Insurance Allies, LLC, division of Specialty Program Group LLC. Doing business in California as SPG Insurance Solutions License No. 0L09546.
© Copyright 2024 HauntedHouseInsurance.com
Numerous Risks of Hosting Haunted Attractions Running a haunted house or similar venue presents unique risks, and there are various ways you could face a lawsuit. It’s our mission to help you understand these risks and develop a tailored insurance program that protects your business in the most efficient and cost-effective way possible. Unfortunately, no single policy covers everything (we wish it were that simple!), but we’re here to help you select the coverages that matter most to you.
Let’s start with the basics:
Insurance is typically purchased for one of two reasons:
Landlords often have specific insurance requirements, which can vary depending on the venue. We always recommend seeking legal counsel to review contracts, but if you’re unsure of what your landlord requires or how it could impact your costs, feel free to contact us for a free lease review at: Service@insuranceallies.com.
General liability covers bodily injury or property damage to others. This is a fundamental coverage, especially if you’re operating at a leased venue. A standard general liability policy in the U.S. typically offers $1M per occurrence and $2M in general aggregate coverage.
Here’s how it works: if an accident happens (e.g., a group of guests slips on a wet floor), that’s considered one occurrence, even if multiple people are injured. The occurrence limit is the maximum your insurance will cover for that one incident. The aggregate limit is the total your policy will cover for all incidents during the policy period. This coverage typically applies to participants, staff, and visitors.
Umbrella insurance increases your liability limits. For example, if you have a $1M per occurrence limit under general liability, purchasing an umbrella policy for an additional $1M raises your limit to $2M per occurrence and $3M aggregate. It’s important to note that umbrella insurance does not cover everything—it simply extends your liability coverage.
Accident insurance is highly recommended. General liability policies only activate when someone sues you. Accident insurance provides no-fault medical expense coverage, allowing you to compensate injured guests without waiting for a lawsuit. This can help prevent small incidents from escalating into major legal claims.
General liability insurance does not cover allegations of inappropriate conduct. For haunted houses, where there may be close interaction between staff and guests, sexual abuse/molestation coverage is highly recommended. This is often sub-limited, meaning it may come with a smaller coverage amount than general liability, but higher limits can be requested. Stand-alone policies are also available for additional protection.
Assault and battery are often excluded from general liability policies. This coverage addresses emotional or physical injuries that result from altercations between guests at your haunted attraction. Given the sometimes intense nature of these events, this coverage is worth considering.
If you serve alcohol at your haunted attraction, liquor liability insurance is essential. This protects against claims related to the service of alcohol, such as overserving a guest who later causes an accident. Liquor liability can often be packaged with general liability, but it can also be purchased separately.
Even if your haunted house doesn’t own vehicles, you could still face auto-related lawsuits. If an employee or contractor runs an errand for you and gets into an accident, hired and non-owned auto liability covers your business in case of a lawsuit.
Property Limits are chosen by the insured and is relative to whatever you pick and choose.
There are several different property coverages explained below. The cost of property is so
relative to whatever you pick and choose and a lot has to do with the limits you choose, the
location you are in (i.e. property is more expensive in Florida), and the specifications of your
property (i.e. wood burns faster than steel and as such, if you have a wood structure, it is more
susceptible to fire damage than a steel building)
Building: Typically, one would only insure the structure of building if you actually own the
building. This can also refer to the courts themselves.
Betterments/Improvements: This coverage typically applies to renters of a building. If a tenant
does not own the building, they would not insure the structure of a building, but they may have
put thousands of dollars of construction into the unit. Typically, anything affixed to the walls
and floors would be considered build-out. If you own the building, this would typically be
included in the building value.
Contents: Contents refers to all of your stuff. Imagine you flip a building upside down, anything
that would fall out (i.e. balls, rackets, equipment, tables, couches, etc., pens and pencils).
Outdoor Sign: Outdoor signs typically need to be scheduled on a property policy
Equipment Breakdown: This is a coverage that is really meant for stand-alone facilities that can
help pay for the damage, repairs or lost revenue arising from the breakdown of equipment such
as boilers and machinery, air-conditioning units, motors. This can also even cover the spoilage
of food and loss of income from it.
Inland Marine: Property Insurance is typically very location specific (think at a specific address).
Inland Marine is a scheduled value of property that can follow you wherever you go.
