Insurance Trends at Family Entertainment Centers:
February 10, 2013
Ensuring the Best Coverage
For those of entrepreneurial spirit, owning a business can be quite rewarding. Business owners enjoy many perks such as being their own boss, hiring their own team of workers and, hopefully, reaping the rewards of all their hard work. There are, however, risks involved when it comes to business ownership and entrepreneurs must make it a priority to insure their organization as a means of protecting their investment.
Owners of family entertainment centers (FECs), particularly those with go-karts and other rides, need to know their risks and protect themselves in case of accidents and injuries on their premises. “Some insurance claims that are made are really frivolous,” said Brian Leentjes, owner of Castle Fun Center in Chester, N.Y. “When looking for an insurance company, you want to make sure they have the proper legal representation and are willing to fight some of these claims.”
Keeping staff knowledgeable about safety and maintaining the facility are just a couple of ways that Leentjes addresses his risk concerns. “I have staff meetings on a weekly basis, we always update our manuals and make sure our training procedures are up-to-date and we keep the facility safe and clean. We do our part to keep insurance concerns to a minimum,” Leentjes said. “Our insurance policy is also reviewed on a yearly basis.”
Lisa Crispino, owner of Funtrackers Family Park in Hot Springs, Ark., recommends finding an insurance company with a wonderful, hard-working staff. “Our company has great people that really take care of everything. If anyone threatens a claim, their claims department gets right on it and takes care of the situation,” said Crispino, who reviews her policy yearly, always adding in something new.
“The cost of insurance is always a concern of mine,” Crispino admitted. “One way to stay on top of this is to shop around for the best price. Then, let your company know about it and they will usually come around.”
When it comes to choosing an insurance company, FEC owners should look for a company that insures all parts of the park, suggested Gary Seibert, owner of Ozzy’s Family Fun Center in Leesport, Pa. “If you have go-karts at your facility, for example, you want to find a company that insures go-karts. You don’t want to have to have individual policies for each thing. Have everything in your park under one umbrella,” Seibert said.
“It is also important to review your policy each year, because you want to make sure that the company has not made any changes throughout the year, without notification,” said Seibert. “You just want the lowest risk possible, so you have to stay on top of it.”
Seibert’s biggest insurance concern is the litigious nature of today’s society. “These days, people sue for just about anything, unfortunately. Because of that, we need to play our best game all the time. We put all of our procedures in writing, document everything, have regular inspections and train and supervise all staff. We do not take anything for granted,” Seibert said.
Bernadette Chandler, owner of Party Central in Bossier City, La., echoed Seibert when she spoke of society’s trend towards filing claims. “Every time I open my doors, I am welcoming in a potential claim. I have a deductible to meet for each claim, so every person that enters has a dollar sign over their head. Everyone, unfortunately, seems to be trying to make a quick dollar and they are taking advantage of small businesses. They come in here and see the bright lights and the equipment and assume we are raking it in, but really we are just a small operation,” said Chandler. For her part, Chandler talks to her employees and has their support. With proper training, the operation can run as smoothly as possible.
“When choosing a company to work with, the most important thing to find out is whether or not they are willing to stand up for you and fight the claims. The trend lately seems to be paying off claims too easily. You have to find the right agent who will not give in so easily,” Chandler remarked. She also reviews her policy each year and discusses the events that have occurred over the course of the prior year to ensure that the right coverage is set in place.
Patrick Morandi, CEO of Wahooz Family Fun Zone in Meridian, Idaho, looks for three factors in an insurance company: cost, on-site inspections and how they handle claims. “Cost is always a factor and we actually shop around every one to two years to see what kind of quotes we are offered and what other companies may bring to the table,” Morandi said. “We also want to find a company that will come out to the facility and make suggestions that will help us offer the safest environment to our guests.” Additionally, Morandi stated that his top concern is getting a comprehensive liability insurance program that limits exclusions. “A good, all-around policy is key,” said Morandi, who reviews his policy from top to bottom on an annual basis.
Like the other FEC owners, Daniel Statler, owner of Statler’s Fun Center in Greensburg, Pa., meets with his insurance agent each year to review his policy. “You have to have a good relationship with your insurance company,” said Statler. “It is definitely one of the most important aspects of working with someone.”
Of utmost concern to Statler is doing all he can to make sure that the rides and equipment at the center are safe. “We always have to make sure everything is operating safely because someone getting hurt at our establishment is something we need to avoid at all costs. And, should someone make a claim, we also need to be sure that we are working with an insurance company that will help defend us,” Statler said.
Shopping around for the best price is on the mind of Don Towne, owner for The Pit Indoor Kart Racing, in Mooresvillle, N.C. “It seems there has been a 15 percent cost increase in insurance, across the board, specifically for FECs,” said Towne. “I got four quotes this year, before making a decision, and each company had gone up 15 percent from the year before. You just have to shop around to make sure you are getting the best price,” stated Towne, who reviews his policy each year.
Aside from cost, the other important factor when choosing a company is making certain that the agent is familiar with the business. “We have high-speed racing here, so we needed an agent that is familiar with the types of risks involved with this type of environment. The more familiar they are, the more they know about the risks and that can also affect cost,” said Towne. –