Indoor waterparks are a booming niche in the hospitality industry. Hotels with indoor waterparks have grown from 15 in 2000 to more than 125 this year, according to Joe Blee, an insurance consultant specializing in waterparks. By 2008, he estimates 250 U.S. hotels will have made a splash in the market.

Creating a safe, exciting and profitable waterpark requires a team of experts, from architects to lifeguards, says Blee. Yet, too often developers wait until the end of a project's development to consult one key professional whose insight and expertise can impact an entire job — a skilled insurance advisor. “Wait until completion to talk about insurance and you may have already made critical design decisions that can ultimately cost more in insurance or make your project a less attractive risk,” says Blee. “The key to success is bringing in as many experts as possible in on the front end of the project, including the attorney, engineer, architect, contractor, lifeguard and an insurance advisor with experience handling waterparks. It's so specialized and you need to know what you're getting into.

“If done correctly, you have more options on insurance than if you don't involve someone who knows what they're doing,” continues Blee. “For example, traffic flow is key. Have well-defined, separate entrances to the waterpark and hotel, so that wet patrons won't traipse through the hotel, risking slips and falls. It often makes sense to create separate business entities for the waterpark and hotel as well.” (The rationale? If the insurance carrier is particular or the waterpark is beset with problems one has the flexibility to carve the two apart.)

Cost wise, waterpark insurance will take a bigger bite out of a facility's budget — that's no surprise, given the nature of the attraction. “Waterparks have injuries, lots of them, on a daily basis.” says Blee. Expect to allocate from 1.5 to 3.5 percent of revenue for coverage. Factors affecting cost include the site selection, water availability, design, layout and construction, including types of materials used, and more. Also, one's financial backer and franchisor requirements may factor into the insurance equation.

For more information on waterparks, check out the World Waterpark Association at www.waterparks.org. To reach Joe Blee, call Christensen Group at 952-653-1017 or go to jblee@cg-iri.com.

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