and terms are appropriate at the time of a claim.”
American Specialty offers tailored insurance for the amusement park industry that can include general liability, excess liability, commercial auto, property, inland marine and workers compensation coverage. To supplement the coverage, the company offers risk management services from a team with backgrounds in amusement park operations and claims are handled in-house by our team familiar with the nuances of the industry.
Safety first
Within the amusement park industry, there are a variety of safety concerns that need to be addressed from an insurance perspective. As Batt explains, while there is a lot going on at an amusement park to consider, the primary safety concerns tend to fall into two categories.
“The first category involves general facility safety that includes hazards such as slips, trips, falls, heat illness and dehydration, horseplay, and reckless behavior by guest which can lead to severe illness or injury,” Batt says. To address the occurrence of this category of incidents, American Specialty recommends amusement parks implement safety measures including appropriate facility inspections, facility maintenance, shading, hydration, signage, barriers and supervision of guests.
The second category is specific to amusement rides themselves, Batt explains. These may include mechanical failures, operator errors, lack of emergency response procedures, and inadequate ride inspection and maintenance protocols.
“Although this category of incidents is rarer, they can result in significant damages affecting multiple people in each accident,” Batt says. “To protect against these incidents, we recommend daily ride inspections, thorough training and certification of ride operators, establishing and practicing effective emergency response procedures, and following ride manufacturers’ guidelines.”
Malkowski adds that it’s important for insurance companies who are working with amusement parks to also evaluate the “all around standard of care in how the business is owned, operated and maintained.” What is the overall history of the owner and company? What type of training is in place? Are there strict safety rules for guests and action protocols for staff?
Indeed, Batt and his team find that the owner or operator’s approach to safety is crucial in protecting against all of these risks.
“An aware and proactive owner and/or operator who uses tools like training, inspections, certifications, and procedures is the starting point for a culture of safety at an amusement park,” Batt says.
Evolving needs
The health of the amusement park industry, from an insurance lens, depends on the specific line of business. As Batt explains, the industry is seeing the greatest change right now on general liability and excess liability regarding changes to terms, conditions, rates and reductions of limits. While, other lines of the business may be seeing more consistency.
“We can’t share specific claim case studies, but common claims in the amusement park industry include slips, trips and falls, ride and safety equipment malfunctions, operator errors, and negligent supervision by park staff,” Batt says.
Malkowski is seeing a lot of business and opportunity in the amusement park marketplace.
“This is where experience in risk mitigation, claims management, and preparedness when incidents and claims and lawsuits occur — comes in, especially because bodily injury is commonplace,” Malkowski says.
Looking ahead, industry experts agree that the amusement park industry is a growing marketplace — not only with traditional amusement parks, but also such enterprises as trampoline parks, inflatable rentals and family recreation centers.
“There are new recreation ideas, venues, new designs and elements being added to the recreation industry consistently. Our experience indicates that when the best standard of care is in place, and superior training and equipment is maintained, it boils down to awareness of guests, owners, and staff that recreation has risks,” Malkowski says. “Coverage goes beyond basic coverage or a piece of paper. The job is to actively identify and mitigate potential risks to prevent accidents. It’s about helping people to safeguard their business and, most importantly, to be a partner if an incident, claim, or lawsuit occurs.”
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