If My Haunted House Completely Traumatizes Some Poor Kid, Who’s Responsible?

Responsible business owners have to keep the safety of their guests in mind at all times. Even businesses that are designed to be all in good fun still pose a myriad of risks to visitors who set foot on the property, which is why it’s so important to be prepared. So what happens if your haunted house is a little too realistic and completely traumatizes some poor kid? Who’s responsible for this mess, anyway?

Luckily an independent insurance agent can not only answer this question for you, but also help you get set up with the proper coverage. Independent insurance agents know exactly what kind of protection you need, and they’ll get you covered long before you ever need to file a claim. Here’s how they’d help protect you against your haunted house traumatizing a guest.

Who’s Responsible If My Haunted House Traumatizes a Kid?

Even though you may not think your haunted house is spooky enough to require therapy after a visit, if parents claim their kid was traumatized by the experience, they could sue you. The trick is that the parents would have to be able to prove it was your haunted house that scarred their child, but if they were successfully able to do so, you could be in real trouble. Fortunately having adequate coverage could help prevent this nightmare from happening.

If It’s All on Me, Which Insurance Would Cover This Incident?

If it turned out your haunted house really did inflict trauma on a poor kid, you’d need the liability coverage provided by a business owners policy (BOP) to protect you. No matter how small or campy your haunted house may be, it’s critical to consider the potential threats it could pose to your visitors from the very beginning.

Liability insurance provided by a BOP covers all forms of bodily injury, including emotional or mental distress, like psychological trauma. When you’re the owner of a haunted attraction, it’s imperative to be protected before you ever open your doors to the public. Talk to your independent insurance agent about getting the coverage you need ASAP.

How Would Liability Insurance Protect Me in This Scenario?

Liability coverage exists to protect business owners if they get sued. Coverage takes care of costs for all legal fees, including attorney and court expenses, and settlements you have to pay if the case rules against you. Liability coverage also reimburses you for medical payments, so if the traumatized kid required therapy after visiting your haunted house, you’d be protected. Make sure you have all the liability coverage necessary before you ever get slapped with a legal charge.

Would I Need Umbrella Insurance in This Scenario?

It’s possible. If the lawsuit against your haunted house got especially costly, you could easily exhaust the liability coverage limit included in your BOP. Umbrella insurance stacks on top of your existing business insurance’s liability coverage section to increase the limits of your coverage. Umbrella policies most often come with limits of $1 million, but can also be purchased in $5 million or $10 million increments.

If you add a $5 million umbrella policy onto your BOP’s $1 million of built-in coverage, you’ve now increased your liability protection limit to $6 million. Umbrella policies are often worth looking into because they tend to be extremely affordable, given the high amount of coverage they provide. Your independent insurance agent can help you decide if your business would benefit from umbrella coverage.

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What If I Don’t Have Insurance?

Honestly, you could end up being even more upset than the kid who got traumatized by your haunted house. If you got sued and didn’t have adequate liability coverage, you’d have to pay for all legal expenses out of your own pocket, and just the attorney alone could potentially bankrupt you. Rather than taking an unnecessary huge risk, it’s best to just be prepared for all potential mishaps that could arise from the beginning, by getting the right insurance.

What Does a BOP Cover?

A BOP is a convenient package of coverages needed by all business owners. Your BOP can be customized with specific coverages required by your unique business, and your independent insurance agent can help you find all the options you need to complete your package. Standard BOPs provide three major areas of coverage:

• Business income: Covers financial losses suffered while a business is closed due to fire damage or other disasters.
• Commercial general liability: Covers your business against property damage or bodily injury claims made by a third party.
• Property damage: Covers loss of/damage to your physical property, including your office and inventory, from hazards like fires, storms, vandalism, etc. Coverage often extends to permanent changes you make to the interior of a building as well, such as installing light fixtures.

Working together with an independent insurance agent is the best way to get your business equipped with a BOP that suits your needs.

What Doesn’t a BOP Cover?

While BOPs provide a lot of critical protections, unfortunately they can’t cover absolutely everything. You’ll need to double-check your individual policy to see your specific coverage exclusions, but the two main perils never covered by any BOPs are flood damage and earthquake damage. Special flood insurance and earth movement policies would be required to protect your business from damage or liabilities caused by these disasters.

BOP insurance also typically excludes these coverages:

In order to protect your business from professional errors or negligence, and to protect any company vehicles or employees, your independent insurance agent can help you find the appropriate coverages to add to your BOP.

What Other Coverages Does My Business Need?

While the owner of a haunted house may not require any specific additional coverages, most business owners are likely to need to endorse their regular BOP or business insurance policies. Fortunately there are several common add-on coverages that address most needs of business owners across the map. 

Some of the most common add-on coverages for businesses include:

• Employee dishonesty coverage: Covers harm to the business caused by employees with questionable motives.
• Crime coverage: Covers losses due to criminal activity such as theft or fraud. Coverage even applies to employees who steal from the company.
• Professional liability:  AKA "errors and omissions insurance," this coverage protects against claims made by clients who have suffered financial loss due to the work they've hired you for.
• Boiler & machinery coverage: AKA "equipment insurance," this coverage applies to electric equipment in the building (e.g., AC units and boilers) that breaks down due to power surges, etc.
• Glass breakage coverage: Covers the glass windowpane of your business’s storefront, where applicable, for things like vandalism and car crashes.
• Hired and non-owned auto liability: If your employees drive to perform company operations but you don’t have company vehicles, you might need this coverage.
• Druggist liability insurance: Covers liability exposures for professionals like pharmacists who have the potential to make costly mistakes, like giving someone the wrong prescription.

If your business isn’t adequately protected by just a BOP or business insurance policy, your independent insurance agent will help you assemble a package of all the coverages you need to address every area of risk.

Here’s How an Independent Insurance Agent Can Help

When it comes to protecting your haunted house against traumatizing kids and all other strange incidents, no one’s better equipped to help than an independent insurance agent. These agents search through multiple carriers to find providers who offer business insurance, BOPs, and umbrella insurance, deliver quotes from a number of different sources, and help you walk through them all to find the best blend of coverage and cost.