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March 22, 2023

The Secrets to Haunt Insurance Revealed

The Secrets to Haunt Insurance Revealed

Craig Watt is a rare combination of a seasoned insurance agent and a professional haunter at Terror Isle in Texas City. Today, get insights on the spooky side of insurance policies as Craig unravels the mystery of haunt insurance for amateurs and pros...

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Craig Watt is a rare combination of a seasoned insurance agent and a professional haunter at Terror Isle in Texas City. Today, get insights on the spooky side of insurance policies as Craig unravels the mystery of haunt insurance for amateurs and pros alike. Dare to discover the hidden vulnerabilities in your coverage, and avoid getting tricked by what it doesn't protect you from. Today’s episode is a recording from Brian’s Haunt Masterclasses; you can join those at haunters toolbox. Support for this episode comes from Gantom Lighting and Controls. See what you’re missing with a free demo. Subscribe to everything from the Haunted Attraction Network here.


Craig Watt: So, I've been doing this as long as I've been doing haunting. I started home haunting in 2000 with my kids, and it grew into a monster like everybody's. Then eventually I took the plunge to go pro. Last year was my first season. So, I'm coming up on my second season for the haunt, excited to do it again now that I've done the first one and I think I know what I'm doing. Then I also just opened up my escape rooms a couple of months ago inside the haunted house, which is a little different than the way everyone else does them. We actually plugged haunted house escape rooms in the rooms of the haunt, which is a whole other talk. I've been doing insurance just as long, I'm a second-generation guy actually, but I started digging around when I had to go buy my own insurance, which was weird selling to myself because I've never really done that. I gave myself a lot of flak and beat up on myself up to try and get a lower price.

So, basically, I started looking at some of the policies, and I've talked to several haunted houses. If any of you guys, y'all ever want to send me your policy, I'll look at it. I don't sell insurance to haunted houses. I don't want to. I got more headaches than I need in insurance, but I'm always happy to help you guys answer your questions and look at your stuff. I started doing that for some escape rooms too because I want to learn what's out there as well and see what to look out for. But my door is always open. If you guys just message me on Facebook, e-mail me, or whatever and I'll give you that in a second. I'm happy to do that.

So, I have a talk I'm kind of putting together and then I'm going to be speaking at a couple of these conventions, HAuNTcon and Transworld I've been asked to speak at, just talk about insurance in general. Because I think in our industry, and also in the escape room industry, we know fire code as good as firemen do, but we're lousy at insurance. We really are. I hear things all the time and I just cringe when I look at some of the stuff on some of the pages on Facebook and things where people are saying things that they have no idea what they're talking about. Sometimes they do, but it's interesting.

So, I wanted to tackle home haunts first because I know statistically, Philip was telling me one day, I was trying to see if there was any... I have a Work Comp company that wants to write a whole industry, like be the program. I was like, I want to go see how many haunters are out there that have Work Comp. You'd be surprised, there's hardly any pro haunts. You'd think there's a billion of them, there's not. We call being pro, taking money in. But as far as like year-round, or have a real professional type set up, there's not as many. There are more home haunts than anything, as y'all know.

So, how do you cover a home hunt for what we do? You know, you can have a walk through the front yard, or do what I did, I had a graveyard in the front, then I had a garage that was loaded up, and then I built tents outside and had all this stuff, wires everywhere, nothing's fire code. Your homeowner's policy is your only defense. So, if you own a home, you buy

 homeowner's insurance and homeowner's insurance, most people have $300,000 in liability, and that's where your dog gets out... Don't you have Pitbull, Brian?

Brian Foreman: Yeah.

Craig Watt: OK, your dog's probably sweet. But Pitbulls, right? Sometimes they're not sweet. Brian's dog gets out and bites a kid, the policy protects you, unless the policy says no Pitbull’s, and it could. There could be some dog exclusions, bite exclusions, and stuff like that. But little Johnny gets hurt on the trampoline, all that stuff is covered. Nowhere in a policy for your house does it say, "haunted houses are excluded." It doesn't say it. So, if someone that says, "am I covered?" Show me where it's not, and that's the big thing.

So, here's the catch, this thing called, "business pursuits exclusion." I had to go look up this term because I'm not a homeowner’s guy, I do businesses. Business pursuits exclusion says, if you're taking money for a business and operating at your House, any damages resulting from that business is not covered under your homeowners. So, if you are collecting money at the door for your home haunt and someone trips, falls, gets hurt, gets electrocuted--I hope none of this happens, they call me the black cloud--or there's a fire and someone dies in the garage or whatever, the insurance company is going to grab that policy and go, "uh uh, business pursuit exclusion. You were taking money." Or, I'll throw this one at you, donations. I wouldn't even take donations because that could be argued by some stingy insurance company as a form of revenue. Even though you're giving it away, I wouldn't play with it.

If you were going to do this at your house, I would not take any form of monetary or even canned food or anything. I wouldn't do any of that, because you're hanging out there. Otherwise, generically speaking insurance policies, I was looking, every state's different on a lot of this stuff, but generically speaking, you're good. You're covered because it's such a wacky thing we do, insurance companies really don't know we do it. Now, if all of a sudden had a rash of claims on homeowners' policies for home haunts, there would be an exclusion for it, like mold, that's a big one in Texas.