Business Income and Extra Expenses (Business Interruption Coverage): This will provide
coverage for lost revenue and expenses you incur in the event of a direct physical loss to your
premises that prevents you from operating. Unfortunately, this does not apply to COVID as it
does require a DIRECT physical loss to your premises such as a fire or tornado.
There are two major exclusions on almost every property insurance policy. If you are
concerned with either of the below and would like to obtain coverage, please let our team
know and we will help you obtain a separate quote/policy.
1. Flood
2. Earthquake
Also, another quick reminder is that if you are in pretty much the entire state of Florida or along
certain coast lines, Wind or Hail (i.e. Hurricanes and Tropical Storms) are not always
automatically covered by your property insurance policy. You either need to get it specifically
endorsed/added on or we can help you obtain a property policy that does specifically also cover
it. Note that it does typically come with an increased cost though.
Unfortunately, I am not sure it is possible to get coverage for Virus shutdowns as it would
bankrupt every insurance company in the country.
Directors and Officers Liability helps to protect the directors and officers, and their spouses, in
the event they are personally sued for mismanagement or actual or alleged contractual
disagreements. Maybe you are putting on a huge tournament, things go south, and a third
party is out money due to your actual or alleged mismanagement. In many states, you can
actually be sued PERSONALLY for this, and your corporate veil may not protect you.
Employment practices liability covers a business or person for allegations of age, sexual, gender
or racial discrimination. We operate AxeThrowingInsurance.com and we have a client who held
a “ladies” night in which two men were turned down due to their gender. This can also cover
you for employment related claims such as failure to promote, wage and hours disputes,
breach of contract, or wrongful termination.
Most insurance is optional, whereas workers compensation is not. This is a type of insurance
required by law in almost every state the minute you hire one employee. It is meant to protect
your employees if they are hurt on the job.
Supervision of Haunted Attractions:
All haunted house activities should be supervised at all times by the insured or their designated staff. Proper oversight ensures a safer environment for guests and minimizes the risk of accidents or claims.
Alcohol Sales and Insurance Rates:
For the best insurance pricing, alcohol sales should make up 25% or less of your total revenue. However, if alcohol sales exceed this percentage, we can still obtain coverage, though higher alcohol sales typically lead to increased insurance rates.
Alcohol Consumption Rules:
There should be strict rules in place prohibiting participants from purchasing or consuming alcohol before or during haunted house activities. This helps mitigate risks associated with impaired judgment or injuries and can positively impact your insurance rates.
No BYOB or Self-Serve Alcohol:
To comply with insurance guidelines, haunted attractions must not permit guests to bring their own alcohol or engage in self-service. These measures ensure better control of alcohol consumption on the premises.
Liquor License Requirement:
The insured must hold a valid liquor license to serve alcohol at the haunted house. This is necessary for obtaining liquor liability insurance, which protects against claims involving alcohol-related incidents.
TIPS-Trained Bartenders/Servers:
It is required that the insured employs bartenders and servers who are TIPS (Training for Intervention Procedures) certified. This certification ensures that staff is properly trained to serve alcohol responsibly, which is a key factor in reducing potential liabilities.
Sexual Abuse/Molestation Coverage Requirements:
For coverage against sexual abuse or molestation claims, the insured must have a comprehensive abuse prevention system in place. This should align with the standards outlined by the Safe Sports Act, and background checks should be conducted on all employees, contractors, and volunteers.
Comprehensive Abuse Prevention Systems for Larger Limits:
For larger abuse liability limits, insurance companies typically require a thorough system for abuse prevention training and tracking. Trusted organizations such as the U.S. Center for SafeSport, Darkness to Light (a National Center for Safety Initiatives partner), or Abuse Prevention Systems provide platforms for proper training. These systems ensure that staff, volunteers, and coaches are trained to meet Safe Sport Act requirements, and some insurance companies may provide these platforms at no additional cost.
By adhering to these guidelines, your haunted house can maintain a safe environment while ensuring compliance with insurance requirements, helping you secure the necessary coverage at the best rates. Contact us today to learn more or get a personalized quote for your haunted attraction.
Insurance Allies, LLC, division of Specialty Program Group LLC. Doing business in California as SPG Insurance Solutions License No. 0L09546.
© Copyright 2024 HauntedHouseInsurance.com