Top Tips for Obtaining the Best Insurance Package

January 16, 2011

While they hopefully happen only rarely, visitor and employee accidents and property damage do occur at leisure entertainment facilities of all types, from family fun parks and miniature golf courses to museums and zoos. Insurance is essential to minimizing the financial consequences of such incidents, but the cost of coverage itself can be difficult to bear if operators neglect to take steps aimed at choosing the right policy and package.

Above all, owners and managers must keep in mind that different types of facilities require different types of insurance and breadths of coverage. For example, both a museum and a waterpark will need liability insurance to protect them from lawsuits should a visitor incur an injury of any kind while on their premises. However, the former will likely require less coverage than the latter because the potential for accidents is lower when engaging in activities like museum-going than it is when enjoying the rides at a waterpark. Additionally, many museums that showcase precious artifacts need “Fine Arts Risk Management” insurance to insure their contents and protect them against liability for damage from deterioration and theft of their contents. A waterpark would, of course, have no need for coverage of this kind. Even leisure entertainment facilities in the same category have varying needs; for instance, a small amusement park with a limited number of rides probably needs less liability coverage than one with more rides.

To stack the odds in favor of obtaining the right insurance and insurance coverage level, some sources, including a spokesperson for Allied Specialty Insurance, recommend working with a carrier that specializes in one or two narrow sectors of the leisure entertainment market. Several years ago, one amusement park owner added a waterpark and a resort hotel to his property. The operator had been working with a “generalist” insurance carrier, but decided to consult with a specialist agency whose experts figured out how to double the facility’s the liability exposure with a mere 20 percent increase in its liability premium, while reducing overall premiums by 60 percent. “I don’t think a general company would have known how to do that,” the operator said.

Also worth considering: obtaining insurance coverage through a Risk Purchasing Group (RPG) such as the International Special Events & Recreation Association (ISERA). RPGs provide an option through which smaller industry players whose size and/or budget may otherwise have precluded them from procuring an insurance policy to do so. ISERA caters to the outdoor industry. With group insurance of this kind, a master policy is issued to the insured organization, (here, ISERA), and each member is issued insurance through a certificate that adds the member to the master policy. Each member is assigned its own limits of insurance, so that coverage is not limited by other members’ claims.

Moreover, no matter the type or extent of insurance they eventually procure, operators would do well not to accept prices at face value.  Contrary to what some owners and managers of leisure entertainment facilities may believe, comparison-shopping for commercial insurance is just as common as comparison-shopping for personal automobile and life insurance. This is especially true given the extreme competitiveness of the commercial insurance industry as a whole; in fact, the more prospective customers evaluate insurance coverage options side-by-side, the better the rates—and service—companies tend to provide, said Alan Philips, owner of Sports Center of Connecticut in Shelton, Conn.

Whether obtaining insurance for the first time or looking for a new policy for an existing facility, operators would do well to be open about any other quotes they have received, as well as about what they believe coverage is worth. Those in the latter group will fare better when they can provide several years’ worth of information about any losses their facilities have already incurred, noted Michael B. Beckman, CIC, general partner and owner of Beckman Insurance Agency.

One caveat to keep in mind here, according to ISERA: “Historically, the insurance industry has encouraged as much coverage as possible; however, lower limits are frequently more than adequate to provide owner operators with all the coverage needed. Additionally, having higher limits often provides clients and their attorneys with more incentive to sue because more money is available under the policy. ISERA typically quotes $100,000 per accident and $300,000 aggregate for a basic quote for most risks-although optional higher limit quotes are provided and offered. ISERA can provide up to several million dollars in coverage.”

Periodic reviews of insurance coverage are a good idea, too. The Ontario Ministry of Culture, which administers Ontario’s museums, instructs its museums’ insurance committees to regularly review their insurance policies and contact other institutions (especially museums) to compare services. Committees are also counseled to inquire of several insurance companies about their experience with museum coverage, and to subsequently solicit bids for the lowest premiums and broadest coverage in tandem with the facilities’ needs.

One amusement park client of Water & Amusement Park Risk Insurance Services, LLC recently asked the company to conduct a review of its coverage. The park has several go-kart tracks, roller coasters and water rides. Despite the facility’s clean safety record, the operator was unable to control rising premiums because of the addition of new rides almost every year. A review revealed that the client was not properly protected, but the insurance company was able to arrange for it to receive five times the liability protection limits, with a 35 percent reduction in the cost of its liability insurance.

Clearly, procuring the “best” insurance package takes work—but proves very worthwhile in the long run.

Industry News

LEGOLAND® Florida Extends Special Pricing: Discounts on General Admission and Blackout-free Annual Passes Extended Through April

Due to popular demand, LEGOLAND® Florida has extended its discount on general admission tickets and Standard Annual Passes through April 2011.  Central Florida’s newest full-day, family theme park, scheduled to open in October 2011, announced the extension after a hugely successful December sales period.  Formerly expected to end on December 31, 2010 – guests will now be able to get the special rate through April 30, 2011.

“Our strong sales numbers have proved to us that people are excited about the opening of LEGOLAND Florida,” Director of Sales and Marketing, Kim Isemann stated.  “By extending these special rates through the early spring, we want to allow our future guests the opportunity to lock in their tickets and annual passes before the Park opens.”

Available only online, general admission tickets are $65 for adults and $55 for children and seniors.  Standard Annual Passes are offered at the children’s prices of $99 with no blackout dates. Plus Annual Passes and Ambassador lifetime passes are also available at the non-discounted rates of $159/$129 and $2,500 respectively.  These passes include unlimited admission, discounts on preferred parking, special events, plus discounts on food and merchandise. Prices do not include sales tax.

LEGOLAND^® Florida opens in October 2011 and will be a 150-acre interactive theme park dedicated to families with children between the ages of 2 and 12 with more than 50 rides, shows and attractions. There are currently four other LEGOLAND Parks in the world – LEGOLAND California in Carlsbad, LEGOLAND Billund in Denmark, LEGOLAND Deutschland near Günzburg, Germany and LEGOLAND Windsor outside of London. The LEGOLAND theme parks are a part of Merlin Entertainments Group.