Top 5 Insurance Mistakes Wave Pool Owners Make and How to Avoid Them

Running a wave pool is a thrilling business, but it also comes with unique risks that must be properly managed. Unfortunately, many wave pool owners overlook key aspects of insurance, leaving them exposed to financial and legal liabilities.

In this post, we’ll explore the top five insurance mistakes wave pool owners make and, more importantly, how to avoid them.

Mistake #1: Underestimating Liability Coverage Needs

The Issue: Wave pools are high-risk environments due to the potential for accidents, injuries, or even drownings. Unfortunately, many wave pool owners opt for liability coverage that doesn’t fully account for the risks associated with this type of facility. This leaves them vulnerable to lawsuits that could potentially bankrupt their business.

How to Avoid It: Invest in comprehensive general liability insurance tailored to wave pools, which includes coverage for bodily injury, legal defense, and settlement costs. Work with an insurance provider who understands the specific risks and nuances of aquatic facilities to ensure your coverage limits are adequate.

Mistake #2: Not Including Property Damage Coverage

The Issue: Many wave pool owners focus solely on liability coverage and overlook the importance of property damage insurance. Wave pools are expensive to build and maintain, and incidents such as equipment breakdown, vandalism, or natural disasters can lead to costly repairs.

How to Avoid It: Ensure your insurance policy includes property damage coverage that protects the physical structure, machinery, and equipment of the wave pool. This will help cover the costs of repairs or replacements, ensuring your business can recover quickly after a loss.

Mistake #3: Ignoring Workers’ Compensation Insurance

The Issue: Wave pools often employ lifeguards, maintenance staff, and other employees who are exposed to dangerous conditions on the job. Failing to secure adequate workers’ compensation insurance puts your business at risk if an employee is injured while working.

How to Avoid It: Make workers’ compensation insurance a priority. This coverage will help protect your employees by covering medical expenses and lost wages in the event of an injury, while also safeguarding your business from potential lawsuits.

Mistake #4: Forgetting to Review and Update Policies Regularly

The Issue: The insurance needs of a wave pool can change over time due to expansions, renovations, or shifts in the types of services offered. Many wave pool owners fail to review and update their insurance policies, leaving gaps in their coverage.

How to Avoid It: Conduct annual insurance reviews with your provider to ensure your policy is up to date. This will help identify any coverage gaps and ensure that your business remains fully protected as it grows or evolves.

Mistake #5: Neglecting Event-Specific Insurance for Special Occasions

The Issue: Many wave pool owners host events, competitions, or private parties at their facilities without realizing that their regular insurance policies may not cover these types of activities. This oversight can lead to financial liability if something goes wrong during a special event.

How to Avoid It: If you plan to host special events at your wave pool, make sure you secure event-specific insurance coverage. This coverage can protect you against liabilities associated with hosting, such as guest injuries or property damage, giving you peace of mind during larger gatherings.

Risk Management Strategies for Wave Pool Owners

Wave pools offer thrilling experiences, but they also carry inherent risks that need to be carefully managed. Here, we explore three key risk management strategies to help wave pool owners safeguard their businesses: incident reporting and documentation, waivers and disclaimers, and disaster preparedness plans.

1. Incident Reporting and Documentation

Why It’s Important: Thorough documentation of incidents, accidents, and near-misses is essential in improving safety protocols and minimizing future risks. Detailed reports provide a clear record of what occurred, helping businesses refine their safety measures. Additionally, these reports can play a crucial role in insurance claims and legal defenses, should a lawsuit arise.

Best Practices:

• Accurate Reporting: Immediately document every incident, no matter how minor it seems. Include specifics like the date, time, location, individuals involved, and a detailed description of what happened.
• Photographs and Witness Statements: If possible, collect photos of the scene and statements from witnesses. These serve as critical evidence in validating claims.
• Analyze Trends: Regularly review your incident reports to identify patterns. If certain areas of your facility have more frequent accidents, it may signal the need for changes in layout, staffing, or safety procedures.
• Staff Training: Ensure your staff is trained on how to document incidents accurately and promptly. Proper reporting not only helps in legal scenarios but also aids in improving safety over time.

2. Waivers and Disclaimers

Why It’s Important: Waivers and disclaimers are a critical line of defense for wave pool owners. When properly crafted, these documents can help limit liability exposure in the event of accidents or injuries. They demonstrate that guests were made aware of the inherent risks involved in using the facility and voluntarily chose to participate.

Best Practices:

• Clear, Specific Language: Your waivers and disclaimers must clearly outline the risks associated with using the wave pool. Avoid ambiguous language; instead, use straightforward terms to ensure that guests fully understand what they are agreeing to.
• Legal Review: Have a lawyer with expertise in liability law draft or review your waivers to ensure that they comply with state and local laws. A poorly written waiver may not hold up in court.
• Age-Appropriate Signatures: Ensure that minors have a parent or guardian sign the waiver on their behalf. Minors cannot legally release a business from liability, so a parent or legal guardian’s consent is necessary.
• Visible Signage: In addition to waivers, post disclaimers and warning signs prominently around your facility, especially in high-risk areas. These signs should alert guests to potential dangers and reinforce the importance of safety.

3. Disaster Preparedness Plans

Why It’s Important: Natural disasters such as floods, hurricanes, and severe storms can cause significant damage to wave pool facilities. Having a disaster preparedness plan in place helps minimize the impact of these events and ensures the safety of both guests and employees.

Best Practices:

• Risk Assessment: Conduct a thorough assessment of your facility to identify vulnerabilities. This includes evaluating your proximity to flood zones, the structural integrity of buildings, and the potential impact of power outages or equipment failure during a disaster.
• Emergency Procedures: Develop clear emergency procedures for both staff and guests. These should include evacuation plans, communication strategies, and safety protocols for different types of disasters.
• Backup Systems: Install backup power systems to ensure that your facility can continue to operate critical systems during a power outage. Additionally, have contingency plans for keeping your wave pool and filtration systems functional during extended disruptions.
• Protecting Equipment: Ensure that all critical equipment is protected from water damage and other elements during severe weather. This may involve installing flood barriers, using waterproof coverings, or relocating sensitive machinery to higher ground.
• Staff Training: Regularly train your staff on how to respond during a disaster. Make sure they know how to evacuate the facility safely, protect guests, and secure the property.

Final Notes

Running a wave pool business is an exciting venture, but it comes with unique challenges that require careful attention, particularly when it comes to insurance. By avoiding these common mistakes and ensuring you have the right coverage, you can protect your business from financial and legal risks, while allowing your guests to safely enjoy the waves.

At Apex, we specialize in providing tailored insurance solutions for the wave pool industry.?

Reach out to us to discuss the ways in which we can help create stability and predictability in this flourishing new industry. Wave pools have many moving parts, requiring complex and comprehensive insurance programs to match.

Our wave pool insurance policies provide everything you need to get your company protected, so you can focus on what you do best – providing fun and excitement for your guests. With our coverage, you’ll have peace of mind knowing that your business is protected against a wide range of risks, including accidents, injuries, property damage, and more.

Learn more about our wavepool insurance policies, here.