So, if you were taking money, how would you cover it? I'd go get a special events policy, and you can buy those from all these haunted attraction insurance agents. You can go online and buy these. There are these computer systems you use, just punch stuff in. It's no different than like when you go to the trade show, I'm sure you had to go online and go buy a special events policy.

Brian Foreman: Yeah, I think it was ACT Insurance that was one of the big ones.

Craig Watt: Exactly. So, you go on there and buy special events policy just for that night.

Brian Foreman: And then we use Frazier insurance here.

Craig Watt: Yeah.

Brian Foreman: That's a big one that goes around a lot.

Craig Watt: There's the new one, Granite, I don't know if they're doing it. But you can even go to your local agent, I'm sure they can get it. But there are a lot of special events policies cheap online. But that's one way to cover it.

Let me throw one at you that no one thought about. Brian, you and I kind of got into this. We have an industry of people that make stuff at home and sell professionally. If they burn their house down making masks or whatever they do, they could have a problem on their insurance, because they're conducting business, taking revenue, there goes that exclusion. So, that's something nobody thinks about because we're an industry of small artisans, craftsmen, that make stuff up in their little sheds and garages and stuff like that. They're make really cool masks and all the stuff, that's not covered by homeowners. If you don't own a home and you'll have homeowners, you're renting, your renter policy has liability usually on there. You better have a rent policy if you're doing that kind of stuff. I don't know how many people rent a house that do home haunts, but that's kind of nuts and bolts of that. But you do need to treat your home haunt like a pro one. You really should watch your extension cords, make sure you have fire extinguishers, you should practice the same protocol that the pros do, just because you don't want to have a situation if you can prevent it.

Brian Foreman: Right. Make sure you have exits and stuff too you, like if you got around the side of your house, your backyard, yeah.

Craig Watt: Put signs up, plastic exit signs, just those little touches like that could be the difference between you getting sued or not, because this is a sue happy. Canada is not the same as America, people love suing here. They sue for everything. 

Darryl Plunkie: Yeah, but I imagine there are some similarities, that's for sure, right? I don't know what they are, because I'm not doing a haunt at home. But the same thing as if I'm creating something, if I'm an artist, how is that going to affect me? So, that's something that I might need to check into here. 

Brian Foreman: And everybody, we're not different from other people and people making things at their house. Like if you're a salesperson, I work from home all the time, that's different, they let that stuff slide, it's manufacturing or having customers at your house, those types of things. It's just something to think about. I mean, it's probably kind of low risk on the manufacturing side, unless you're welding armatures and things like that for props. Dude, that's a big fire risk, that adjuster, they're going to be looking for anything. "What are you doing? Oh, you're running a business out of here?" 

I was reading articles kind of studying up on this stuff, because this is not my forte, and there was somebody running a garage out of his house, he was fixing cars for money, caught the house on fire, and they didn't pay. So, that's a side of the home haunt stuff, but hopefully that I know there was somebody that asked a question. 

Brian Foreman: Victor was, he was asking about it. 

Craig Watt: It's the biggest one. There's a lot of, I don't even know what to call it, it's not factual information. I went and looked it up because I didn't want to speak out of not knowing either. So, when we get to the pro haunts, that's a whole different game of things. So, the number one policy that the pro haunt has to have is general liability, number one. Liability covers bodily injury and property damage resulting from your work. Our work is having a haunted house. So, in the act of scaring someone and they fall down and break their arm, that's bodily injury resulting from our work. Or, somebody's out with their chainsaw out front chasing somebody and they take the chainsaw across someone's car, that's property damage resulting from your work. So, it's covering third parties. It doesn't cover you, it doesn't cover your employees getting hurt, it doesn't cover your stuff, it covers harming other people and their stuff. That's the basic definition of what general liability is.

So, with haunts, generally, they're based on attendance. I don't know how y'all's are, but mine’s asking how many people, and I think I tell them 5,000. I'm not even there yet, but then they take that times the rate and that is how they spit out the price. That's how most do it. I don't know if you guys get audited. What they're supposed to do is say, "hey, how many people are going to have this year?" Oh, 5000. "Then at the end of the year they're supposed to come back around and go, "OK how? Many did you really have?" 10,000? OK, well, you owe us double." That's how liability usually works. I've never been audited, watch I get audited now.

Brian Foreman: Once they watch this video. 

Craig Watt: They're going to owe me money, actually, because I overestimated, I got a little cocky in my first year. But that's how the pricing works. Price is based on whatever the factor is, in our case it's usually not sales, but it could be sales, on attendance, times the rate gets the price. 

Brian Foreman: Does it go by how many nights you're open? Because that's one of the things...

Craig Watt: Nope. Now, the price is determined that way. Now there's questionnaires with these guys. So, is it Granite, is that the new one? Is that one that was at Transworld? 

Darryl Plunkie: Granite is one of them, and what's the other one, the one that I interviewed? Can't remember the name of them at the moment. 

Craig Watt: I was thinking Granite is the one that has the new thing where they're really trying to underwrite these things, which sounds pretty cool. So, Brian, what you're talking about is they're going to ask a series of questions. My understanding of what I've seen so far is, insurance companies don't understand what haunted houses are, and they don't really understand what escape room games are. Escape room games are just as bad on identity, they don't know where to put them, I've seen them all over the place. So, they're going to ask some questions, some of them might underwrite a little deeper. Granite, I think, is the one that's really going to bat. 

