Amusement Park Insurance: Everything You Need To Know
Amusement park insurance is a specialised coverage designed to protect park owners and patrons from theme parks’ associated dangers and risks. Whether you’re the owner of a bustling theme park or a family-run carnival, understanding the ins and outs of amusement park insurance is vital to ensuring a safe and enjoyable experience for all.
In this blog, we will shed light on:
Why is amusement park insurance so important?
Amusement park insurance is the financial safety net that ensures thrill-seeking visitors and diligent park owners can enjoy the adrenaline rush of the roller coasters and rides worry-free.
For park owners, it’s a shield against unforeseen risks, legal liabilities, business interruption and potential financial loss. For visitors, it’s the necessary peace of mind that they are well-protected and cared for during their day of fun and adrenaline.
Top risks for amusement parks
Amusement parks in Australia face a myriad of risks. To best prepare for the twists and turns of running a theme park, you must consider all worst-case scenarios. Here are some of the most common challenges:
- Safety Incidents: Accidents, injuries, and ride malfunctions can lead to severe legal liabilities and reputational damage.
- Compliance: Failure to meet safety and operational standards can result in fines, legal actions, or even park closure.
- Weather Events/Natural Disasters: Australia’s climate can be relentless and unpredictable, with bushfires, storms, and floods posing significant risks to park operations.
- Public Liability Claims: Visitors who suffer injuries while on your premises may file public liability claims – leading to potential legal costs and settlements.
- Security Issues: Theft, vandalism, and even terrorism are growing concerns for amusement parks.
- Economic Fluctuations: Economic downturns can impact consumer spending on entertainment and leisure activities, impacting park revenue.
- Health Crises: The COVID-19 pandemic highlighted how unexpected health crises can cause devastation to consumer-dependant industries.
- Employee Training: Park employees must undergo adequate training in ride operation, first aid, and emergency response to prevent accidents and injuries.
- Reputation/Crisis Management: Negative incidents can quickly tarnish your reputation and, consequently, park attendance and revenue.
What attractions and rides can amusement park insurance cover?
Amusement park insurance varies depending on the needs of the business, but it typically includes the following types of rides and attractions:
- Roller Coasters (wooden and steel)
- Water Rides (log flumes, water slides, and lazy rivers)
- Ferris Wheels and Merry-Go-Rounds
- Drop Towers
- Swings, Chairlifts and Spin Rides
- Dark Rides (e.g. haunted houses)
- Bumper Cars
- Arcade Rooms
- Kiddie Rides (mini roller coasters, small carousels)
- Virtual Simulators
- Inflatables (bounce houses, obstacle courses)
- Live Entertainment
A series of unfortunate events: theme park insurance scenarios
Imagine this: your Australian amusement park, known for its iconic roller coasters, thrilling rides and attractions, is booming. You have a spotless safety record until a series of unfortunate events lead to some stressful insurance challenges…
Event 1: Ride Malfunction
One of your roller coasters experienced a mechanical malfunction mid-ride, causing it to stop with riders aboard. While no one was injured, the incident resulted in panic among the passengers, and the ride had to remain closed until repairs could be made.
Event 2: Severe Summer Storm
During repairs, the park faced an unforeseen weather event. A severe storm with heavy rain and strong winds damaged several rides and caused property damage throughout the park. This unexpected event forced the park to close temporarily.
Event 3: Patron Injury
During the park’s reopening, a visitor tripped and fell on a wet surface, fracturing their wrist. They filed a personal injury claim, alleging that the park had not correctly maintained the walkways.
Now, with comprehensive business/amusement park insurance, your business can bounce back from this triad of lousy luck.
- Machinery Breakdown Insurance would help cover the costs of investigating the malfunction, repairing the ride, and reimbursing passengers for any distress.
- Fire, Perils, and Storm Insurance would cover the damaged rides, infrastructure, and any costs related to temporary closures.
- Public liability insurance would handle the visitor’s injury claim, assisting in legal defence costs and potential settlements.
- Business Interruption Insurance would provide financial support to cover lost revenue during park closures.
- The park’s insurance might also include coverage for public relations expenses to help divert the negative publicity and rebuild business trust.
Following recent theme park tragedies, the leisure industry is grappling with a concerning insurance situation, and its impact is particularly harsh on smaller operators struggling to secure coverage.
Obtaining insurance has become an uphill battle for some park operators, leaving their amusement rides sidelined at theme parks or stored in sheds nationwide.
“Australian theme parks’ insurance prices have increased tenfold, from $150,000 four years ago to a dizzying $1.5m” – The Australian Amusement, Leisure and Recreation Association (AALARA).
Various factors can influence the cost of your policy, including:
- Your location
- Your chosen deductible
- Total number of employees
- The per-occurrence limit
- The general aggregate limit
Receive bespoke advice & guidance
It’s generally more cost-effective to purchase a comprehensive insurance solution rather than stand-alone policies. Knightsbridge are highly skilled and dedicated to securing the best deal for your business. We take the time to get to know you and your operations in-depth, and don’t give up until we reach a favourable outcome.
Reach out to Knightsbridge to get bespoke, industry-specific advice and secure a comprehensive amusement park insurance policy today.
Contact Knightsbridge Team