SPECIALTY LINES MARKETS
Security measures and rate increases
take some of the fun out of recreational risks
By Larry G. France
What are "Pay for Play" risks? Basically they include a recreational activity where a fee is charged to participants. Of the 14 types of risks we have included in "Pay for Play," amusement parks is the one most affected by security measures brought about by 9/11.
Disney had a scare regarding its water supply early this year. Amusement parks have been forced to hire extra security to oversee admissions to the parks, check carry-in packages, search delivery vehicles, and maintain crowd observation. Parking areas may have been reconfigured to keep vehicles at a certain distance from main buildings and entrances to the park, and DOT barriers have been placed in order to prevent vehicles from driving into buildings or other secure areas. No unscheduled deliveries are permitted. Bag searches have occurred at some locations. The higher profile of the facility and the larger the crowds that are attracted, the more it can be a terrorist target.
All of these necessary measures are a cost factor for the park and will place a strain on its bottom line. Amusement rides will vary in rate depending on whether they are permanent or travel to and from different locations. The type of ride is also a factor. Tilt-a-whirls are a bigger risk than small kiddie car rides that run on set tracks. Close inspection of maintenance records will be a key loss control factor, along with the specific state's requirements for amusement park ride inspections. In recent years states have put stricter rules in place. The problem is that most states do not have personnel with any knowledge of the structure of amusement rides and what specific areas to concentrate on checking. An amusement park is not like any other type of risk that they see in normal day.
Water parks and facilities that have water slides on premises are finding that the possible markets to approach are on a rapid decline. As a class of business, water parks and slides have not had a good loss history. Most of the problems stemmed from the lack of trained supervision at the slide itself.
For instance, often, when one rider has completed the slide, he or she does not move away from the impact point of the next rider. A descending rider creates a tremendous force. Numerous accidents result in quadriplegic injuries. Due to that type of experience, markets have either declined to place this type of risk or have established a minimum premium that discourages the writing of the business. Given the climate for the placement of reinsurance, underwriters do not want to use up capacity for this class.
Other types of risk that make up "pay for play" risks are animal rides, bowling centers, campgrounds, canoe trips/river rafting, driving ranges, horse and carriage rides, hot air balloon rides, miniature golf, paintball centers, tennis & racquetball centers, and trail rides.
Any type of operation that includes animals can be unpredictable. Animals can bolt due to sudden noise coming from a motor vehicle or other source. In the case of carriage rides, horses are walking among vehicle traffic. When the carriages are parked, children want to pet the horses. Although the vast majority of these animals are docile, one cannot always know what may provoke a bite or kick.
In the distant past, bowling centers were very difficult to insure. The industry cleaned up most of the problems, but still some areas need special attention. Property is still an issue because of the large open space that can fuel a fire with enormous amount of oxygen. The chemicals used to coat the bowling lanes once were very flammable, but new products have lessened the fire hazard. With the property market on an upward swing in rates, renewals can bring increases of more than 25%.
One problem that has plagued bowling centers is slip and falls. Liquids spilled by bowlers can become a hazard and be the cause of a claim. Most are real slip and falls, but in the past many have been "created." One bowling center operator who was besieged with this type of claim installed cameras so that real slip and falls could be documented and fraudulent ones dismissed. His premium took a very welcome decrease.
Any risk that has parking facilities--tennis and racquetball, miniature golf, paintball centers among others--will have security issues. Proper lighting and security guards are a must for late-night leagues.
Oil and other types of spills also can become hazards. With bowling, paintball, miniature golf, tennis and racquetball canters, there will be food and liquor exposures. Most markets that specialize in these types of risk will be able to provide coverage, but stand-alone liquor coverage also may be available.
The numbers of markets that participate in "pay for play" have decreased. Some of the remainder have been forced to reduce capacity and/or coverage. Plan to provide much more detail than in the past and understand that a long lead-time is the standard in today's market place.
The following have responded to our survey and indicated that they can provide coverage for all or a portion of "pay for play" risk. Go to www.insurancemarketplace.com for additional information.
Burns & Wilcox Ltd.
30833 Northwestern Hwy., Ste. 220
Farmington Hills, MI 48334
Contact: Call 800 number for local branch
Phone: (800) 521-1918
An MGA/E&S broker operating in all states except HI, MA, ME, NJ and NY with primary limits of $1 million and excess limits of $10 million. Target markets vary by company. Also offered are inland marine, event cancellation and property coverages. Various carriers are used to place coverage.
Continental/Marmorstein & Malone
P.O. Box 586
305 Rte. 17
Paramus, NJ 07652
Contact: William H. Malone Jr., VP
Phone: (800) 932-0249
Fax: (201) 261-8922
E-mail: bmalone@ca-group.com
Web site: www.ca-group.com
An MGA/E&S broker that operates in NJ and NY only with limits of $1 million/$2 million. Will write most classes, with umbrella and EL also available. Carriers are American Empire, Essex, Interstate, Nautilus, Admiral, Western World and U.S. Liability/Mt. Vernon.
Crusader Insurance Co.