Brian Foreman: Yeah,, very top. It's Haunted Attraction Insurance at the top under specialties. 

Craig Watt: That one, they're trying a different angle where they're really digging in. OK, so I'm a perfect example of the lowest-risk haunt. I don't touch. I don't do anything extreme. I don't have pyrotechnics. I don't have any, you know, crazy stuff. Where there could be these, like right down the road, I sent my whole crew to go to Friday 13th at Creepy Hollow. Creepy Hollow is a great haunt, great people. They let my people go play there for free. So, they went over but they're a touch haunt, and they're a little more extreme on that stuff. There are more risks associated when you're touching people, you can hurt them. If I'm not touching somebody, I'm not really hurting. If they fall, I got a risk. So, there's different things. Are you using Pyro? Are you selling alcohol? Those types of risks, I think Granite's approach is really looking at what you really are as far as your terms of risk, and are you CHAOS Certified? They're giving discounts for that, it's really cool. I have not gotten a quote from them to see what it looks like.

Your liability can be based on that questionnaire, but they really just don't understand haunts, because if they really knew what we did... Surprisingly, we don't have claims and that's why they don't pay attention. There are some claims, but for the kinda crazy stuff we do and how many people fall over and scratch themselves, they just laugh about it, they think it’s cool, and then they leave, it's shocking because if you're a restaurant you'd get sued every time. 

Brian Foreman: One of the questions for Frasier was about moving floors, live animals, or stuff like that. I'm like, oh, really? Moving parts, moving animatronics or whatever. 

Craig Watt: So, they're basing their prices on those, so they're bumping that price up every time you say yes on one of those things. Of course, you need to be honest on them, because if they come out and do an inspection... I've had a property inspection, they never have done the liability inspection on me, they can come back, or if you have a claim and you weren't honest on that questionnaire, they can try to get out of paying it. 

Craig Watt: So, there's two kinds of liability policies in this world, you got the annual policy or the special events policy. Donat, I believe I talked to them, they can do a year-round, like for me I need a year-round because I have escape rooms and then I have the haunt, so I never stop. Most people don't go year-round. Most people just do the season, but there's a little quirk with that, and I'm not saying Donat, and I'm not saying anything bad about any insurance company, but if you buy special events policy because you're just getting from when you're open, what about when you're under construction phase in the summer?

Darryl Plunkie: That was going to be my question exactly. 

Craig Watt: What are you doing? So, let me give you a scenario, it took me two years to build this stupid thing I got. Do, I had people coming in and out of this building. I had 1099 independent contractors, I had AC guys, I had all this stuff. If I just had a special events policy just for my haunt season, what's covering me for causing property damage or bodily injury to some other party? I got nothing. So, you need to have... 

Donat, the way they explain the way they do it is pretty interesting. They have a policy for the season, which is probably higher risk, more expensive, and then you have an off-season policy. That's how they do it, which is interesting. I don't know if the price is cheaper than just buying a year-round policy, because my year-round just says, "how many people do you have?" 5,000. "OK. How much are you going to generate on your escape rooms?" And I'll put a sales price, that's it. They don't ask me how many days I'm open or all that stuff. 

But if you do these special event policies, please make sure you're thinking about build season, because if someone gets hurt, somebody comes out there that's a friend of somebody that works for you and they get hurt, or some little kid gets in your haunt that's outdoors, any of that stuff. That one that happened not too long ago, where they got in and did the arson, is that Colorado? Or they burned up part of their lawn, some kids went in there. 

Brian Foreman: I think it was Colorado. 

Craig Watt: Somewhere over there, some of those kids got there and burned it up, and they died in there. Their parents could turn around and see that you didn't have proper fencing around to protect them from going in there, all this stuff, they can just make stuff up. Well, if you just have a special events policy, you're screwed. You have no defense. It's coming out your pocket. So, those special events policies, I'm not really sold on them. I know it's cheaper, but you really got to make sure you question what you're doing off-season. 

Also, where's your stuff stored? If you store it somewhere, or if it's just left out and they open it and it's some outdoor haunt and kids get... You know, teenagers, they're going to get in it and they're going to get hurt. The parents are going to sue you. 

So, there's a lot of those things people aren't thinking about, they're just too focused on just the season. So, the annual policy will cover you all year round. I would feel more comfortable with that. That's what I did. I didn't even question it, because I'm tainted because I see lawsuits all the time, and dude, people will sue you for anything. I've done a million things and I've gone, "what? How did that happen?" I had a kid sit on a "Caution: wet floor" sign, it collapsed, and he got paid. OK, anybody can sue you for anything. An insurance company is going to settle because it's cheaper to settle than fighting. 

Brian Foreman: Now is it true that if you file a claim next time your insurance goes up?

Craig Watt: So, the way the claims work is they usually look back three years, some look back five years. Insurance rates are up right now, you're going to probably see an increase on yours, and it's up more than normal. Insurance is going through this phase called a hard market where they jack their rates up. They're greedy and they know everybody’s sales are going up, so they're jacking the rates up. But our industry, my understanding is, it's pretty recession-proof, like people want escapism when times are hard. You saw what happened after COVID, everybody had record sales. So, they have the rate, they look at your claims, if you have a history of claims they're going to jack that up, or they're non-renew you and whoever you go to next are going to make you pay because they can get that out of you. 

