How Insurance Agents Help Keep the Scare In Halloween Events

Halloween is scary fun for kids—and for some insurance agents, too. These insurance professionals make sure their clients who manage haunted houses, corn mazes, pumpkin patches and other Halloween attractions are protected should any of their tricks or treats turn into liabilities.

When they put together an insurance program, agents and brokers have to go beyond the main event and learn about any extracurricular items such as hay rides, pyrotechnics or petting zoos that might be part of the entertainment.

“I actually had one person tell me they had a tiger in their petting zoo,” said David Baker, principal at Stratum Insurance Agency in Costa Mesa, Calif. “That is not a good idea.”

While that may not be a typical occurrence, underwriters say the days of someone just jumping out from behind a prop and scaring people are long gone, as haunted houses and other Halloween events have become much more sophisticated. The professionalism has evolved to where there are haunted house associations, such as the Haunted Attraction Society.

So agents must do some research before taking on a seasonal account like a haunted house, pumpkin patch or corn maze.

“From an agency standpoint, what you need to know is the basis of that haunted house, the event they are having, how is it going to be laid out, is it indoors or outdoors? Really get your hands around what they are going to have there and what kinds of risks there are going to be,” said Brett Hager, account executive at Market Financial Group. “Some get a little crazy and might have a flame thrower or a cannon that shoots pumpkins. Does the public have access to these? That’s something you need to know.”

Baker agrees and says agents should do some investigating of the venue before they sign up the account.

“People say it’s a pumpkin patch, but in reality they might have a carnival running, too,” he says. “Know what your customer truly has; don’t just take it at face value. A lot of people call us and say, ‘it’s just a pumpkin patch’ and I say, ‘well I am looking at your site and see you have a shooting range, too.’ There can be a lot of risk there.”

The main liabilities associated with basic Halloween events, according to insurers, are slips, falls, and bumping into things in the dark. Children are usually present so there is more liability if they aren’t being properly supervised. There are also additional risks when there are hayrides, petting zoos, or alcohol, to name a few.

The admitted markets have mostly stayed out of the Halloween area because they find the risk too scary. Most agencies have turned to excess and surplus carriers to place the accounts.

“I think standard carriers underestimate the professionalism that most of these guys operate under,” says Robin Walker, commercial department manager for InPro Insurance in Troy, Michigan. “Some of these are movie quality, theater quality sets and scenes, and the good ones that want to stay in business and want people to come back have to be safe. Standard carriers underestimate the safety aspect.”

The “Halloween segment” isn’t one many agents get involved in either because the premiums on some accounts can be as low as $325, and there is also the seasonality to take into consideration. Walker says her office begins contacting their repeat clients in July and August to renew their policies, and the season typically ends in November. However, some of her clients do turn their “haunts” into Christmas events.

She says demand has actually increased this year ; she thinks it’s because the bad economy has left many people looking for new ways to make money.

“What we see mostly are agricultural properties that have to do something to stay afloat and have turned their properties in to ‘agratainment’ areas to get people there,” says Walker. “And some of my clients have rented out the empty retail spaces to use it for a few months for their haunted house and then they are gone.”

Mike Rabe, vice president at Market Financial Group, says the economy has affected the larger haunted houses or pumpkin patches because they may charge a high admission price or charge extra for the different activities available at the event site.

The agency targets those in the haunted house associations, who typically operate their “haunts” all year. They also have partnered with a wholesale broker that has given them access to an admitted market. Rabe says they are in the process of updating their Web site so haunted house owners can quote and bind their policies online.

Typical coverages for the haunted houses, pumpkin patches and corn mazes include general liability, volunteer accident coverage and equipment. Market Financial Group began offering accidental death to haunted house owners and exhibitors last year.

Rabe says one coverage they can offer that is rarely purchased for these venues is weather insurance because of its expense.

“If it rains for three or four days you have mud and your season is done before it has even started,” he said. “But it’s an expensive product that you have to purchase in advance and it’s tough for these guys to generate the money before they have brought their first dollars through the door.”

All three agencies agree that it can be a nice break from the daily routine.

“It’s fun for us,” says Walker. “It’s not a big part of our book of business, but it’s fun and we have met a lot of really nice people.”