Waterslides Insurance And Liability
A white paper about safety and insurance considerations when deciding to install water amusements in your hotel.
Recognized expert in the field of waterpark safety issues and insurance.
The strong trend to add water amenities in hotels is causing hotel owners everywhere ask questions about slides and waterparks while they look for ways to head off competition from a new waterpark being built nearby or to gain a competitive advantage over local rivals. The two most common options are to add a slide to an existing pool, or to expand through new construction of a waterpark.From a cost perspective, the options are quite different – even though each requires an extensive due diligence effort by the property owner to uncover the true impact and long-term viability of such an undertaking.
Some hoteliers assume the financial piece will take care of itself in other words, the numbers either work or they don’t.Your ability to secure a loan will be a function of your skill in ‘selling’ the loan officer on a business plan.
One of the first questions that come up for most owners is: what about insurance costs? What about liability issues? What should you do if you are contemplating a slide or waterpark? You might be asking, “What else do I need to know?” And, “What resources are available to educate me through the process? What are the intangibles that should be considered?”
The simplest advice I can offer is to be prepared on both a financial level as well as an operational level. Since every facility is unique, there are no standard operational manuals as each situation must be tailored to the environment.The best resource is always someone who has been through the process, however finding a communication opportunity with a perceived competitor may not be easy to do.
Other great resources are the contractors, manufacturers and vendors who service the industry.As experts, they understand the challenges that slide and waterpark operators face and how to make adjustments so future operators don’t fall into the same problem. Insurance agents and insurance companies can be an excellent source of information as well, assuming they have relevant experience. Insurance professionals often operate as ‘gate keepers’ to the insurance companies, much like loan officers protect the best interests of lending institutions.As a result, tapping into their knowledge base can be a powerful tool.
Approaching an insurance company
If you decide to approach an insurance company directly, how and when you approach is very important, as this can backfire.By definition, insurance companies are very cautious.So, when a prospective waterpark owner calls to inquire about various what-if scenarios (do I have coverage for or I’m thinking about installing a water slide). caution flags begin popping up.
Whether any of your inquiries actually materialize, you many have given yourself a problem, as insurance companies tend to take these kinds of questions very seriously.At a minimum, your conversation will be documented, while some investigate even further with follow up phone calls.Some will even go a step further by threatening to cancel your current coverage.Normally, coverage cancellation can only occur when your operation is materially different than what the insurance company was told and understands to be your primary business.Bottom line, it is always best to ask for permission, as insurance companies are not very forgiving.Your best intentions could leave you without insurance.
Be proactive, not reactive.
Insurance is the proverbial time bomb.As an operator of a facility contemplating a new slide or waterpark you must choose a single path to address the insurance issue:
- Approach the insurance company before the equipment is purchased; or
- Inform the insurance company of your purchase after it is installed.
You might think that either option would result in similar outcomes. However, providing more time for an insurance company to analyze your specific situation can only increase the likelihood of a positive outcome.
So, simply taking the high road (option #1) does not guarantee smooth results; there are usually some bumps along the way.However, the proactive approach allows you to retain control a little bit longer, further ensuring a favorable outcome.
Partnering with an insurance broker who has experience in this industry can be extremely important to your success.It’s true that any insurance professional will sell you on their ability to find a solution.It’s their job, after all.But you must consider:
- Am I confident my agent/broker will find the best solution for me?
- Does my agent understand water slides and waterparks equal to or better than I do?
- What value/knowledge does the agent provide to enhance customer safety?
- Does my agent insure other water features that are similar to what I am considering?
Have confidence. Shop the market.
Before approaching your insurance company you should anticipate all of their questions and have sound and rational responses at the ready. You want give the insurance company the impression that you know more than they do about your slide or Waterpark, and that you have thoughtfully created operational policies and procedures that focus on safety.
It is true that some insurance companies categorically refuse to insure hotels with slides or waterparks.Yet, the amount of activity in this industry has many of these same companies rethinking their appetite for the business.If you are adequately prepared, you might be the person to change the viewpoint of your insurance company.But you should never assume that your current insurer is the best fit for you.You’ll still need to shop the market.
Shopping the market when you still maintain control is ideal.There is nothing positive about ‘shopping’ when your carrier has dropped you and you are sitting with zero coverage.
A few tips to allow future flexibility and provide options for your insurance program:
- Build a slide that can be gated or closed.
- Share your park design with your insurance broker/company prior to commencing construction. Seek their input and approval.
- Talk to an insurance agent who has experience in this specific area and contacts with the major underwriters who have experience.
- Have a plan in place to address slips and falls, cuts and bruises.
- Facility Rules. You must write them, share them, and enforce them. Signage package?
- Slide Rules. Follow the manufacturer’s rules and enforce them
- Lifeguard or slide attendant?Or neither?
- Injury waiver and proper use.
- Franchise Flag requirements:Does a slide change your insurance requirements?
- Financial Requirements:Does a slide change your insurance requirements?
This should provide you with some ideas to navigate through the process of adding a slide or waterpark to your hotel.
If you would like to discuss your specific project in more detail feel free to contact Joe Blee who really understands the insurance business and the waterpark owner.
Christensen Group-Insurance Resources International
11100 Bren Road W.
Minnetonka, MN 55343