23251 Mulholland Dr.
Woodland Hills, CA 91364
Contact: Jim Pelletier
Phone: (800) 669-9800
Fax: (818) 591-9856
Web site: www.crusaderinsurance.com
An insurer that operates in WA only with limits of $1 million/$2 million. Target market is bowling alleys. Crusader is an A rated company.
Delaware Valley Underwriting Agency, Inc.
420 S. York Rd.
Hatboro, PA 19040
Contact: Frank Seigel
Phone: (800) 772-2207
Fax: (973) 377-7779
E-mail: seigel@dvua.com
Web site: www.dvua.com
An MGA/E&S broker operating in DE, MD, NC, NJ, OH, PA, SC, VA and WV with limits of $10 million. All carriers are A rated or better.
Entertainment Brokers International
10940 Wilshire Blvd., 17th fl.
Los Angeles, CA 90024
Contact: William M. Cody
Phone: (310)-824-0111
Fax: (310) 824-5733
E-mail: william.cody@entbrokersintl.com
Web site: www.entbrokersintl.com
A managing agent that operates in all states with GL limits of $30 million. Will not write amusement rides, canoe trips/river rafting, hot air balloon rides, paintball centers, trail rides (equine) and water parks. Clarendon is the A rated carrier.
Gulf Insurance Group
125 Broad Street, 8th fl.
New York, NY 10004
Contact: Tom Gillingham, Glen Sudol
Phone: (303) 428-5400
Fax: (703) 428-5900
Web site: www.outdoorinsurance.com
An MGA operating in all states with limits of $1 million primary and $5 million umbrella/excess. Will write all lines excluding comp. Will not write amusement parks/rides, bowling centers, hot air balloon, paintball, tennis (racquet centers), and water parks. Gulf serves as the carrier.
H.R. Keller & Co., Inc.
1520 Sheridan Dr.
Buffalo, NY 14217
Contact: Rob Martin, John Barton
Phone: (800) 424-2202
E-mail: rmartin@kellerandco.com
A wholesaler/general agent that operates in NY only with limits that vary by company. Will look at all leisure risk exposures and will also offer property, inland marine and WC. Various admitted and nonadmitted carriers are used.
Izzo Insurance Services, Inc.
7234 W. North Ave.
Elmwood Park, IL 60707
Contact: Mike Jones, Sammie G. Van Cleave
Phone: (800) 800-1704
Fax: (708) 452-1777
Web site: www.izzoinsurance.com
An MGA/agency that operates in all 50 states with limits of $1 million-$2 million employers liability. Leisure risk program consists of monoline WC and monoline EPL. Hartford, Zenith, Alea, AmTrust and AIG are the carriers.
K&K Ins. Group, Inc.
1712 Magnavox Way
Fort Wayne, IN 46804
Contact: Mark Beck
Phone: (800) 637-4757
Fax: (260) 459-5967
For Canadian risks:
Phone: (800) 753-2632
Fax: (905) 602-9141
E-mail: kk_general@kandkinsurance.com
Web site: www.kandkinsurance.com
A managing general underwriter whose progams are available in all states. In-house authority/capacity may vary by program or class of business. Target markets are amusement parks/rides, animal rides, bowling centers, miniature golf, family fun centers, canoe trips/whitewater rafting, outfitter & guides, horse & carriage rides, camps & campgrounds, tennis & racquetball centers, health clubs, trail rides, ski resorts, watercraft rental, billiard parlors, skate parks and water parks. Will not write parasailing. Other coverages offered are full commercial packages, including GL, liquor liability, vendor coverage, ride liability, fireworks liability, property, business income, commercial auto, inland marine, crime, WC and excess liability. All carriers are rated A or higher.
M.J. Kelly Co., Inc.
4415 E. Sunshine
Springfield, MO 65809
Contact: Lori Drake, Shawna Cooke, Heather Duffield
Phone: (800) 725-7211
Fax: (417) 883-7103
Web site: www.mjkelly.com
An E&S broker that operates in AR, FL, IL, MO, MS, OK and TN with limits of up to $1 million/$2 million. Target markets are amusement parks/rides, canoe trips, horse rides, hot air balloon rides, trail rides, and water parks. Will also write special events, liquor liability, and property. All carriers are rated A or better.
Market Finders Ins. Corp.
P.O. Box 6549
Louisville, KY 40206
Contact: Karen Cornett, Charlene Curry, Susan Hudgins
Phone: (800) 626-5660
Fax: (502) 426-7970
E-mail: kcornett@mfic.com, ccurry@mfic.com, shudgins@mfic.com
Web site: www.mfic.com
An MGA/E&S broker that operates in IN, KY and WV with limits of $1 million/$2 million. Will offer inland marine, property, and horse mortality. Essex and Colorado Western are the carriers.
Midwestern General Agency, Inc.
255 NW Blue Pky.
Lee's Summit, MO 64063
Contact: Bianca Betts, Carol Mauslein, Todd Black
Phone: (800)-788-4347
Fax: (816) 246-1290
Web site: www.mgakcmo.com
An MGA/broker that operates in IL, KS, MO and NE only, with limits of $5 million/$5 million. Target markets are miniature golf, driving ranges, paintball, and campgrounds. Will offer property/inland marine. Essex, Nautilus and Scottsdale are the A rated carriers.
