INSURANCE PREMIUMS

Insurance Premium Spikes: The Unexpected Cost Surge Hitting FECs in 2025

While FEC operators are busy managing labor, pricing, credit-card fees, and game uptime, another major cost has quietly surged: commercial insurance premiums. Across the U.S., operators are seeing 18%–35% increases on renewal and in some cases even higher.

This is one of the most painful cost jumps because it’s mandatory, non-negotiable, and heavily impacted by broader trends outside an operator’s control.

Why Premiums Are Rising So Fast

1. Increased injury claims across entertainment venues

Trampoline parks, inflatables, VR attractions, climbing walls, and even high-traffic arcades are seeing more reported injuries, even minor incidents that still trigger claims.

2. Higher litigation and settlement costs

Legal expenses and payouts have risen sharply over the last 3–5 years. Insurance carriers respond by raising premiums across entire risk categories, not just the locations that had claims.

3. Carriers exiting the market

Some insurers have pulled out of the family-entertainment sector altogether, reducing competition and driving up prices for the ones that remain.

4. Property replacement costs have increased

Inflation hit construction, equipment, and repair materials hard. When rebuilding or repairing damages costs more, insurance premiums follow.

5. Rising cyber and data liability

With debit card systems, online bookings, and loyalty apps storing customer data, FECs now carry higher cyber-risk exposure.

How This Impacts FEC Operators

Insurance used to be a predictable line item. Not anymore.

Higher premiums affect:

• General liability

• Property insurance

• Workers’ comp

• Liquor liability

• Umbrella policies

• Cyber liability

• Attraction-specific coverage (karting, trampolines, VR, inflatables)

  
  

Even a claim-free FEC can get hit with a double-digit increase.

For many operators, this is now a five-figure annual jump with zero added benefit.

The Hidden Side Effects

Insurance spikes don’t just cost money, they create operational ripple effects:

• Some operators delay adding new attractions that require extra coverage.

• FECs with trampoline or parkour elements face much stricter inspections and safety documentation requirements.

• Higher workers’ comp costs discourage expanding staff.

• Lenders may require additional coverage, increasing loan-related expenses.

And when a location does have a claim, renewal increases can jump 50%+.

What Smart Operators Are Doing in 2025

Insurance costs can’t be avoided, but they can be managed:

Shop carriers annually

• Competition is lower than before, but switching carriers can still save 10–20%.

Bundle property and liability policies

• Some carriers discount multi-policy packages.

Invest in safety training and documentation

• This reduces claim exposure and can influence underwriting.

Upgrade flooring, padding, and netting

• Small investments can lower risk ratings for higher-injury areas.

Perform annual attraction inspections

• VR pods, trampolines, climbing walls, and ropes courses often get better rates with documented inspections.

Implement strong incident reporting protocols

• Insurers want proof of structured, responsible operations.

Add cyber protections

• Encrypt systems, secure WIFI separation, and modern POS security can reduce cyber-liability premiums.