Do you want to know how much it cost to insure a water park business? If YES, here are 11 best general liability insurance policies for water parks.
Water parks are a wonderful and very popular way for people of all ages in the United States to cool off during the hot summer months and have some fun at the same time. These parks offer whole family fun as well as reliable entertainment for teenagers, church and social groups, birthday parties, dating couples, and married couples.
Some parks in the United States also offer water adventures that range from a wading area for toddlers to roller – coaster type tubes and waves for the older and braver. The ticket booths of water parks are usually located at the entrance of the park.
The major zones include kiddie areas (pools and play areas), water slides, swimming pools, wave pools, and water coasters.
Coupled with flotation devices, water parks include snack bars/restaurants; lockers and changing areas with rest rooms; towels and chairs; and picnic areas. There are also some water parks that serve alcohol on the premises, especially in large resorts.
Do Water Parks Need Insurance Cover to Protect the Business?
Almost everyone have all been to one of these and enjoyed a great time but oftentimes we hear about a water park that had a setback or an issue with a claim or an injury. No one wants an accident to happen, but accidents can and do occur at water parks along with related lawsuits and claims.
Even though drowning is rare, but it does happen in water parks in the United States. Swimmers can slip and fall on wet surfaces. Lifeguards can become distracted.
Even children can ignore posted signs and get hurt, roughhousing teenagers can become injured, patrons can ignore no diving signs and injure themselves, water can become contaminated and sicken swimmers, patrons wearing improper clothing and jewellery can become injured, patrons can be struck by lightning, and patrons and employees can become sick from pool chemicals.
Most insurance companies won’t offer water park insurance and once a park has a large claim, they more or less tend to go out of business.
Many insurance companies in the United States will deny coverage to water parks for a handful of reasons: the park has too many claims, they are in the wrong part of town, no coverage offered in the state, or they have too many slides that may not be considered safe. Once a water park has any of these issues, it can be very frustrating to get proper coverage.
Insurance Policies for a Water Park
Business insurance is designed to protect a business owner’s financial assets and it is a very necessary investment for a Water Park. It is advisable that a water park should invest in coverage even before the very first interaction with a customer.
Although the cost of insurance may seem high for a brand new business, it is ideal to be proactive when it comes to protecting business assets. After all, no one can buy insurance to cover a loss that has already occurred.
1. General Liability Insurance
Cost
- Median Cost per year: $350 – $700
- Policy limit:$1 Million per occurrence
- Policy deductible: $350 – $600
All businesses, irrespective of industry, face risks that are expected to be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance (or CGL). While businesses aren’t legally required to carry general liability insurance, running a water park without it is extremely risky.
If the business is sued, the business owner could end up facing fees totalling hundreds of thousands of dollars (or more). Having a sufficient CGL policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.
Risk management practices required by water parks’ General Liability insurance carriers include proper inspection and maintenance of electrical equipment; proper and regular testing of pool water for contaminants; training and hiring of certified lifeguards; regular drills for evacuation procedures; CPR training and first aid equipment;
Coast Guard – approved life jackets for patrons who want or need them; posted signs near deep areas for non – swimmers, signs and enforcement of proper attire for patrons, signs for steps and wet pavement, and keep out signs for electrical areas; strict enforcement of height/age requirements; proper supervision of swimmers and others (especially children).
They also include evacuation plans for inclement weather; proper communication systems for patrons (intercom system for evacuation and lost children); walkie – talkies, bullhorns, and whistles for lifeguards; posted areas for lost children; proper and regular inspection of flotation devices;
proper monitoring of time and space distance between patrons; posting of monitors at all exit/entrance areas and monitors to ensure the proper capacity of persons on each device; and regular maintenance of pool bottoms, steps, and ladders.
2. Commercial Property Insurance
Cost
- Median Cost per year: $850
- Policy limit: $1 Million per occurrence
- Policy deductible: $320
Water parks also require commercial property insurance for their buildings, rides, games, and other attractions. These commercial property insurance can protect multiple types of physical assets, including buildings, equipment, inventory, and supplies.
Note that most water parks in the United States need robust commercial property insurance because they have many expensive features to protect. A new water park owner needs to ensure their policy’s limits at least meet the rebuilding cost of all the park’s buildings, rides, and attractions. Commercial property insurance is generally included in a business owner’s policy (BOP).
3. Workers’ Compensation Insurance
Cost
- Median Cost per year: $1,900
- Policy limit: $1 Million per occurrence
- Policy deductible: $600
Water Parks, just like other businesses that have employees, are expected to acquire and protect them with workers’ compensation insurance. Note that this coverage protects against both work – related injuries and illnesses, and it is usually required by state law if your business has employees.
4. Commercial Umbrella Insurance
Cost
- Median Cost per year: $700
- Policy limit: $1 Million per occurrence
- Policy deductible: $350 – $270
Have it in mind there is an upper limit to the amount of liability protection that primary insurance policies offer. Commercial umbrella insurance tends to provide additional liability coverage, often in the millions of dollars. According to experts, commercial umbrella insurance is very crucial for water parks because a single incident could result in one or more extremely expensive lawsuits.
If someone drowns or multiple people are injured at once, the resulting liability costs could easily exceed a primary policy’s limits. Commercial umbrella insurance is included in certain package policies and is also available on its own.
5. Business Interruption Insurance
Cost
- Median Cost per year: $1,100
- Policy limit: $1 Million per occurrence
- Policy deductible: $350
In a business as large as a Water Park, recovering from a disaster can take a lot of time when you need to rebuild attractions, and bills don’t necessarily stop coming during that time. This business interruption insurance can offer supplemental revenue while the business recovers from a disaster.
Note that without adequate ticket sales providing revenue following a disaster, the supplemental payments from business interruption insurance could more or less save your water park from bankruptcy. For many businesses that need to rebuild, this insurance is the difference between closing permanently and eventually reopening.
6. Crime Insurance
Cost
- Median Cost per year: $650
- Policy limit: $1 Million per occurrence
- Policy deductible: $150 – $270
Commercial property insurance is known to protect against third-party theft, but it often excludes stealing by employees. Nonetheless, if you want protection against employee theft, consider getting crime insurance. Have it in mind that this insurance offers coverage for a wide array of illegal and dishonest employee actions.
A lot water parks in the United States choose to get crime insurance because multiple temporary and part – time employees handle money, which gives them opportunities to steal. Even a single employee can steal a significant amount if they have the right opportunity.
Conclusion
Although it is pertinent to invest in business insurance, it should not be your frontline defense. Indeed, insurance will compensate for your business’ financial losses after an incident occurs, but it is much better to avoid losses altogether. Having a signed waiver/release form for all patrons of the park should be mandatory.
Parents or legal guardians should sign a waiver/release form in addition to having the minor’s signature. Although most of these waivers cannot prevent a lawsuit from happening, they can help to greatly reduce the amount of damages owed by the park’s owner.
The best protection for your water amusement park business is to have extensive and adequate insurance with sufficient limits for proper coverage in the unfortunate event of an accident and/or lawsuit.