Top Tips for Maximizing Insurance Coverage

August 16, 2011 No Comments

No matter how vigilant owners and operators of leisure entertainment facilities, party rental companies and the like are when it comes to the safety of their premises and attractions, there remains the possibility of a visitor accident or other occurrence, such as a fire, flood, or theft, which subsequently leads to an insurance claim. This makes purchasing the right insurance of utmost importance. However, becoming intimately familiar with the coverage purchased, as well as ascertaining that insurance dollars are spent wisely, is equally critical.

“Knowing” the ins and outs of every policy you have, rather than just making the payments and putting the policy in a drawer, is as paramount as becoming intimately familiar with your staff, your equipment and your attractions,” said Matt Stein of insurance broker Sterling & Sterling. Stein, who serves as underwriter of the company’s Family Entertainment Center Program, noted that neglecting this step can prove to be a “nightmare,” citing as a hypothetical example a family entertainment center whose owner decides to start renting out its inflatables for off-site events.

“Say someone has an accident in one of the inflatables that has been rented out for a party, but the owner didn’t know that the coverage was limited to incidents occurring on the designated premises, in this case, the family entertainment center,” Stein explained. “He or she would be in a lot of trouble.”

Bill Coons, risk and loss control director, Thomco (Fun Pro), corroborated Stein’s comments. He added that subtle, but very significant differences in insurance coverage also render it essential for owners and operators of leisure entertainment facilities to become intimately familiar with the type and terms of their own policies. For instance, he said, the two common “flavors” of business insurance policies include “claims made” and “occurrence.” The former provides coverage for claims made in the period the policy is in force; coverage extends only so long as the insured continues to pay premiums for the initial policy and any subsequent renewals. Once premiums are no longer being remitted, the coverage stops for any claims not known or made to the insurance company during the coverage period. The latter provides coverage for incidents regardless of when they are reported.

“The bottom line is, you don’t want to be surprised that you aren’t covered for a claim because you have a ‘claims made’ policy and the incident wasn’t reported until later on,” Coons said.

Just as significantly, proprietors of leisure entertainment establishments and party rental companies would do well to familiarize themselves with the procedures entailed in filing insurance claims. “It helps to know ahead of time to whom any report must be sent and what to send, especially if you’re talking about a large loss involving several policies as opposed to a simple slip-and-fall incident,” Stein observed. “This minimizes time and effort on the part of the insured, and the insurer, and gets things moving faster.”

There is also much that operators can do to maximize their insurance dollar. Whether one is shopping for a policy for a new facility or contemplating switching carriers, interviewing several agents is a good idea. “It’s important to find someone with whom you’re comfortable, because comfort leads to a long-term relationship, which in turn leads to the most consistent service,” Coons said.

Avoiding the temptation to purchase an offered policy at face value merely to save time and effort, and instead conducting an “apples-to-apples” comparison of different options, also yields  leisure entertainment facilities more “bang” for their insurance buck. Comparison-shopping for insurance has become as accepted a practice among business owners as doing the same in preparation for buying a homeowners’, automobile or life insurance policy, sources asserted.  One operator of a small Pennsylvania amusement park—who asked to comment anonymously for fear of being inundated with calls from insurance brokers—said he has consistently been able to obtain better rates for the same coverage by showing prospects the quotes he has received from other providers. In a recent negotiation, he was able to procure three times the liability protection limit of his previous policy with a simultaneous 30 percent reduction in the net cost of his liability insurance.

Similarly, while it would be foolhardy to procure an inadequate amount or scope of insurance for any type of leisure entertainment facility or business, owners and operators may be able to stretch their budget by ensuring that they are not wasting money on unnecessary coverage. For example, a good level of liability coverage for inflatable rental operations is $1,000,000 per occurrence and $2,000,000 annual aggregate, according to Sandy Swift, account executive, The Friedman Group. A leisure entertainment facility with a full-service snack bar requires insurance to cover equipment breakdown, Stein pointed out; one that only sells packaged items does not.

