Insurance for an Indoor Playground?
December 28, 2010 11:36 AM   Subscribe

What are the commercial liability insurance needs for indoor, for-profit playgrounds? Can anyone paint a picture of general policy needs, costs, etc?

Because of the weather, there seems to be a niche in my city for these types of facilities to turn a steady profit. Yet they are few and far between. I presume that a major ongoing cost is commercial liability insurance in case of injury. But how much does that really cost?
posted by Cool Papa Bell to Work & Money (10 answers total) 3 users marked this as a favorite
Response by poster: Oh, and by the way, no need to mention that parents would sign liability waivers. For one thing, it's rare that a business can disclaim liability. For another, any good lawyer can shred a liability waiver in court -- they're so not bulletproof documents.
posted by Cool Papa Bell at 11:48 AM on December 28, 2010

No direct experience with that, but having procured insurance for bicycling events, which have a high risk of injury, and having found it surprisingly cheap, my hunch is that this isn't the deal-breaker. I'd hazard a guess that the high cost of labor, real estate (the minimum kind of space you'd need would probably be something like an old grocery store) and the need for a fair amount of equipment (playground equipment is surprisingly expensive) is what either scares people off or makes them decide to do something more likely to be profitable. Like opening a strip club. >rimshot<>
Somewhat similar concepts, or at least concepts appealing to a similar age group, like roller rinks, video arcade places, bowling alleys, or some kind of combination deal, which often go by names like "fun zone" or the like and sometimes include some playground equipment for the younger part of the crowd, seem to struggle in my area, but I live in a warmer part of the world where it's only 2-3 months out of the year that kids can't get outside.

You're also, unfortunately, battling a meta-trend, which is that too many kids are staying home and strafing each other over the internet on video games.
posted by randomkeystrike at 11:49 AM on December 28, 2010

And you are correct - waivers are worthless.
posted by randomkeystrike at 11:49 AM on December 28, 2010

And finally, an agent could actually answer your question, but it would pay to shop around and do some googling on the matter. There are often specialized insurance firms that give MUCH better rates on a given risk pool after studying the market and specializing in it. There are only 2-3 companies, for example, that will give you a reasonable rate on insuring a bicycle tour.
posted by randomkeystrike at 11:51 AM on December 28, 2010

Waivers are worthless, seconded. In my state, it's questionable whether a guardian could even waive liability on behalf of a child. I don't know that anyone could give you a reliable cost for liability insurance, as that's going to vary between locales. However, this would be a perfect question for a good commercial insurance agent. You might be surprised at how cheap the insurance is - remember, this isn't that dissimilar to a gym or swimming pool, batting cage, or go-cart track (all potentially dangerous to children), and those presumably get insured.
posted by seventyfour at 11:54 AM on December 28, 2010

If your deeper underlying question is "Why don't we have more of these kinds of things, they seem like such a great idea!" I can give one anecdotal bit of second-hand information. A few years ago, a friend of mine was looking to open a business, and one she considered was an indoor play area with coffee and decent seats. As mothers of young children, we thought that we would love to have such a thing available. In doing her research, she talked to some people who own such businesses and some who had formerly owned such businesses. One thing she heard from these people was that keeping the equipment clean was a horrible job, and that it seemed like many parents didn't bring their kids for fear of the tubes being disgusting or germy. So in their experience, this kind of place was a harder sell for parents than you'd think. I offer you this, FWIW.
posted by not that girl at 5:02 PM on December 28, 2010

Your basic liability insurance is actually not that bad (likely less than $10K/year), but a policy to cover protection from lawsuits for "bad touching" can be quite pricey. I can get you the name of a good agent, if you wish.
posted by jindc at 5:34 PM on December 28, 2010

Please update with what you find (or memail me), I'm interested in the insurance required + cost.
posted by seventyfour at 9:32 AM on December 29, 2010

I live in Portland, Oregon, have a young kid, and there are a number of these playgrounds in my area.

Many of the McDonald's have extensive indoor play areas with climbing/crawling things, basketball hoops (just for shooting), interactive video games, etc..

Out of this World is in a converted warehouse with a large play structure like you would find at McDonald's but about 2x higher. They also have a couple of bouncy houses. The floor is concrete which can be dangerous. My kid got a bloody nose one time from trying to go up the slide when another kid was coming down. I put some cold water on it and told him not to do it again.

There are several indoor rock climbing gyms that have programs for kids. Here's one.

Finally, this seems to be a franchised place that just opened recently. My kid loved it.

It helps to have something for the adults to do while the kids are playing. Free wi-fi (that works!) is good. Sky High Sports has TVs that are tuned to the football games on Sunday. Some kind of food and/or drink is good too -- kids get thirsty/hungry and it's an opportunity for more revenue.

Given the prevalence of "play areas" in fast food joints, I would expect that insurance companies are pretty used to handling these types of businesses. If you went with a franchise such as Sky High Sports, they would probably help you with the insurance...for a price.
posted by elmay at 10:00 AM on December 29, 2010

Here in Melbourne, Australia, all the play centres I know are in commercial buildings that would otherwise be hard to rent - they're badly located for commerce or in the middle of a residential area. This tells me that they're not especially profitable. But it can't be because of the insurance costs because they're very careless about supervision and maintenance.
posted by Joe in Australia at 1:59 PM on December 29, 2010

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