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Water Slide, Hot Tubs Struggle to Find Insurance

February 27, 1986|JILL STEWART | Times Staff Writer

The Raging Waters amusement park in San Dimas and the just-completed Puddingstone hot tub facility nearby face an uphill battle finding liability insurance before they will be allowed to open for business this spring, county officials said.

Raging Waters, whose liability insurance expires in May, has not secured the $1 million in insurance needed to continue operating.

Officials of Bryant Morris Development, which operates the water slide at Frank G. Bonelli Regional Park, said they are awaiting word from 30 insurance companies they have approached and are optimistic that coverage can be arranged.

At the same time, Puddingstone Hottubs, a new hourly rental hot-tub facility overlooking Puddingstone Reservoir at the regional park, has secured only $1 million of the $3 million in liability insurance required by its county contract.

Potential Victims

The privately leased facilities, both on county property, and several other concessions at parks around the county are potential victims of a trend in which insurance companies are refusing to provide liability coverage, county officials say.

"Theme parks, amusement parks and recreational facilities with anything beyond a baseball diamond are being deserted by insurance companies across the country," said Hank Bachrach, chief of the county's risk management division.

"We're seeing it across the board," said Bill Harvey, contracts director for the county Department of Parks and Recreation. "In the next six months we have 20 insurance contracts (held by concessionaires) that are going to expire and need to be renewed. We're going to do our best to help them out of this problem on a case-by-case basis."

Kent Lemasters, vice president and general manager of Bryant Morris Development, said his company has begun an aggressive campaign to persuade insurance companies that Raging Waters is a good risk. The firm sent out 30 pamphlets explaining Raging Waters' facilities and training and safety programs and is expecting "some hot prospects," he said.

'Alternate Plans'

However, Lemasters said, "If it doesn't work, we are working with Parks and Recreation on alternate plans so we can open in May."

Bachrach said the county is exploring several solutions for Raging Waters and other concessionaires facing trouble. They include reducing the insurance required by the county, asking the concessionaire to start a cash fund for future settlements, or allowing concessionaires to insure for "calamities," without having to insure for smaller incidents.

Although several county officials have blamed the current insurance crunch on the "deep-pockets" liability provision in state law, Bachrach said the insurance crisis was brought on by several other factors as well.

Among them, he said, are a downward trend in interest rates, an increasing push by attorneys to win larger settlements and the pull-out by several European insurance companies who no longer operate in the North American market.

Under the deep-pockets provision, injured persons are granted financial settlements paid by the wealthiest defendants, even if the wealthiest defendants were only minimally at fault. In such cases the wealthiest defendant can be required to pay a disproportionate share of his liability. Such payments are sought when the defendant most at fault has no assets. For example, county officials said, a passenger injured by a drunk driver who happened to run into a county road sign could get the lion's share of his settlement from county coffers--as long as the jury determined that the county sign had in some way contributed to the accident, and the drunk driver had no assets.

John McCann, regional vice president of the Insurance Information Institute, said liability insurance for recreational facilities and parks has also dried up because municipalities have lost many immunities from lawsuits that they once had, and in recent years California courts have granted unusually large awards against government entitities.

Prospects Called Slim

At Raging Waters, where patrons zip down steep water slides and venture into eight-foot-deep water on rafts, prospects for getting liability insurance have grown slim because of the insurance crisis, county officials said.

The county and the park's operators have been sued in Pomona Superior Court in the drowning last July of an 8-year-old girl who had been floating on a raft in Wave Cove, a pool in which man-made waves rise and fall. The girl's father lost sight of her and alerted lifeguards, who found her unconscious in about eight feet of water.

However, Bachrach said the companies that have begun denying amusement parks liability insurance are not investigating any current claims against the parks.

"Individual loss histories are not being evaluated," he said. "The insurance companies are just saying no."

Harvey said Raging Waters is a money-maker for the county, generating between $250,000 and $350,000 in rental income each year. Last year alone, it attracted 450,000 visitors.

Plan to Meet

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