So, it does affect it, and they do look back three years. Some look back five years, most look back three years. So, when shopping for liability insurance, go to all these, try all these markets, it doesn't hurt to look. But you want to look at the exclusions, that's the key to all this. Everything's covered on a liability policy except what's excluded, and it sounds weird, but if an alien comes tomorrow and laser beams my building and blows it up, it's covered because I don't have an alien exclusion. So, it's crazy sounding, but an asteroid hits my building, it's covered. But if it's nuclear, mold, war, terrorism... 

Darryl Plunkie: Act of God. 

Craig Watt: Acts of God, we're on liability that would be property.

Darryl Plunkie: OK. 

Craig Watt: That's a weird term nowadays with insurance. It's going to be this exclusion list. If you get a quote from somebody, do not buy it till you look at the exclusions, especially for us. I'm going to give you my observation. The first policy I bought had a total alcohol exclusion. I don't sell alcohol, so the average haunter will go, "I don't sell alcohol, no big deal." What about the guy who got hammered in the parking lot and he gets in a fight with somebody and somebody shoots him, something like that, gets stabbed in the parking lot. Or, gets hammered and comes in the building and gets hurt. Well, if it's something alcohol-related, they could decline to pay the claim. So, you don't want to have that on there. But for me, it's really weird being a haunter and an escape room people, cause it's different, it's totally a different business. The escape rooms, I want people to BYOB. Haunt world, hell no! You don't want alcohol on the premises, unless you're selling it, I mean if you're one of those. But I don't want to have alcohol because I don't want to deal with drunks, because they punch you and hit your actors and all that. But escape rooms? Oh yeah, bring your own alcohol party, let's do it, because it's using more behaving--and I say behaving, we'll find out--adults. 

Brian Foreman: And usually with a group of people they know.

Craig Watt: Yeah, usually it's a business event, or something like that. So, alcohol exclusions, assault and battery exclusion. If you see assault and battery exclusion on there, yes, you're not wanting to assault and battery someone. But if someone gets beat up in a parking lot, with that exclusion, most of them say they're not going to cover it. So, it's not you beating them up. I'm highly against you having your own security. I know haunters want to have their own security. Dude, hire a licensed, insured, off-duty cop. I use a cop that runs one of the businesses of cops. So, it's the local city, but he provides the Work Comp and liability. So, if he goes and beats the snot out of somebody that's acting up, I'm not liable. They can try to sue me, but I'm not liable because I didn't do it. If he gets hurt on the job, I'm not liable. If you just hire security people and they hurt someone, it’s on your liability insurance. If they get hurt, it's on your Work Comp. I would highly advise, I know it's expensive, but it's a hell of a lot cheaper than what it will be when your insurance goes through the roof, to hire a professional officer. I'm in Texas, everybody tries to tough guy it, just be careful with that. 

So, you got alcohol exclusion, assault and battery, then you got the stuff like what you're talking about, Brian, is animals, the other one is, I had a no touch thing on mine. I cannot touch patrons. They're slipping those in because they see those extreme haunts, and you know who they are, and I'll never mention that name on this podcast. But that kind of stuff, you need to read those exclusions. If you're cool with them, fine, you just need to know what they say is not covered, and if you see one that you're not comfortable with, you need to ask the agent to give you a copy of it and read it, because you may be doing something. that's not covered. Also, you know with lakes and ponds, another one that no one thinks about, copyright, trademark stuff. I just went through a haunt, pretty famous one, that had a lot of IT stuff, and y'all know which one. How many people are using stuff off TV? I have to be very careful, I have a pirate haunt. I'm not even coming close to having anything that looks like Johnny Depp. No, thank you, I don't want Disney banging on my door. 

Darryl Plunkie: You're not mentioning the Caribbean at all. 

Craig Watt: No, I don't even know what that is. But yeah, I know my kids here wanted to do a TikTok, there's some trend with Johnny running and stuff, and I'm like, "let me see it first, because I don't want Disney banging on my door," because it's this whole making fun of him in court. Liability does have some coverage for false advertising, and some of this copyright infringement stuff. We've actually paid the Elvis estate on a client of ours that got sued by the Elvis Estate for using Elvis' likeness on a printed item. So, that is in there, and that's generally in there, you don't have to worry about that. So, that's liability. That's the big one. Does anybody have questions about liability, because that's the biggest question for everyone. 

Brian Foreman: Well, Aly had a question. A client asked her how often pro-haunts get sued, and the most common issues. 

Craig Watt: I'm a bit of a rookie in the pro world, I mean, I've been studying, I've been listening to Brian's podcast since I've been a home haunter, I've studied all these, I listen to all of them. I'm shocked there's not more. I found out the other day, some lady actually fractured her foot in my haunt during the haunt season, and I never even knew about it, no one knew about it. One of my coworkers' moms ran into her and she said, "yeah, I had a great time in there. I broke my foot in there though." I had no idea. No idea. 

Brian Foreman: We've had people get hurt inside of ours, and I don't know if most people think that they're entering, this enter at your own risk type of thing. You hear the big ones on the news about people getting shot or cut, you know, assaulted. I'm sure there's something going on there, but those are those are usually the ones that make it to the top. 

