How to navigate the universe of insurance for portable rides and protect yourself against any risks
by Enrico Fabbri
Fortunately, accidents on rides and attractions are very rare. When do they happen, however, they can seriously affect both your pocket and your peace of mind. It is quite common to accept insurance policies proposed by your usual insurance broker without properly assessing the conditions, meaning the choice is made solely on price. Attractions are machines that can break and cause death. In these cases, the passenger is always the victim and will receive compensation in civil or criminal proceedings. If you do not have a good insurance policy, you can find yourself in serious trouble.
The policies that are compulsory for our cars, for example, have minimum standards set by law and verified by consumer associations. On the other hand, the policies you sign to cover risks to people and things when using your attractions do not have such minimum standards; it all depends on the clauses, which are sometimes very difficult to understand, even for professionals.
What then are the most suitable criteria for assessing and taking out an insurance policy?
The first risk to be assessed and insured is damage to the attraction itself, such as fire and transport. Prior to signing the contract, it is recommended to have the attraction evaluated by a professional to establish its true market value. This will help you reduce pay-out times, as you will not need to negotiate the sum, but rather only whether or not the damage is covered.
The second risk to be assessed and insured is harm to people. In these cases, you need to evaluate the risk of your attraction. Children rides are generally considered to have a lower risk than rides for teenagers or adults. Nothing could be more wrong!
If your attraction carries people, there is always at worst the risk of death to one or more riders, regardless of their size and the type of users. What changes is the likelihood that such an event will occur, and this is what affects the cost of the insurance policy. So, no matter if you have an attraction for children or adults, your attraction always needs to be insured to an appropriate maximum limit, or cap.
Let’s now examine at the main points of an insurance contract. The coverage must be extremely clear, including “any civil liability you may incur by law as a ride operator.” This may seem obvious, but it is not. Many policies have very unclear coverage terms that may render the insurance policy basically useless. The second point is the coverage cap, that is, the maximum amount that the insurance company is required to pay in the event of a claim. There is a tendency to accept very low caps, such as 500,000 euros, in exchange for a discount on the policy. This is one of the most common mistakes that you must avoid.
The insurance policies on our cars have a minimum cap of 5 million euros, so it is entirely logical to believe that an insurance policy for a ride should cover up to at least 3 million euros. Another important point to consider involves the exceptions, in other words, the cases in which the insurance policy does not apply. I once read that a policy did not cover damage due to operator errors; this clause is obviously inadequate, as well as being profoundly improper. There are also other very important aspects that do not involve a substantial price difference. For example, covering legal fees, covering the costs of any experts, and the risks associated with installation of the ride.
So how should you proceed? My advice is to take out one of the insurance policies offered by your trade association. In these cases, the contractual terms will be verified by professionals and will apply to all members. If the need arises, pay-out will be faster as your bargaining power will depend on your association and all its other members, your colleagues. I therefore urge you to forget about trying to do it all yourself because, I assure you, insurance contracts are insidious and very complex matters.
Written by Mr. Enrico Fabbri firstname.lastname@example.org
Article originally published in Games Industry (Italy) magazine
Original date: July 2017
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