Just about every forecast for economic growth this year has been positive – Barclays and Wells Fargo have optimistic expectations of 2.4% and 2.6% growth respectively, and wage growth clocked in at 2.5% during the first half of 2016.
As that outlook brightens, so do prospects for local municipal growth. Youth sports complexes have been one of the biggest recipients of public funds throughout the economic downturn and rebound, and though no central repository for data on these complexes exist, the Sports Facilities Advisory suggests 53 million youth players travel every year, resulting in $7 billion in annual spending.
Eager to attract some of those dollars, even the smallest and most remote of cities are either planning for a complex or seeking public money to expand, says Lita Mello, senior vice president over recreation with K&K Insurance.
“Youth sports complexes have become a vast, growing segment of industry as cities push for more building,” said Mello, who noted a recent general rise in submissions for K&K’s sports complexes program. “Many times, these facilities will adopt a more ‘family fun’ center feel, as they adapt to activities that get even younger children involved in order to seek tourism dollars.”
With these changing risk exposures, major liabilities and insurance placement challenges surface. However, Mello believes it also represents a major opportunity for savvy agents.
New or recently expanded youth sports complexes will require additional insurance coverage in order to best serve its expanded user base. Activities catering to younger children, such as trampolines or bounce houses, often carry greater risk – and not just from a participant injury perspective.
“With these types of activities, you’re going to have a broader range of employee liability concerns because younger children need to be better monitored than the older kids,” Mello said. “Sex abuse and molestation coverages also become more necessary as you invite younger children into the complex.”
Other facilities seek a “club” vibe, hosting bars and restaurants as well as clinics. These expansions require liquor liability coverage and potentially higher property limits, as state-of-the-art technology is brought into the facility.
Due to the complex and changing needs associated with sports complexes, uniquely crafted package policies are the industry standard for covering such risks.
At K&K, for example, program highlights include general liability (including participant legal liability and liquor liability), property, boiler and machinery, inland marine, commercial auto and crime – the last of which Mello notes is often overlooked by facility owners.
While most agents who write with K&K’s sports complexes program have just one or two accounts – rather than choosing to specialize in the area – Mello says they need to be actively engaged with facility management to ensure all new developments are properly insured.
“Agents need to do their due diligence because many of the accounts we insure offer everything from soup to nuts,” she said. “You’ll see a bowling alley next to a movie theater next to a climbing wall, and the last thing you want is to come in on a claim that involves an offering you weren’t even aware of.”