Craig Watt: I think the psychology of going to a haunt is the best weapon we have, honestly. Because people are knowing they're going in there to be scared and fall down and be shocked. There's something with the psychology, versus like a restaurant or grocery store, where when someone falls in there, man, it's three days later and they're suing, where here they fall, they think it's funny. I remember, I had two kids, because I have hard, stucco, gritty walls, I mean they're like stone rocks, they're like sandpaper. I'm scared to death with the haunt with them, but the cool thing about the haunt is everyone stays in the center, they tuck down, and they walk through, so they never really get hurt. But, you know, the runners, you worry about the runners, right? I had a couple of kids get scratched and I'm like, "oh crap," and they thought it was the coolest thing ever. I'm like, freaking out, you know, insurance guy with a haunted house. So, I'm getting Band-Aids, washing it for them, and fixing it, but it's a mindset, I think. I'm surprised we don't have more. But there are some pointers on this. 

So, from a proactive approach with dealing with liability, which is our biggest risk, get cameras. You better get them. They're not expensive, it's about as much as a prop. Make sure, and I'm going to tell you right now I'm a hypocrite, right here I have a camera system. I have so many high-def cameras from these escape room games. I have a 10-terabyte hard drive, it fills up in four days. It's not big enough. Crazy, right? 10 terabytes, who would have thought, right? I got to get more hard drives. Here's why, you need at least 30 days of recordings, because something's going to pop up, and mine overwrites in four days. I got to fix this. It's on my to-do list, especially before haunt season, I got to buy some hard drives. 

So, here's what happens. When someone falls and gets hurt, they're going to get up, and they're going to go, "oh, I'm fine."

OK, your manager, your key person that's in charge with incidents, which you better have, one, is going to go, ‘OK, no problem. Here, go get you a shirt or for free or whatever.” You know you're going to pat them on the back. Restaurants always give them their meal for free, and they just go about their business. Well, then what happens is, at least in Texas, you have two years to sue. Everyone's lawsuit comes in one year, 11 months, almost two years to the point. Because they want you to lose all your data, you're going to overwrite that video from two years ago. So, what I advise you to do is have 30 days minimum. Then, if anybody gets hurt, time mark that person in the haunt. Whoever is the security person, time mark when that is so you can go pull that video and just put it somewhere. Unless you're guilty, you may want to run and delete it. I didn't say that loud. You want to protect yourself, and the biggest problem is the person gets hurt, they're always embarrassed, they don’t want to make a big deal out of it, they get home, and then somebody goes, “oh, you can sue that place.” They call the lawyer, the lawyer comes and sues. So, if you pull that tape and you get a little incident report, I didn't make a little report, just write all that stuff down, whoever's your security person take their cell phone and take a couple of pictures of whatever happened, right? Because the more you have the better off you're going to be to try to help the insurance fight it.

So, insurance companies pay for your lawyer. Everyone complains about the price of insurance, what we pay, they supply a lawyer. If you have $1,000,000 policy, the lawyers are outside the $1,000,000 to pay the claim. So, they have a duty to defend you, as long as it's covered. Well, a few thousand bucks for a lawyer, that's cheap. Most lawyers cost you $5,000 just to get them on the phone, right? But if you give all that ammo to them, you're better off. So, make sure you have video. Make sure you pull that stuff. Don't be fooled by the, “Oh, I'm OK.” Just go ahead and just assume you need to pull it.

Waivers are bigger in the escape room business, most haunters don't do waivers, we have big signs that nobody reads, right? You can take a waiver and wipe your you-know-what with it, because it's useless.  I'll give you an example. An escape room, if I go sign a waiver and I get in there and I'm climbing on stuff and  break my neck or whatever, I can't really sue because I signed a waiver, right? My wife can sue, because now whose going to bring home the paycheck to pay for her shoes? My wife likes shoes. So, what about my kids? My kids could sue, cause now Gavin can't go to college anymore cause Dad can't work. See what I'm saying? Waivers are garbage. Except for the person that signed it, and kids can't sign waivers, adults have to sign waivers on behalf of the kids.

So, in the escape room industry, they're all about waivers, they're wavering everything I'm walking in there going, “why y'all do this?” I said, “it doesn't work,” and I was talking to this guy that was a consultant for me. He says, “I just do it to get the e-mail address.” I was like, “Oh, that's why!” It's genius marketing, because you have signed it. When you get everybody's e-mail address, you put it in your database and then you can plaster them with emails. But waivers are, they're OK if the individual signed it, but it's not going to stop other parties from suing you. No one thinks about that. 

Darryl Plunkie: That's good to know. 

Brian Foreman: Do you think that the people that are signing waivers think that it's legit, so they're not even trying to fight it?

Craig Watt: Most people don't even read them when they sign them. There's all documentary, it used to be on Netflix or some like that, called Terms and Conditions, and it's a documentary about all the crap that we don't read when we sign for things, and if you really read it you wouldn't ever sign up for anything.

Brian Foreman: Yeah, like 14 pages long, yeah. 

Craig Watt: No one reads. I mean, we've done probably 75 groups through here for escape rooms, and no one's ever questioned it. If someone said, “I'm not signing this.” I'm like, what am I going to do? I do try to get them to, just kind of as a mental thing about, “oh, I'm signing, so I better behave.” I think there might be a little bit of that, kind of like our signs we do. But you know the best thing to protect yourself is cameras, cameras, cameras. Don't let alcohol in. Drunks, don't let them in. If you see somebody that you got some weird feeling about, just give them their money back, send them home. 