“The snack bar example is admittedly simplistic, but some brokers don’t ask questions like this and they automatically include coverage that” doesn’t merit acquiring, Stein said.

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. Similarly, an inflatables rental company with three or four inflatables, less coverage than a counterpart with a dozen bounce-houses, slides, and the like, John Lane, owner of Ribit Party Rentals, Kansas City, Mo., has discovered.

Finally, sources concur that the best insurance value to be had by leisure entertainment facilities and party rental concerns is coverage purchased from a carrier that specializes in one or at most two narrow segments of the market. “Our insurance is specifically designed for moonwalks and slides, because it offers us the most effective coverage for our dollar and allows us to go the extra mile for renters,” stated Debbie Henderson, owner, Air Castles And Slides, LLC, Edison, N.J. Generalists, added the amusement park owner, “are just a poor fit.”

Industry News

Foundations Entertainment University Class #23: Chicago, Ill., July 19-21, 2011
You Don’t Have to be a Start-up Entertainment Center to Gain Something from Attending Foundations Entertainment University

Thirty-one individuals from all over the country, as well as Puerto Rico and the Bahamas, met in Chicago to hear five of the entertainment industry’s most knowledgeable presenters share their expertise and experience in starting and running a successful entertainment center. Kirsten Legner of Amazing Ventures, LLC, said, “My husband Jim and I decided to attend FEU, even though our businesses were already open, because of the wealth of information provided. The information is relevant and valuable at any stage of the business cycle and we were looking to find opportunities for ourselves to make improvements and knew the speakers could provide direction. This was actually Jim’s second time attending FEU.”

Kirsten is the Owner/CEO and Jim is the Owner/COO of MagiQuest Chicago and Amazing Chicago’s Funhouse Maze. One is very profitable and the other is not performing as expected. “We learned that we need a professional audit of our second business model,” she said. “Our efforts are good, but not enough to really understand our obstacles; the experience level of the FEU speakers was invaluable. We hired two of them to run independent audits now so we can get timely and intelligent support rather than us trying to reinvent the wheel. I wish I had done this before opening our second business, which is in a market and industry segment that we were unfamiliar with. A feasibility study would have probably prevented costly mistakes on our part.”

Frank Seninsky commented, “I will be going to visit Kirsten and Jim in Chicago next week to do a one-day site visit and action step report. I am glad the Legners recognize the benefit of continuing education, even after their facility has been open for some time. They realize there are ways to improve existing business models that will significantly increase their revenue with very little investment on their part.”

Although Foundations is a must for anyone entering or thinking about entering the family and location-based entertainment industry, existing facilities have found the program to be invaluable as they reassess their current business plans and look to make significant changes for the future. Chad Cook of Freedom Station, Prescott Valley, Ariz., has been in business for 17 years. Cook noted, “The Foundations Team has done a great job at developing a program that is not only relevant to beginners, but also to a veteran operator!” Juan Jose Rodriguez was a first-time attendee to Foundations, but he is the fifth representative to travel from Puerto Rico’s Bowlera to the mainland to attend the class.

Top industry consultants, Randy White, CEO of White Hutchinson Leisure & Learning; Frank Seninsky, President/CEO of Alpha-Omega Amusements and Partner of Amusement Entertainment Management (AEM); Alan Fluke, President of AEA Consulting Group; Jerry Merola, CFO of Alpha-Omega Amusements and Managing Partner of Amusement Entertainment Management (AEM); and Peter F. Olesen, P.E., President of Entertainment Concepts, Inc., cover over 22 hours of instruction for entrepreneurs looking to get into the location-based entertainment industry, individuals and companies in the planning, designing and building stage and new operators and businesses looking to grow and expand their current operations.

Joining the Foundations class again was long-time industry expert on the business of birthday parties, Frank Price. Frank is the president of F.L. Price and Associates and the founder of Birthday University (BU). Frank provided a half-day program, “Remarkable Parties & Group Events – Past, Present and Future,” as a follow up to the Foundations program.

