Insuring Pools and Other Attractive Nuisances

Pools, playgrounds, trampolines, and other outdoor equipment are great amenities for tenants. But when it comes to insuring these items, investors may not be covered for what they think. To help guide investors through insuring pools and other popular attractive nuisances, we brought return guest, Jason Jones! Jason is the SVP of Risk Management at NREIG with an insurance career spanning over 20 years. Welcome back, Jason!

What is an attractive nuisance?

An attractive nuisance is anything interesting enough to attract a child, teen, or someone who happens to walk by. They may feel like your pool, trampoline, playground, or something else is interesting enough to cause them to enter another’s property and try it out.

If an investor or a tenant has one of these on their property, is it up to them to then let their insurance agent or landlord know? Or is it up to the agent and/or landlord to do some kind of inspection?

Those are all somewhat true. It’s important for the investor owner to identify what risks are on their property. That’s going to be through regular visits to the property and communicating with the tenant.

Then, some insurance companies do their own underwriting. So, they may drive by the property to get an idea of what’s going on there, while others do rely on the responses from agents, who are getting that information from their investor clients.

Why is it important for investors to know and understand what an attractive nuisance is?

There are specific laws in place for certain counties, districts, or even cities that investors must adhere to. And as an investor, you want to make sure that you’re in compliance with those for not only legal reasons but also because they pose safety risks. So, if you have a pool, the laws may require you to have a locked gate. Or if your trampoline is there, it may be required to be tied down.

The other side of that is if you fail to take some of these measures, you could be subject to penalties and fines. But more importantly, you can also have injured kids and people, which is a potential liability hazard. 

Do insurance policies protect investors if they are liable for any injury resulting from an attractive nuisance?

Insurance companies vary to different degrees in how they provide coverage for attractive nuisances. It’s going to be important for you, as the investor owner, to understand what your policy covers. And you can find that out by reading your policy and asking your agent, both would be helpful. Some policies exclude coverage for damage and injuries, while others offer limited coverage. Again, you can check your policy and with your agent. It’s important that you take those steps to understand your coverages.

Pools are a popular amenity, especially for vacation rentals and apartment complexes. How do you suggest investors insure pools to prevent any type of liability lawsuit?

Not all insurers will cover pools. So, if there’s a pool on your property it’s super important to know if it’s insured with your current carrier. And if it’s not, you need to identify a carrier that would be able to help you out with that. Typically, an agent will have resources or connections to help. 

On the other hand, if you can’t find anyone, then that is a liability that you don’t necessarily want to have without some other form of protection. When you have a pool, your liability risks increase and it’s important that you have enough liability coverage. We recommend at least $1,000,000 in liability coverage. You have to think about what all goes into a liability case- adjusters fees, defense lawyers, and, if multiple parties are injured, you may have multiple parties filing a lawsuit. You want to have enough protection, enough coverage, to handle everything because those lawsuits can get expensive really quickly.

There are some steps you can take to prevent liability lawsuits, and that entails making sure you have a fence with a locked gate and/or putting tarps on your pools. Keeping up with general maintenance is also going to be important.

Could an investor be held liable for an injury that occurs on a playground or other attractive nuisances owned by the tenant?

Unfortunately, the investor can be held responsible to some degree even though they’re not directly involved. These types of lawsuits generate claims against anybody that’s tied to the property. And because the event occurred on the investor’s property, they could be held liable. So, as an investor, you want to understand what is on your property.

What are some measures investors can take to reduce attractive nuisance liability concerns?

We’ve outlined some of them with pools by using fences, locked gates, and tarps. You can also use other security measures, like cameras. For trampolines in particular, you want to have them secured to the ground and make sure there is a safety net around them. And with playgrounds, you want to make sure they are properly installed and maintained. You could also have wells, ponds, construction materials, etc. With those, it’s important to inform all tenants where those items are located and of any rules regarding them. If you can, store and lock up equipment that is not meant to be used. Be specific about your expectations and how attractive nuisances are to be managed so that everyone’s on the same page by outlining it in the lease.

On the other hand, if you can’t find a way to effectively manage them or are concerned about liability risks then consider removing or not allowing attractive nuisances. That is the ultimate protection. Again, outline expectations and responsibilities in the lease. This can help protect you and gives the tenant a document to revisit when they have questions.

Lastly, let’s talk about property damage. How are attractive nuisances insured if say a playground gets destroyed by a tree branch?

Property damage follows the policy. If it’s the investor’s property, there is potential for coverage. If it happens to be the tenant’s property, generally the investor’s property policy won’t cover it. If the playground happens to be a tenant’s, then their renters insurance would typically manage that.

— Game Segment: Fact or Fiction —

This is Fact or Fiction regarding injury statistics about pools and play equipment.

Fact or Fiction? Drowning is the number one cause of unintentional death for children between the ages of 1 and 4. 

Fact.

Fact or Fiction? 60% of fatal pool accidents occurred at residential locations.

Fiction. The actual percentage is 74%.

Fact or Fiction? About 80,000 people in the U.S. are injured on playgrounds each year.

Fiction. 80,000 people are injured on trampolines. 200,000 people are injured on playgrounds.

Fact or Fiction? Playground equipment injuries most commonly occur from using swings, slides, and a composite play structure.

Fact.