Darryl Plunkie: Now, Jimmy has got a question for us. Are you able to add a part to a waiver that no family members can sue or waive their rights if injury occurs, yadda, yadda? 

Craig Watt: They would have to sign it. You'd have to get the whole family to sign it and that would be really weird. For us, we have a waiver program for escape room games. We had a Girl Scout troop come through, well the troop leader can't sign on behalf of all these little girls, so I had to e-mail her the link and every parent had to sign on behalf of the kid. Now, that is a level of protection, but there's there are holes around that. It's not the be-all-end-all, especially these touch haunts that are all, "we have them sign waivers," and all that. Y'all know the big one that does all that. That's fluff, that doesn't do anything, because if he breaks my neck, there's no waiver in the world for assaulting someone. 

I don't know about your state, but in Texas, hazing is against the law, assault and battery is against the law. You can't sign a thing that allows him to waterboard you. That's the Geneva Convention, but apparently people think, "Oh, they signed a waiver, they must be allowed to do that." It's all fluff, because a lawyer could get a hold of that and tear it apart, that's why I think it's all fake. 

Brian Foreman: Ally had a question going back to the first aid. Do you have to be certified, first aid certified, to work on somebody like Band-Aids? 

Craig Watt: So, my wife, I need to get it first, my understanding is that we get, and I don't know if it's a state thing, because a lot of the stuff state to state. General Liability is kind of a US, Canada, and US Territories kind of thing. We're all kind of lumped together, and certain states have certain things they'll throw in there. The difficult ones are New York and California, they have weird stuff, and Texas sometimes does, and it's the weird states. But with first-aid stuff, my understanding is if you're certified first-aid, you have a legal obligation to go help someone. So, it's your requirement. My wife is certified, so if somebody is choking she has to go help, legally. I don't think you have to have something like that. I mean, if you're a big haunt, you should have a medic, right? I'm a small haunt, I don't need a medic. 

Brian Foreman: We put Band-Aids on people, we've given people you know just, "You OK? Sit down with some ice and chill out."

Darryl Plunkie: But is there going to be any repercussions if Brian, who isn't currently certified, puts a Band-Aid or gives an ice pack or moves someone? 

Brian Foreman: It gets infected or something, and then I'm liable. 

Craig Watt: Yes, yes, you could, but it would probably look better in court that you try to help the person than just saying, "screw you kid, bleed out." But you know, I mean. I have an ex-marine that fought in Afghanistan, that was a paramedic that works for me. So, I mean, he can put anybody back together. So, it's probably good just to have somebody on staff. I'm going to do that this year, get some people CPR certified. It's not going to prevent you from getting sued, but it's the right thing to do to help people. I mean, if you are trying to set their arm because they broke their arm, I don't know. But you know what, actually an insurance liability coverage, there is, this is bizarre, incidental medical malpractice coverage. 

Brian Foreman: And that covers that situation?

Craig Watt: Now that I think about it, yes, you're covered for incidental. Because when I go sell to these companies, they go I'm not a doctor or surgeon. I'm like, "I know incidental medical malpractice coverage." So, when you're trying to help somebody, so in the liability you have a million per occurrence coverage, usually, that's $1,000,000 in your bank for a claim per occurrence, and an occurrence is one issue. So, if you have one issue at the beginning of the night you had another one at the end of the night, it's two occurrences. So, you have a cap of $1,000,000 per occurrence, and sometimes you have deductibles. Then you have the aggregate, that's the most you can have in one year. Most people's aggregate is $2,000,000, so you got $1,000,000 occurrence, $2,000,000 aggregate. That means you could have two $1,000,000 claims. Then you have damaged or rented premises coverage. So, if you're renting a place, they throw in like $100,000, which doesn't really cover if you burn down a rented building. The $100,000 isn't going to cover squat, the guy's going to sue you, he'll get the whole million plus the $100,000. But there's one called Medical Payments on there, it's like usually $5,000. You'll see these little, tiny things that says $5,000, that is goodwill money to pay for little Johnny breaks his arm in your haunt. You could use Medical Payments to pay for that as a goodwill gesture, so he hopefully doesn't sue you and it doesn't count and get your claims. I can tell you, little Johnny's parents are going to sue, you never see people use it, but it's on there. That's the pieces of liability.

The next big one is Work Comp. This is one that I'm telling you, this is the hot spot for haunts. I laugh at these posts. Employees, independent contractors, and volunteers, everybody thinks they understand this on these haunt forums. I just laugh. Hey, I'm not an employment expert, in the insurance you just deal with it. Unless you're a nonprofit, volunteers is questionable. So, in the US, I think it's the IRS. Code that determines what the definition of an employee is. If you provide them with a uniform, tell them when and where to be, that means what time you need to clock in and clock out, pay them hourly, or any of these three, they can make a case for an employee. 

Craig Watt: So, say you're one of these haunts that does volunteers, because they don't want to pay them, because that's what it is. Not all of them. I mean, I know there's nonprofits that do it for fundraising, but I'm saying for-profit haunt that has volunteers. You gave them their clown costume, you told them where to be, and how to do their scares, the boos, and then you're paying them by the hour or by the day, by definition, under the IRS code, they're an employee. 

