November 1, 2012
Negotiating a Narrow Market for Best Results
Unlike most business, waterparks have few options when it comes to selecting insurance companies. That generally means high premiums due to lack of competitive pricing. However, waterpark owners and managers believe the insurance companies they must deal with are excellent to work with and meet their needs quite well.
“It’s a relatively small industry so you can’t go to 10,000 insurance companies,” said Andy Weiner, owner of Splash Zone waterpark in Wildwood, N.J. “There are some, but not a lot like there are in basically every other industry. And that means it’s not cheap. You can compare with others, but there just aren’t many to compare to. It’s funny because I fly a plane and you think my insurance would be astronomical, but it’s not. With waterparks, it’s very high.”
Joe Jenkins, general manager of Daytona Lagoon in Daytona Beach, Fla., said more options would help the industry.
“I think our needs are pretty well met, but as an industry, there are only a handful of carriers that we can use,” he said. “We are a little different because we aren’t just a waterpark; we have a family entertainment center attached to us. So we need a carrier to do both, and that makes it even more difficult. Some will do the waterpark, but then they won’t do the go-karts. It’s challenging with so few choices. Some additional competition in the marketplace would certainly help.”
Rick Redmond, president of the Shore Club in Volente, Texas, said he also felt options are slim when it comes to waterpark insurance, but he found it best to work the World Waterpark Association.
“A couple of years ago I hooked up with them and found the best insurance option was the one they had a big agreement with: Haas & Wilkerson. So that’s who we use. They get buying power as a group, and as a member of the association, you get better rates and savings.”
Pat Mossburg, owner of Paradise Waterpark in Silsbee, Texas, also believes in the buying power the association offers.
“We’re a fairly new waterpark, and we did some shopping and found the best way was to go with one of the insurance companies the association recommended,” she said. “That said, the price was more than we ever dreamed of. We are pleased with what they offer and how they work with us, but they charge us out of the gazooboo for insurance.”
Another way Redmond saves money every year is to separate insurance companies.
“We have waterpark liability insurance and property insurance,” he said. “And we seem to get a better rate separating the two.”
Park managers and owners said obtaining an insurance policy for waterparks is not difficult, but there are annual procedures that actually make the waterparks safer and can ultimately reduce premiums while also being proactive against accidents.
“They look at your history and basically write you a liability policy,” Weiner said. “Fortunately for us, we have a very good accident record, so our premiums aren’t that bad. But you have to work hard to ensure safety.
Like many insurance companies, Weiner said his insurance company is sometimes too quick to settle complaints.
“I would say our only problem with our insurance company is that I think they pay claims we don’t think should be paid,” he said. “But for them it’s simply dollars and cents. If it’s going to cost them $100,000 in litigation – and I use that number arbitrarily – they are going to settle for $20,000 – even if they know – and we know – that we didn’t do anything wrong. So that’s just part of the equation.”
Waterparks’ insurance needs can change annually, but most park owners and managers said their needs stay relatively steady from year to year.
“They are reasonably standard,” Weiner said. “In New Jersey – and most states – there is a minimal amount of insurance you must have for liability – and I believe it’s $1 million. Sometimes your needs change if you are putting in new attractions, but that’s mostly for amusement parks. Most parks don’t change that much because of the difficulty in putting in slides and pools. But if you add something, they certainly want to know.”
Redmond said insurance rates – and needs – change based on sales.
“If we have a big sales year over last year, we can expect the rates to go up,” he said.
It’s also important to work well with local emergency management agencies such as fire and police to ensure claims are reported properly.
“In New Jersey, if you have an incident at the park, if it is someone who breaks a bone or has to be transported to a medical facility, you must immediately notify the state,” Weiner said. “And that means you must immediately pick up the phone. They generally require that you shut down the attraction until they can come and inspect it. So whenever there is something like that and they have to come or if the police, fire or ambulance have to come, you should tell your insurance company right away. It may not result in a claim, but you should get those reports and forward them to your insurance company.”
Jenkins said local officials don’t really get involved when it comes to insurance issues.
“Unless there is a fire or an issue that we need a report from to give to our insurance company, they don’t get involved,” he said. “Anything they report would go in our packet for our claim report. We actually employ our own EMS and paramedics here, so we have a great relationship with local authorities if something arises. And our assistant waterpark manager doubles as a risk management person, which is really a great way to have a point person for insurance issues.”
Listening to insurance companies can result in safer parks and lower premiums.
“Every year, the insurance companies periodically sent out an inspector, and they want to go through the entire park for an inspection,” Weiner said. “They make recommendations to where things might be able to be changed to make it safer. And we think that’s great. We look at their suggestions very seriously and take action whenever we can.”
Jenkins appreciates that service.
“The walkthroughs are included in the cost of the premium, and it’s great to work with them to be proactive when it comes to safety,” he said. “We go through the list with staff and management and figure things out how to implement them and make the park as safe as possible. They actually help us.”
“Whether they tell you that a surface might be too smooth and slippery for a waterpark or something else, they help you keep the park safe,” added Ron Nam, manager of Big Surf Waterpark in Tempe, Ariz. “And there’s changes in regulations every year, so they make sure you are on top of all of that. They help you prepare for your inspection from the county. And it just prevents injuries and is something every park should listen to.”
Redmond said it’s imperative to listen to the insurance companies in the walkthroughs.
“If you don’t, we won’t get insurance,” he said. “But you want to listen. When they say a fire extinguisher here is out of date or that we should paint a stripe brighter somewhere else, of course you want to do that.” –