Here's what a medical expense limit is and how you can explain it to your staff or business partners.
Two Key Coverages: Bodily Injury vs. Medical Expense
In the world of liability insurance, particularly in an active environment like an FEC, two types of coverage are often confused: bodily injury and medical expense.
- Bodily Injury Coverage is your core protection. It pays out if your FEC is found legally liable for a guest’s injury: for example, if a staff member failed to supervise the rock wall properly or a faulty bumper car caused harm. It usually comes with a high limit (commonly $1,000,000 per occurrence).
- Medical Expense Coverage is different. It’s a no-fault, lower-limit coverage (typically around $5,000). It allows for minor injuries, like scrapes from a fall on the play structure or a minor cut from broken arcade equipment, to be paid out quickly without requiring proof of negligence or legal liability.
Why Is Medical Expense Sometimes Excluded in FEC Policies?
Many insurance carriers exclude medical expense coverage in high-traffic, activity-driven businesses like FECs. Here's why:
FECs host thousands of patrons—many of them children—engaged in moderately risky activities like trampolines, zip lines, and foam pits. Offering a no-fault payout could open the door to a flood of minor claims, regardless of whether the business did anything wrong.
By excluding medical expense coverage, the insurer is essentially saying:
“No free money. Prove legal liability, and then we’ll talk.”
This protects your claims history and helps control your premiums.
Real-Life Examples in the FEC Environment
Example 1: A child slips while exiting a bounce house and sprains their wrist.
- With medical expense coverage: The parents could file for a quick $2,000 reimbursement, even if the injury was no one’s fault.
- Without it: The parents would need to demonstrate that your FEC was negligent—such as failing to enforce sock-only rules or using damaged equipment—before any payout would be made.
Example 2: A teen stumbles in the laser tag arena and bumps their head.
- With medical expense coverage: The situation might be resolved quickly with a small payout.
- Without it: They would need to prove that poor lighting or inadequate supervision contributed to the incident.
What Has Changed—and What Hasn’t
Your bodily injury coverage remains strong. The common $1,000,000 limit still applies to claims where your business is found legally liable.
What’s different is that minor injuries no longer result in automatic payments. Instead, the injured guest must show that your FEC was negligent, whether it’s through unsafe equipment, inadequate supervision, or lack of signage.
While this might seem like a tougher stance, it’s a good long-term strategy. It reduces frivolous claims, helps keep your premiums low, and maintains a cleaner insurance record, which is critical for future insurance renewals or business expansions.
Final Thoughts
In the fast-paced world of FECs, where bumps and bruises come with the territory, it’s important to know what your policy does and doesn’t cover. Understanding the medical expense exclusion can help you better manage risk, set the right expectations with your patrons, and train your team accordingly.
If you’d like help reviewing your coverage or want examples tailored to your specific attractions, we’re here to walk through it with you.
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