| When it comes to amusement ride thrills, Steve Zastrow can’t take much more than the little jostling offered by an inflatable bounce ride, or maybe the brief dousing of a dunk tank.
It’s not that Zastrow is faint-hearted or a kill-joy; it’s his job to be cautious. An underwriter for ARA Insurance Services (AIS), Zastrow has watched the popularity of inflatables soar, but he’s also seen his company take some unforeseen right hooks to the pocketbook as more and more inflatables move into the rental inventories of AIS’s clientele. Consequently, the firm has to take a fresh look at inflatables in the rental arena, and a tougher stance about which ones it’s willing to cover.
Trying to get one’s arms around the inflatable amusement ride industry is actually like trying to hug a Moonwalk. Profitability is abundant, but the risks and responsibilities of renting inflatables can be large, too. Many well-made products are available but, sources say, so are many poor ones. Regulations and safety standards are inconsistent or even nonexistent in some states, and accident data is sparse and incomplete.
And perhaps most dizzying of all, the variables of young users, supervisors-operators, environments and manufacturing materials are all infinitely broad, indefinable and sometimes uncontrollable.
Nevertheless, the U.S. market continues to balloon rapidly, though no one seems to really know just how many inflatables are out there. Foreign manufacturers commingled with domestic makers of inflatables, not to mention the nebulous Internet sources, all make for a diverse marketplace, indeed. But as volumes and varieties multiply, some agencies and insurance underwriters note that accidents and liability claims are on the rise as well. Those who rent inflatable products to the public may soon see changes in the availability and/or rates of liability insurance for those products.
At first, as rental dealers began entering the inflatables business, AIS took a go-with-the-flow approach, welcoming – or at least not objecting to – just about any air-filled amusement product its clients were offering their customers. But they didn’t see the blow that was coming.
An average of 10 claims per year since 2000, including a whopping $387,000 zap to its reserves in the spring of 2001, got the company’s attention quickly. The onslaught of rental centers dealing heavily in inflatable amusement products knocking on AIS’s door for some bargain rates got their attention, too.
Because AIS determined that the vast majority of its clients rent nothing more exhilarating or exotic than basic bounce rides (otherwise known as Moonwalks) and dunk tanks, the insurance provider reasoned that the slim 10 percent of centers seeking coverage for their significantly wider range of inflatables didn’t justify the risk shouldered by the entire pool of insured ARA rental companies. In other words, contrary to the immortal words of Captain James T. Kirk of Enterprise fame, the needs of the few did not outweigh the needs of the many.
To help reign in the problem of widespread, undeclared inflatable rentals of all types, for which AIS was expected to universally offer liability protection, the company filed a blanket exclusion last year to purge four categories of rental products out of its insurance program. Those no longer covered included life support and medical equipment, recreational vehicles such as boats and ATVs, truck rentals and amusement rides, including specific types of inflatables.
AIS also chiseled out three categories of rented inflatables and amusement products in order to define which types it would no longer cover. Class I products are included in AIS’s insurance program – the equipment is neither set up or supervised by a rental center and includes bounce rides, dunk tanks, carnival games for a single player, casino games, and vending and concession machines. Class II products are only considered on exception basis, and while they may be set up by the rental center, they are not supervised by it. This category includes inflatables in which the participant is elevated more than three feet off the ground and interactive games for either single or multiple individuals.
Class III amusement products are strictly uninsurable in AIS’s program. Each is deemed by AIS to require set-up and supervision by an equipment provider, a concept that contradicts the fundamental premise of rentals to empower the consumer for do-it-yourself use. These include inflatable slides, rock climbing walls, bungee jumps, trampolines and batting cages.
Defense against suits involving inflatables and their small users is a troublesome thing, according to Zastrow. Ordinary defenses often don’t stand up when children are injured – in fact, he says, the company merely becomes a link in the chain of deep pockets in such circumstances. The fact that safety instruction has been duly imparted and documented, for instance, is a moot point since those instructions have not been given to the real end users of the products, the children playing in them. And the defense of user negligence is equally pointless when youngsters are involved.
The issues of installation and supervision are a double whammy of damnation for the rental center – if they don’t provide these services, the fate of kids may lie in unskilled, untrustworthy or inattentive hands; if, however, they do set up and supervise an inflatable activity, they are all the more liable if an injury does occur. Besides, if a rental center provides the services for operating the ride, they’ve crossed the boundary from rentals into the realm of contractor – a territory that Zastrow says just doesn’t fit into the insurance coverage program AIS provides.
The presence of manufacturer liability insurance is a thin ice pond of hope when plaintiffs come a-calling. The good, reputable makers of inflatables invariably demonstrate their reputability with proof of such coverage. But some in the market manage to tap dance their way across the slippery rink of risk without insurance. Others are here today and gone tomorrow, their widely used products the only reminders of fly-by-nights no longer in business, no longer accountable when injuries evolve into law suits.