So, if the IRS caught onto that, you're going to get charged back unemployment taxes, all that FICA stuff, and all that you're going to get hammered with penalties. But from an insurance standpoint, if they're volunteer and they have those things, they're considered an employee, if they get hurt, they can make a claim with Work Comp. Well, every state, it's law to have Work Comp, except good old Texas, because we got to be different. We're cowboys, so we're like, "it's your choice." Well, in Texas, if you don't have Work Comp, and a lot of people don't, you as an employee could just sue the crap out of your employer for as much as you want. Everybody else, you just go to Work Comp, they pay for your injuries, they pay for a little bit of your time off, all that stuff. 

So, in most states, you just have to have it. Some states you buy from the states, it's state specific, some you buy from an agent like me, some have a hybrid of both. But Work Comp is huge, and it's not that expensive because Work Comp doesn't understand what we are. They put us under Traveling Theatrical Entertainers, or something like that, like we do plays all over the towns, we travel. They don't understand how crazy haunting is, and how physically hard it is. They have no idea the bruises, cuts, and bangs. They have no idea. So, the price they charge us, in my opinion, is super cheap compared to what we do. We're more stunt people, but don't tell them that. So, that's based on payroll, times of rate, there's your price, and then there's some discounts and things that can apply to that. 

The big thing is, I would not play that game with employees. I know why people do it, because there's a lot of haunts that collect cash and some of that cash might not get to the IRS, and then there's employees that are paid under the $600.00 mark. So, if you're under $600, you don't have to report them to the IRS, everything is under the table, right? But if you start getting big boy, you better watch that, because if the IRS catches on, you're going to get hammered. I mean, you could get put in jail for fraud, stuff like that. 

From an employee Work Comp standpoint, they're an employee, no doubt about it. If you don't pay them, they could turn around and sue you for overtime, they could sue you for not being paid wages. It's crazy. Haunts are really bad with this, and I understand why, we have tight budgets, we only have 20 something days to work, and we're just trying to get the most money we can out of things. They skirt around this thing with this volunteer crap and it's not good. Independent contractors is the same thing. So, if you 1099 people, which a lot of guys do that, that's where they're not an employee, you're not taking out taxes on them. 

For instance, Darkwood Designs, Kevin. Kevin came to work for me, he helped me build my haunt. He owns a business, and I 1099 him. He's an independent contractor, brings his own tools, I don't tell Kevin how to do things, Kevin tells me how to do things. He builds stuff. I say, "look go build me a boat," and he builds me a boat. I don't tell him how to do it, I don't pay him by the hour, I don't do any of that stuff, OK? He's a true independent contractor. Somebody working at your haunt that you're 1099 because you don't want to collect the taxes, is an employee. You can get away with it for a while, but if you ever get audited by the IRS you're screwed. Also, if they get hurt, they can make a claim that they're an employee. If you have Work Comp and then they make a claim, well, you got Comp, they'll go on there and the Work Comp people are going to collect. 

My research on this, if you're nonprofit, some states you can get away with it, I think most of them you can't. There's a few states you can put volunteers on your Work Comp, if they're volunteers, but if you're a pure nonprofit haunt, say, like a church haunt or something, you can go buy Accident Policies. It's not Work Comp, you have to be a nonprofit. 

What an Accident Policy is, I call poor man's Work Comp. So, they'll supply you like $1,000,000 for injuries and $1,000,000 for legal. It's the same thing a church or a school can buy, accident policies. If they have kids in athletics, they do this a lot. They have these accident policies that you paid for. It's basically kind of like Work Comp, but it's for volunteers or non-paid people. So, if you're non-profit, it's cheap too, it's not expensive, I would buy one of those just to protect myself, because if someone breaks their neck or gets killed or hurt or something bad happens, you don't want to lose everything you have. 

Brian Foreman: Jan asked about the Good Samaritan laws, and maybe it's about the first aid stuff. 

Craig Watt: Yeah, I mean, I'm not an expert in that world, Jan, but I know you have some protection, but that would be, I would imagine, just me guessing, that's protection for you personally, not a business. You do have some of that. You have an obligation to go apply the CPR, and in return they protect you for you trying to help them, yes. But that's not where you're going to get sued, for helping somebody. You're going to get sued because they fell before, or got hurt. Was it one of you guys, or am I imagining that somebody told me about a claim where a chainsaw or something like that, they chased the girl out of... 

Brian Foreman: We did. 

Craig Watt: Yeah, they chased out of the parking lot into another area. 

Brian Foreman: The girl fell and cut her shin open.

Craig Watt: My building, I'm right up on an old city street, like the old downtown, and my actors were chasing them on the sidewalks. I had to get on them because they're going to chase them into traffic, you know, that's a problem. That's where you're going to get sued, doing dumb things like that. Sometimes our people get a little overzealous with the chainsaws, and luckily, I'm a pirate haunt, I don't have any chainsaws. But yeah, it's chasing them in the parking lots and stuff like that, you got to be real careful. 

Brian Foreman: One of our lead actors is EMT and sheriff. So, we have one person down right in the hallway and he has his own personal bag in his scene which has his walkie-talkie straight to the ambulance. So, he was on it, called it in, and boom they were there in like 10 minutes. I don't know how that would be covered or not, I don't know how that works. 