North Island Facilities, Ltd./NIF Pro
30 Park Ave.
Manhasset, NY 11030
Contact: Candace Murray
Phone: (800) 892-8892
Fax: (516) 869-8719
E-mail: marketing@nifgroup.com
Web site: www.nifgroup.com
An MGA/E&S broker operating in CT, DC, FL, GA, MA, MS, NJ, NY, PA, RI and VA with limits of $1 million. Will also write umbrella.
Prime Insurance Syndicate Inc./I.E.B.S.
P.O. Box 4439
Sandy, UT 84091
Contact: Pete Andersen
Phone: (877) 243-8181
Fax: (877) 452-6910
E-mail: petea@primeis.com
Web site: www.primeis.com
An MGA (IEBS)/insurer (Prime) that operates in all states with unlimited limits. Will look at all classes and risks. Prime is a C rated carrier; Lloyd's is rated A.
Robert A. Schneider Agency
5620 Smetana Dr.
Minnetonka, MN 55343
Contact: Jody Stolp, Walt Cantley, Teri Benson
Phone: (800) 832-6038
Fax: (952) 938-0701
E-mail: rs@rasinc.com
Web site: www.rasinc.com
An MGA/E&S broker operating in IA, MN, ND, SD and WI with limits of $2 million. Will not insure any type of motorized racing events. Will offer auto, property, inland marine and umbrella. Nautilus, Penn America, Essex, and General Star are the carriers.
Roush Insurance Services, Inc.
P.O. Box 1060
Noblesville, IN 46061
Contact: Gail C. Pierce, Anthony W. Armor, Scott G. Sackers
Phone: (800) 752-8402
Fax: (317) 776-6891
E-mail: gail.pierce@roushins.com tony.armor@roushins.com scott.sackers@roushins.com
An MGA that operates in IL, IN and OH only with GL limits of $1 million/$2 million aggregate, with excess up to $20 million; and property of $1 million in-house (higher limits available). Target markets are trail rides, water parks and hot air balloon rides. Will also cover D&O, (auto, and umbrella/excess liability. Associated International, Century Surety and Evanston are rated A or better, and Atlantic Casualty is rated B.
Russell Bond & Co., Inc.
295 Main St., Ste. 866
Buffalo, NY 14203
Contact: Jeff Latke (Ext. 147), Chris Moyer (Ext. 149), Alan Hall (Ext. 150)
Phone: (800) 333-7226
Fax: (716) 856-0403
E-mail: info@russellbond.com jlatke@russellbond.com cmoyer@russellbond.com ahall@russellbond.com
Web site: www.russellbond.com
An MGA that operates in NY only with limits of $2 million/$3 million and higher. Target markets are amusement (kiddie rides), canoe trips, golf driving ranges, campground owners, horse & carriage rides, Miniature golf, and tennis/racquet centers. Also offered are GL, liquor liability and excess liability.
S.H. Smith & Co.
41 N. Main St.
West Hartford, CT 06107
Contact: Jeff Parmenter
Phone: (800) 356-0168
E-mail: jeffp@shsmith.com
Web site: www.shsmith.com
An MGA that operates in CT, MA, ME, MN, NH, NY, OH, RI, SD and VT with limits of up to $10 million. Target markets are bowling centers, campground owners, golf driving ranges, miniature golf, and tennis/racquetball centers. Also offered are liability, umbrella, liquor liability, and property. Nautilus, Lloyd's, and Northfield are the carriers.
Unifax Insurance Systems, Inc.
23251 Mulholland Dr.
Woodland Hills, CA 91364
Contact: Jim Pelletier
Phone: (800) 669-9800
Fax: (818) 591-9856
An MGA that operates in Washington state only with limits of $1 million/$2 million. Target market is bowling alleys. Crusader is the A rated carrier.
Western World Insurance Co.
400 Parson's Pond Dr.
Franklin Lakes, NJ 07417
Timothy P. Hochkeppel
Phone: (201) 847-2600
Fax: (201) 847-1010
E-mail: t.hochkeppel@westerworld.com
Web site: www.westernworld.com
An insurer that operates in all states with limits of $1 million/$2 million. Will offer GL. Tudor and Western World are A rated or better carriers .
Yates & Associates Insurance Services
2100 E. 4th St., 2nd fl.
Santa Ana, CA 92705
Contact: Santa Ana--Alex Zardeneta and Betty Haun, Stockton--Robert Mestayer
Phone: Santa Ana (800) 660-1125, Stockton (800) 464-7042
Fax: Santa Ana (800) 378-8588, Stockton (800) 472-7043
Web site: www.yates-assoc.com
An MGA that operates in CA only with limits of $1 million/$2 million/$1 million. Target markets are animal rides, campgrounds, miniature golf/driving ranges, amusement rides, outfitters/guides, and paintball centers. Various admitted and nonadmitted carriers are used to place coverage. *
