A family fun center is like a bubble of joy. You cross the threshold with your family and friends, and you’re transported into entertainment heaven. There’s a 1,200-foot go-kart track, a laser tag arena, a ropes course, a well-stocked game room and redemption prize store, and the crème de la crème of inflatable obstacle courses fit with a 25-foot slide. What a grand day out.
Unfortunately, bubbles are inherently vulnerable to popping. Contact with a dry surface, dry air or some sudden air turbulence, and ‘POP’ they’re gone. The same can be said for family fun centers. One go-kart crash resulting in serious bodily injury, one broken ankle on a faulty ropes course, one claim of abuse or molestation against a worker at a kid’s laser tag party, and that bubble of joy can burst abruptly.
There’s an awful lot of competition among family fun centers, according to Travis Walker (pictured above), senior underwriter at K&K Insurance, a managing general underwriter (MGU) that specializes in sports, leisure and entertainment insurance products. That rivalry comes down to: Who’s got the biggest inflatable slide? Who has the longest go-kart track? Who can host the best parties with the most attractions? Who provides the most fun?
Of course, that desire to run the best and most exciting family fun center is understandable, but it also introduces new and more complex risks for business owners to contend with. One core issue that causes problems is the supervision of attractions within family fun centers, and the correlating likelihood of bodily injury.
“Some of these inflatable devices have 25-foot or 30-foot slides and can have 25 people on them at any one time. It gets really hard to supervise some of these bigger devices, which means the potential for bodily injury is higher,” Walker explained. “Go-karts are also becoming increasingly problematic for family fun centers. Oftentimes, you have 16 or 17-year-olds supervising children and adults. It doesn’t always work out when a teenager is trying to tell an adult: ‘Pull your hair back,’ or ‘Please go slower’. It’s a challenging risk.”
As an MGU dedicated to writing sports, leisure and entertainment insurance products, K&K Insurance welcomes the whacky and wonderful risks that are both present and emerging in the family fun center space. But there will always be new devices – whether that’s a different type of go-kart, or a particular brand of inflatable house – that K&K’s specialist underwriters have never come across before. This is why it’s critical for brokers and agents to be as in-depth and detailed as possible on their submissions.
“One thing we always look for when underwriting a family fun center is a complete inventory of what they have,” said Walker. “A broker might write down that the family fun center has a ‘Monster Truck House Bouncer’ – and we might not have any idea what that is. When you Google it, there are 13 different variations of what that thing might be. So, we want everybody to drill down and explain exactly what they have, and in many cases, to provide the manual and recommended procedures for each attraction. That helps us to underwrite these risks.”
When operating something like an inflatable obstacle course, it’s “imperative to follow the manufacturer’s recommended procedures,” otherwise there could be challenges if a claim should arise, according to Lita Mello (pictured below), senior vice president, recreation division, K&K Insurance. If there’s a product fault or defect claim, for example, it could be very difficult to get the manufacturer to take a tender if the users were not following the manufacturer’s recommended procedures.
Another risk that is unfortunately prominent in the family fun center space is abuse and/or molestation. This risk is amplified tenfold when there are minors or children involved in activities, thus leaving family fun centers hugely exposed. Abuse and molestation insurance coverage is widely available, as long as insureds meet certain standards and adhere to best practices.
“Insurance agents, brokers and producers can help clients in this space if they work with a specialist organization, like K&K Insurance, that really understands the risks,” Mello told Insurance Business. “We can guide them as they go into a client’s operations, look at the various exposures and work with clients to make sure they’re addressing their risks appropriately. That’s going to make it easier for them to get coverage from an insurance market that has allegedly seen some tightening in recent months.
“Brokers and agents have access to ACORD applications. While they can give you limit and coverage amounts, they don’t necessarily give us the details that we want or need in order to appropriately underwrite all of the exposures for family fun centers. At K&K Insurance, we have a litany of supplemental applications based on the exposures that these industries have. We require those too, in order to get a full picture of the risk at hand.”
