Guide to Insurance for a Family Entertainment Center or Indoor Playground
Indoor playgrounds and family entertainment centers are a popular place for families to spend time. They’re also a great business to be in, allowing you to work in a fun environment and bring joy to families while still earning a good living.
However, like any other business, there are some risks that are inherent in the indoor play center world, and that means you need insurance to make sure you’re protected. Let’s take a closer look at what kind of insurance your indoor playground might need, and why it’s important.
The first kind of insurance you need for your family entertainment center business is for the indoor playground equipment itself.
Commercial custom playground equipment is well made and should last a long time without needing repair or replacement, but wear and tear does happen. Not to mention that kids are not the gentlest of people! If your equipment is damaged, this insurance will cover the cost of repair or replacements.
Of course there is a deductible for this kind of policy, but it’s a lot better than the replacement cost that could be in the tens of thousands for certain equipment.
The more popular your family entertainment center is, the more important this kind of equipment is.
Soft Play Area Insurance
Insuring your indoor playground equipment against damage is a good start, but it’s not the only equipment related insurance you need.
Many family entertainment centers choose to have various areas for different ages of child, and a common favourite is the soft play area. However, no matter how soft that area is, there’s always a chance (however unlikely) that a child or their adult companion will be injured using the space.
Soft play area insurance is specific coverage that will protect your business if that happens.
Business Income Insurance
Closely tied to equipment insurance is business income insurance.
If your indoor playground equipment is damaged to the point where you can’t open your indoor play center to the public, or where you have to reduce capacity or rates because some of your equipment is off limits, you’re going to experience a loss of income.
Business income insurance is designed to fill that gap while you are getting your equipment repaired or replaced. So you won’t have a dramatic drop in your earnings, and you can take the time to get your indoor playground equipment safely fixed and reinstalled for the families that use your facility.
Public Liability Insurance
Public liability insurance is another very important type of insurance your family entertainment center needs.
Modern playground equipment is designed to be as safe as possible, but accidents still happen from time to time. Whether it’s a child that it injured while they are on your indoor playground equipment or a slip on a wet floor, you could be liable if someone is hurt at your facility.
Public liability insurance covers your business against claims for injuries that are sustained at your indoor playground, so if you are sued, you don’t have to pay out of pocket.
One word of caution here: make sure that you get sufficient coverage on your public liability policy. If you don’t have enough cover, you could still be in trouble if a serious injury or incident occurs.
Some of the insurance your indoor playground business will need is specific to running a family entertainment center, but you will also need more common types of insurance like property insurance.
This is insurance that covers the building your business is in, and the contents of that building – similar to your home insurance.
This kind of insurance would cover you if your premises was robbed, or if you had a fire that damaged or destroyed your business. Again, you need to be careful to ensure that you have enough coverage to cover the full value of your property and the contents of the building, so that you are always covered for replacement costs in the event that something happens.
Flood, Earthquake and Wind
Depending on where your indoor playground business is located, you might be at risk for natural disasters like floods, earthquakes or extreme wind events like tornados or hurricanes.
There is specialty insurance available for those kinds of things, and that insurance will cover you if your business is destroyed or damaged by that kind of event.
Many businesses won’t need this kind of insurance, but if you are located in an area that these events are more common, you should certainly consider adding them to your insurance coverage. A good insurance broker will be able to recommend whether you need these kinds of policies, and how much coverage you should get.
Active Shooter Insurance
No one wants to think about this possibility, and you probably take steps to ensure that your family entertainment center is safe from uninvited people and firearms, but there’s always a chance, no matter how slim, that you will have an active shooter incident at your indoor playground.
This insurance helps to protect your business if that happens and will cover you for injuries and damage in the event that it does.
Cyber insurance is a relatively new type of insurance coverage, but if you use computer systems to store customer and business information, it’s a good idea to consider this kind of insurance.
Cyber insurance protects your business against hacks and ransomware attacks and helps to ensure that if you do suffer data loss due to criminal activity, you’re covered against your losses and privacy related claims from customers and business associates.
Business Vehicle Insurance
If your indoor playground business has business vehicles that you use to transport people or goods and equipment, you need to have special business insurance for those vehicles.