Foundations is scheduled for one more three-day educational session in 2011:  September 20-22 in Kansas City, Mo. If you are thinking of opening a center or need to reevaluate your current business, don’t miss this opportunity. Full information and registration is available online at www.foundationsuniversity.com. Please contact Frank Seninsky (fseninsky@aol.com) at 732-254-3773.

Industry News

Jungle Rapids Family Fun Park Sees “Tremendous Increase” in Attendance and Revenue with New Gen6 Supernova Laser Tag System

Since initially investing and then later purchasing the Jungle Rapids Family Fun Park in 1990, Robert (Bob) Rippy has done what many successful entrepreneurs hope to do – invest and grow a successful business. Starting in the 1980s Rippy oversaw many successful additions to the park; from mini-golf to go-karts, a climbing wall, laser tag and much more. As part of a major expansion in the 1990s, Rippy added an outdoor waterpark, which features a million gallon wave pool, kids area, slides and a ‘Super Bowl’ that flows into a lazy river. Rippy is continually looking for new ways to keep the guests coming so he can not only meet the financial demands of covering the operating costs, but can exceed the breakeven point that allows the facility to turn a profit.

As the 2011 summer season was getting ready to kick-off, Rippy completed his newest facility upgrade – a redesigned 2,800-square-foot laser tag arena. Their 10-year-old arena was in need of a face-lift and upgraded equipment. Doug Bryant, Jungle Rapids general manager, told us that Rippy had discovered and fell in love with the Laserforce lasertag system while attending a conference in Australia earlier in the year. “But it wasn’t until we brought the system into the park for testing and put it side-by-side against our current system that Bob knew this was exactly what we needed,” said Bryant. “He couldn’t believe the difference until he saw it from across the room with his own eyes.”

Laserforce was immediately hired to upgrade their system and arena, which included new lighting throughout, provided by Steve Strickland of Nexus Group South, and installation of the new state of the art “Gen6 Supernova” laser tag system. The new equipment now allows for team play as well as individual play. Players can seek cover in the bases or tag their opponents one at a time from elevated towers while they navigate through the smoky passage ways of the black lit arena. “Since opening to the public on May 20, the park has seen a tremendous increase in play,” noted Bryant. “Both revenue and attendance has increased significantly and we are seeing new faces as well as guests playing multiple times.”

Industry News

Wild Adventures Names Charbeneau New General Manager
Leader Brings More than 24 Years of Theme Park and Entertainment Experience

Wild Adventures Theme Park (WA) recently named Greg Charbeneau as the park’s new vice president and general manager.  Charbeneau has been employed by Herschend Family Entertainment (HFE), the parent company of WA, since 2008 and brings 24 years of experience in the theme park and attractions industry.

“I am grateful to join a team that creates memories worth repeating for its guests and team members,” said Charbeneau. “The enthusiasm that the community has for Wild Adventures is rewarding to experience, and in the short time I have been here, I have already grown to love Valdosta.  I look forward to playing a role in the park’s continual growth and being able to share that growth with the community and region.”

Prior to coming to Valdosta, Charbeneau worked at Adventure Aquarium, also an HFE property, as vice president and executive director where his responsibilities included the hiring of new directors, managers and front-line team members as well as the implementation of a new guest experience program. Charbeneau’s industry experience extends to include positions at the New Jersey State Aquarium, the Mystic Aquarium Institute for Exploration in Connecticut, the Walt Disney World Company, as well as Sea World Ohio and Sea World Florida.  His career highlights include overseeing large construction and extensive renovation projects at various facilities, features in numerous industry publications, serving on several boards and developing multiple research projects.

Wild Adventures is a 170-acre theme park, waterpark and animal park in Valdosta, Ga.  The park features one of the largest ride collections in the South, more than 500 wild animals, Splash Island Water Park, the region’s largest waterpark, shows, festivals and all-star concerts.

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