Spotlight on Insurance: Minimizing the Risk of Borrowed Equipment and Staff

November 2, 2013 No Comments

“Hey buddy, may I borrow your ride?”

How familiar is that statement? How often do you as an amusement rental operator go to one of your friendly competitors and borrow or sub-contract a piece of equipment for an event? Or better yet, sub-contract out that special “Jack Sparrow” character/entertainer for a child’s party? If you are at all like your colleagues in our industry, you should find yourself in this situation on a fairly regular basis. The question of the day is “How does this affect my company’s liability and insurance?”

Picture this scenario: You have a large party booked for the weekend and the customer demands an obstacle course. Unfortunately, you don’t have one in your inventory, but your good friend down the street does, so you work out a handshake deal and borrow his unit. Fast forward to the party, where little Johnny catches his ankle on a small tear in the unit and sustains a broken ankle. Little Johnny’s parents decide to pursue a claim. Whose insurance company is going to pay for this, yours or your buddy’s? Well, in the absence of proper contracts and documentation, the answer is most likely yours, which could ultimately impact your rates and insurability.

So, how do you avoid this situation? It’s easy, by practicing a pretty simple and basic Risk Transfer technique that has been used for years in the construction and service industries. The first step is to have a standardized sub-contractor agreement (contract) that you use for all sub-contracting situations. This would include catering, entertainers, characters or equipment transactions. The contract should clearly spell out the responsibility of the sub-contractor to provide evidence of insurance with limits that are equal to or greater than your own policy limits. It should require them to add your company as an Additional Insured to their policy as it relates to the sub-contractor agreement. Lastly, it should also include requirements that your sub-contractors have a protocol for doing background checks on any entertainer, clown or character that they provide you, as well as equipment maintenance.

While this may seem like a bit of extra paperwork, it truly can save you significant headaches and money down the road. Especially from an insurance perspective, if you were to provide our insurance program with proof of this system of Risk Transfer when utilizing sub-contractors, the rate for those situations would be approximately one quarter 25 percent the standard rate for the class. That alone could be huge savings and a big addition to your bottom line if you sub-contract out a lot of equipment or entertainers.

The bottom line is that it is OK to use other people’s equipment or personnel, just make sure you have a well-written agreement in place, and that you are provided with appropriate evidence of insurance (Certificates of Insurance) naming your company as an Additional Insured.

If you have any questions about this topic or have any other safety, insurance or risk management questions related to the Amusement Rental Industry, please email them to Drew@insureair.com.

Remember, inflatables don’t hurt people, poor operations hurt people!

(Drew Tewksbury is the program manager for Amusement Insurance Resources. A nationally recognized speaker on safety and risk management, he is also an active member of IAAPA’s Safe Inflatable Operators Training Organization, Responsible Operators Amusement Rentals (ROAR) and the ASTM International.  Additionally a certified Amusement Ride Inspector through the National Association of Amusement Ride Safety Officers, he holds inspection licenses in several states and can also be reached at 216-658-7844.)

Back

Sorry, the comment form is closed at this time.

Sponsors

Richie\’s Italian Ice

Italian Ice Kiosks and Carts

Tear Repair

Tear-Aid industrial strength patches to repair holes and tears.

Money Tree – ATM

ATM machines.

Safari Ltd.

Leading manufacturer of innovative educational toys.

Nieco Corp

Nieco automatic broilers.

Sippers By Design

Design and manufacture of specialty custom-shaped drink containers.

Max Flight

Manufactures interactive virtual reality motion-platform game systems including networkable flight and roller coaster simulators.

Mahoning Valley Mfg.

A complete line of Imperial strollers, wagons and safari utility vehicles.

Xtreme Inflatables

Repair and service for all inflatable products.

See Coast Manufacturing Co., Inc.

Coin-operated binoculars and telescopes.

Formula K Raceways

Go-karts, kiddie cars and bumper boats, go-kart parts and tires.

Wells Fargo

Commercial insurance for inflatables and event planners.

Deltronic Labs Inc.

Ticket dispensers.

Soft Play

Leader in designing, manufacturing and installing soft contained playground equipment.

Davis & Davis, Inc.

Planning consultants for wet/dry attractions, mini-golf, go-kart tracks and laser arenas.

Muncie Novelty Co., Inc.

Admissions, financial equipment, printing and tickets.

Spectrum Sports

Climbing walls, ropes courses, go-karts and more.

Rides-4-U, INC.

New and used rides, kiddie, family, major and thrill.

Embed

Provides innovative IT products and services with a primary focus on card-based solutions and database applications for the leisure and retail industries.

Laser Star

Laser shooting galleries, laser tag, dark ride target systems, overhead target ranges.

Rio Syrup

Over 250 flavors, syrups and concentrates for shaved ice, sno cones, shushes, food colors. Now featuring Hawaiian Flower Cups.

GloCones

Flashing cotton candy cones.

Lazer Runner

Laser Tag Systems

American Changer

Bill and coin dispensers and counters, ticket machines and more.

Master Pitching Machine

Batting cages and pitching machines.

Ride Development Corp.

Electric floor, gas and battery-powered bumper cars.

Jane Farrell Turf and Carpets, Inc.

Commercial carpet, printed and decorative patterns, loop and cut-pile construction. Wall coverings in fluorescents, Class A fire rated. Colored turf, both traditional and neon colors.

Family Fun Corp.

Waterpark walls for rivers, bumper boat and splash down pools.

Coast to Coast

Coin-operated entertainment, crane machines.

Harris Miniature Golf Course

Design and construction of miniature golf courses and water rides.

Subway

Fresh food and sandwich options.

Sureshot Redemption

One-stop source for prize redemption counters at entertainment centers.

Enchanted Castle Studios

Fiberglass statuary and figures for restaurants, mini-golf, theme parks and other attractions.

Berk Paper & Supply

Concession supplies.

Comstock – Castle Stove

Commercial cooking equipment.

Klopp International, Inc. (Playmeter)

Quality coin counters and sorters.

Chestnut Identity Apparel

Uniform supply, embroidered apparel and flag manufacturing.

Quik N\’ Crispy (QNC)

Quik n’ Crispy greaseless fryer.

U.S. Bowling

Award-winning independent company brings bowling to your venue.

Art Attack

Theming, miniature golf, parade floats, 3D props, air-brushed murals, signage and art panels.

Store on Wheels

Importer and distributor of quality toys, lighting and novelties. Cater to the amusement, retail and entertainment industries.

Water Wars (T&D Enterprises of Brainerd)

Water Wars water balloon game, portable or startionary.

Price Chopper, Inc. Wristbands

Admission, financial equipment and wristbands.

Weldon, Williams & Lick

Admission systems and wristband ticketing.

Thomco Insurance (Fun Pro)

Fun Pro is an insurance program especially designed for party planners and party rental businesses.

Brunswick Bowling

Entertainment bowling center developer and manufacturer of bowling equipment and entertainment products.

Action Lighting Co.

Lighting supplies.

Aquaventronics

Research and development of interactive water games for use in the commercial amusement industry.

Splashtacular

Manufacturer of waterslides

Spectrum
LMap Powered by Silvercrest
Extreme Engineering
Funovation
Rebound Unlimted, Inc.
Embed
LAIGames