The insurance renewal conversation has become the most stressful part of the operating calendar in recent years at a family-run amusement park in rural Ontario. This type of park has a go-kart track, a few medium-sized rides, a mini golf course, and a concession stand that has been run by the same family for thirty years. Not the personnel. Not the climate. Not even the initial outlay for upkeep of outdated machinery. the bill for insurance.
The commercial liability insurance market has become extremely challenging for Canada’s theme park and amusement attraction sector in ways that were not the case five years ago. The cost of premiums has gone up significantly. There are fewer specialized underwriters prepared to take on risks associated with high-exposure amusement parks. Additionally, at a time when fewer providers are vying for business, the requirements that insurers attach to policies before issuing them—such as certification thresholds, coverage minimums, documentation of management experience, and compliance with increasingly specific provincial technical standards—have become more stringent.
As a result, there is simultaneous pressure on operators from both sides in the market. Coverage is more expensive. There is less coverage available. Additionally, the requirements that must be fulfilled before coverage is even granted have added overhead of their own, like as training costs, certification procedures, and advisory fees, which exacerbate rather than eliminate premium rises.
This is a doable issue for big, corporately supported parks with strong finance and legal departments. Even if insurance costs are significant, they don’t pose a threat to the core business model for a company the size of Six Flags, which now owns Canada’s Wonderland. It also has the capacity to negotiate and the legal capabilities to handle certification procedures. At the other end of the market, things are far more unstable.
A particular form of this issue affects seasonal parks that are open for twelve to twenty weeks a year. They have to use a constricted revenue window to pay for their yearly insurance premiums. A seasonal park’s revenue between May and Labor Day can be significantly impacted by a premium increase that could only make up a small portion of a year-round facility’s earnings. Raising ticket prices, making more cuts, or closing fast become the only options when that calculation pushes the overhead past what the season’s revenue can sustain.
In Ontario, amusement ride safety is regulated by the Technical regulations and Safety Authority (TSSA), and insurers are increasingly requiring compliance with its regulations. This isn’t fundamentally irrational. There should be a connection between insurability and safety compliance. However, smaller parks absorb expenses differently than bigger ones due to the complexity of meeting and verifying compliance, especially for operators who might not have specialized safety management staff. A corporate park with a specialized risk management department has more infrastructure than an independent operator with thirty seasonal workers.