But accidents involving products made by foreign manufacturers are the worst case scenario, according to Zastrow. Getting a case through an international court can take five to 10 years, said one source, so most plaintiffs won’t bother trying. And for a company like AIS that is standing with a defendant rental center, tracking down an overseas manufacturer is a daunting and mostly fruitless task. And that leaves AIS holding the bag.
Despite its firm position on inflatables, AIS isn’t finished with these products or the companies that wish to rent them. First, says Zastrow, while his company may turn down coverage-seekers for high-thrill inflatable rides, it won’t give them the cold shoulder. AIS has researched insurance markets that are more appropriate for inflatable amusement products and tries to help direct rental stores to these providers when the fit isn’t right for AIS.
Second, AIS has embarked on a plan by which to more fully comprehend the inflatables industry and help solve some of its deficiencies. During the fall of ’02 the company began organizing a new committee to define and assess key issues surrounding inflatables. Comprised of manufacturers, rental dealers and insurance experts, the committee is focused chiefly on defining the inflatable industry and its size and growth rates, identifying manufacturing and safety standards, evaluating product quality and use, helping to develop a risk and control matrix, and addressing insurance issues. ACCIDENTS HAPPEN
The data for injuries associated with inflatable rides is sketchy. Insurance companies have only their own slice of statistics on which to rely, as well as reports issued by the federal government’s Consumer Product Safety Commission (CPSC). The insurance industry is discouraged from sharing accident data, one company to another, to avoid accusations of collusion. Because inflatables are regulated by the states – some choosing to regulate and inspect inflatables, and others choosing to exempt inflatables from the rules – the collection of sound injury data on a national basis is nearly impossible.
The CPSC, nonetheless, gives a valiant effort. Its 2001 stats put inflatable ride injuries at 1,993. In one report, the agency tracked injuries from 1993 to 2001, and called particular attention to the upward trend for inflatable ride injuries during the period from 1997 to 2001. The increase, in fact, is called “marginally significant.” What isn’t tracked is the exponential growth of the industry itself, therefore tempering the accident data with the echoing thought: How much did the inflatables industry grow during a given year in question, and if it grew substantially, then perhaps the number of accidents was comparatively meager.
But only a guess can quantify the industry’s sprawl. One manufacturer estimates that the inflatables market grows by 25 percent a year.
It’s a guess, too, as to which particular types of inflatables are involved in the majority of accidents. A review of some reports suggests that inflatable slides are frequently cited in injuries. But accidents and injuries are not necessarily due to product flaws. Because inflatables are virtual sails with enormous surface areas and susceptible to the whims of winds, proper anchoring as well as ground conditions play huge roles in the safeguarding of children on these rides.
Operators or supervisors of inflatable rides are another part of the rental equation that can make or break conditions for injuries. Frank Scurlock, president of Space Walk Interactive, LLC, Kenner, La., believes that the best possible supervisor for an inflatable ride is a parent of the children using it. (This opinion was also firmly asserted by every other source interviewed for this report who addressed the supervision topic, including two state regulatory officials and an inflatables rental dealer.)
“Every inflatable, no matter who makes it or what its uses are, has to have some type of supervisory personnel, not because it’s an inflatable but because you’re dealing with children who are the ultimate end users,” Scurlock said. “I compare inflatables to swimming pools. If you’re a homeowner and you have a swimming pool, somebody has to take responsibility to provide supervision for those children who are in the pool. You would never let children play alone in a swimming pool. But does that mean you have to have a lifeguard certified by the Red Cross come to supervise those kids? Of course not. Nor do you have to have a paid attendant supervise every inflatable ride.”
Parents not only care more about the children in a ride than any paid rental center employee could, but presumably, sources agree, they know more about the temperaments of the children participating in the ride. And while numerous eye-witness incidents of parental partying were cited by sources – incidents in which the use of alcohol in private party settings could potentially leave children poorly supervised – the consensus seems to be that the best kind of inflatables supervisor is a parent who has rented the amusement product for his or her children’s group.
The need for alert, uninterrupted supervision for inflatable activities for children is seen nowhere more poignantly than in a claim AIS is still involved in nearly two years after the incident occurred. A school-sponsored fair had rented an interactive inflatables game in which two participants wear combative suits and wield inflated weapons at each other, each trying to knock his opponent off a pedestal. The game went dismally wrong, however, during an interval when an adult was no longer supervising the activity. One child attacked the other with the handle end of the inflatable bat, then jumped on top of the child “jamming him like a battering ram,” according to Zastrow. The victim suffered broken vertebrae, and his parents are suing for $1.3 million.
“They have brought the other child’s parents in, but their homeowners’ policy may not be adequate,” said Zastrow. “They’ve come after us, the manufacturer, the school district. All we can do is try to pay as low a share as we can.” Next week, Rental Pulse probes sources of future regulation for inflatables and how rental dealers, meanwhile, can discern what’s safe to buy in the absence of universal standards. |