This kind of vehicle insurance covers your vehicles when they are used in the course of business, and while it usually costs more than regular vehicle insurance, it will cover you and your vehicles under more circumstances than a typical vehicle insurance policy.
Be aware however that when you have business vehicle insurance, you are often limited who can drive those vehicles. They will need to have a clear driving record and often they need to be pre-approved by your insurer.
If you have employees working at your family entertainment center, you probably need to have them signed up for worker’s compensation insurance. This is a special kind of insurance that covers employees for medical expenses and lost time at work in the event that they are injured at work.
While it is rare for employees to be injured at work, there’s always a chance someone might slip and fall on duty, and if you’re not covered by workmen’s compensation, you might be subjected to big claims.
If you sell products or food at your family entertainment center, then you need to have a products liability policy. This will protect your business against claims for defective products or spoiled food.
While you can’t always guarantee that everything you sell is safe, if you are the person selling it, you will be liable if something goes wrong.
Things to Consider When Buying Indoor Play Center Insurance
Now that you know what kind of insurance you might need for your indoor play center, let’s look at some of the things you might want to consider when you’re buying and managing that insurance.
1. Use a Professional Broker
You might be able to do your personal insurance yourself, but when it comes to business insurance, you really do need to use a professional broker.
Insurance professionals will be able to advise you about the type and amount of coverage you need based on your business’s risk profile, and they will ensure you are neither under nor over insured.
Professional insurance brokers will also know what the legal requirements for insurance of a family entertainment center and can advise you if the rules change in future.
2. Factor It Into Your Overheads
Business insurance for your indoor play center is going to be an ongoing expense, and while insurance is always a “grudge purchase” you can recoup the costs by including it in your overhead costs. That way, when you calculate your rates for customers, insurance is included, and the people who use your facility will be contributing to your insurance bill.
3. Read the Fine Print!
In most cases, insurance policies are based on certain assumptions. Your insurer will expect you to take specific actions to reduce your risk. This might include things like having safety signage, or getting your equipment inspected regularly. If those conditions are not met, your insurance might not cover you in the event of an incident. So make sure you always read the fine print and meet or exceed policy requirements.
4. Create Rules and Enforce Them
It’s not only what you do with your facility that can influence insurance payouts, but also how well you enforce usage rules.
It’s very important to ensure that you have clear policies about who can use which equipment and how it should be used, and that you enforce those rules. Even though some patrons might want to break the rules, if they do that and get hurt, you could still be on the hook.
5. Research Your Location
It might be tempting to choose the cheapest location for your family entertainment center business, but sometimes, cheaper locations cost less because they’re in less than desirable areas.
This means there’s a higher chance that your business will be vandalized or targeted by criminals and means that your patrons won’t be as safe while they’re in your parking lot.
While you’re considering locations, consider investing in additional security systems too. Not only will they keep your business and customers safer, but they might also lower some of your insurance costs – but your broker will have more information about that.
6. Invest in Quality Equipment
Finally, since many of the insurance policies mentioned here rely on the quality of your equipment, the best thing you can do to avoid expensive deductibles and insurance increases is to invest in the best quality indoor playground equipment you can afford.
Good equipment is made well, so there’s less chance it will wear out or break soon, and it’s made to the highest possible safety standards, so there’s much less chance of injury while anyone is using your indoor playscape.
Make sure your equipment is well made, meets all local code requirements, and is properly installed, and it will go a long way to ensuring you never have to use your insurance policies.
Talk to Assured Partners
If you’ve read this far, there’s a good chance you’ve realized just how overwhelming the insurance needs for a business like an indoor playground can be.
While it’s true that getting the right coverage set up can be a lot of work, it’s not something you need to worry about too often – so don’t let it discourage you from creating your dream indoor play center!
In most cases, you will only have to think about your insurance policy once or twice a year, and once everything is set up and in place, which is only to review your policies and ensure that you’re still covered for all your specific needs.
Assured Partners is a commercial insurance company that specializes in coverage for public spaces like family entertainment centers, and our team is ready to help. We work with our customers to assess their risks and individual needs, and to create insurance plans that keep them covered at the lowest possible rate.
So while it’s true that insurance for a family play space or indoor playground can be a little daunting, it’s not something you need to do alone. Contact us and get the professional advice you need to get covered and stay covered. Then you can keep building the dream, and we’ll make sure you’re always protected while you do.