When the 2008 financial crisis sent the economy south, family entertainment expenses followed. Now, however, macroeconomic trends suggest that Americans are ready to start indulging in some of life’s lighter pleasures.
However, family entertainment looks a bit different this side of the Great Recession. Entertainment spending is still modest and many families are opting for the “staycation”—often in the form of the local, low-cost entertainment of family entertainment centers, or FECs.
FECs boast a wide range of activities in one place for one price, alluring to consumers both in terms of their proximity and affordable entry fees.
Access to go-karts, miniature golf, bowling lanes, trampolines and zip lines obviously make for major liabilities and insurance placement challenges. However, industry leaders believe it also represents a major opportunity for savvy agents and brokers.
“The creativity in recreation centers is definitely a trend,” said Lorena Hatfield, marketing resources manager for K&K Insurance Group, which boasts its own entertainment center program for agents. “We’re seeing trampoline facilities and other unusual risks like water walking and human hamster balls come into play.
“While these activities may look entertaining, they definitely add to the risk level of the facility, and those activities may adversely affect premium or be excluded from coverage.”
As such, it’s often more convenient for producers to seek insurance for FECs through a program that boasts many policies. K&K’s entertainment center program, for example, offers property, general liability, inland marine, crime, commercial auto, liquor liability and excess liability insurance as well as workers’ compensation.
Limits are available of up to $25 million with no aggregate, and insurance is offered through an A+ rated carrier.
Hatfield says the underwriting expertise at K&K allows for agents and brokers without a background in family entertainment centers to be successful. However, there are a few things they can do to ensure their client is fully covered.
“Often [clients] overlook basic safety such as a parking lot that’s poorly maintained, stairs that are not well lit, wet floors or trees with dead branches that need to be trimmed,” she said. “Clients can reduce their risk of claims by taking a walk around the facility and taking a hard look at the upkeep of the premises. Slips, trips and falls consistently contribute to a majority of claims.”
Hatfield adds that there is “no real profile” for the ideal producer working on these accounts, and that there is plenty of opportunity out there. A full 25% of Americans said they had visited a family entertainment center in the last 12 months, with another 43% indicating they plan to visit one within the next 12 months.
And, as larger brokers are not targeting these accounts, main-street producers stand to gain a lot from working with FECs.
Of the more than 6,000 producers who work with K&K, Hatfield says “some specialize in sports and recreation risks, but many of the agents…only place one or two accounts with us.”
Producers working with K&K are not held to a volume commitment and do not need a prior appointment.