Craig Watt: Yeah, I mean, that's not you. That's not you. It's the incident that caused the damage that's the problem. It's not you trying to help them. Most people, they're not trying to sue you because you helped them.

Brian Foreman: This girl, well, we probably shouldn't even have let her in the building, because she was completely wasted. 

Craig Watt: That's the biggest thing, it's being proactive. It's the eyes up front. My very first day, that grand opening, I didn't have a cop because it's 3 in the afternoon. Like, nothing's going to happen at 3 in the afternoon. I shit you not, I got the drunkest dude you've ever seen come through, got past my marine. He's with his girlfriend, his girlfriend has a dog and she's like, "can I take my dog in there?" You know how people are with dogs these days, and I love dogs, they take them everywhere. I'm like, "you want to take your dog into a haunt?" "Yeah!" And this dude's about to fall over, and he starts getting at me and I'm like, "I think I'm about to get in a fistfight on my first day of opening at 3:30 in the afternoon." I'm like, what's going on? But it was the proactive thing. The guy up front, I mean, it was our first day, and half of us don't know what the hell we're doing yet. If my guy would have saw that at the beginning, he would have been like, "guys you can't come in." It's really watching the alcohol stuff. Alcohol's the biggest problem, I would imagine, in haunts, they just get a little crazy. We had one incident other than that, where the guys were drunk and they put their hands on the actors. I know who one is, and I'm still looking for him because I know him, and I will find him. 

Brian Foreman: Oh, and adolescent groups that are not with an adult, I found that, a bunch of 13-year-old kids or 12-year-old kids that don't have an adult present. So, I'm thinking about making the limit on, you have to have an adult present if they're in a certain age or something. 

Craig Watt: Break them up. I was doing that in the home haunt days. Man, you got to break that. The 13-year boys are going to show off and they're going to do something stupid. So, you just break up those groups into smaller groups. When they're in smaller groups they don't feel as tough, they get a little more scared. It's just being proactive on it. But on this Work Comp thing, it's just Work Comp, if you have it they can't sue you directly for a workplace injury. It's no questions asked. The downfall of that is if they have an injury, like an old football injury, and their knees all jacked up and then they turn around and tweak it haunting, you're going to be on hook for it. It sucks. It's just part of it. But it's better than getting sued. It's something that everyone needs, and maybe it's a bigger deal in Texas because we don't have to have it by law, which is crazy. But everybody else, I think you have to, and it's just the need to have things.

Darryl Plunkie: I've got a question then about the actors. There have been instances in the past where we've pushed actors farther than they had gone, some of them have mental stress, and some of them have physical stress. How do you get covered for that, get protected for that if you have an actor that's claustrophobic or has PTSD and you put them in a scene that affects them? 

Craig Watt: I'm trying to think if I've ever had a Work Comp claim on PTSD or anything like that. I don't think I've ever had one. I mean, I get all the fraud ones and I get the real ones. I've had people die, and I've had people blow up. 

Brian Foreman: If you filter some of that during interviews and is that liable? Because you can't really ask them questions about their medical conditions and stuff, right? 

Craig Watt: Yeah, yeah. So, this is probably a good talk for the future. I got a guy that probably would be good at doing this. He's an HR guy that I deal with. You got to be careful. I mean, we are a business, and when you do interviews, there's rules on interviews. I know with acting you can be kind of descriptive on your actors. But you can't ask. 

So, I had a pregnant lady come through with her husband, he was a pro actor, and she's done some acting. She was pregnant and she wanted to work in the haunt and I'm sitting here going, "what the hell am I going to do with this?" I needed a voodoo priestess, and she was like the perfect African American female. Perfect for it, but she's pregnant. I'm like, "how am I going to work with this?" So, it's like, OK, I can adapt if she wants to do it. I've an upstairs part, I could put it up there, but you can't go ask, "Hey, are you pregnant?" Or you can't ask "do you have mental problems?" You really can't do any of that. You'll get sued, and that's a whole other insurance policy for that one, being a bad employer, which most of us probably are. I don't know, there may be some coverage under Work Comp for mental breakdown stuff, I don't know. I honestly don't know, I have to get back to you on that. I can't think of anybody I've ever had that happened to, because usually, they need time at home or whatever, you let them go home and cool their jets or whatever. 

Darryl Plunkie: Because we find that putting actors in a low-lit room, in a costume and a mask, and facing other people is the best way to come up with their social anxiety. 

Craig Watt: Oh, yeah.

Darryl Plunkie: It highlights them. Ones they didn't know that they had, chances is, it's usually the owner that has the breakdown, staff members too. 

Brian Foreman: Oh, that's where we stop. To hear the rest of this interview, to get the video, and to get all of our cool Masterminds, Master Classes, and monthly meetings, go on over to and sign up to be a Haunt Master Member.

Craig WattProfile Photo

Craig Watt

Owner of Terror Isle

Craig Watt is a rare combination of a seasoned insurance agent and a professional haunter at Terror Isle in Texas City

Brian ForemanProfile Photo

Brian Foreman

Founder of Haunter's Toolbox

Owner and/or co-owner of HaunTopic Radio Podcast, ScareIt Badges, Dead Factory Haunted House, Haunter's Toolbox, and Scary Visions, Brian wears many hats and excels at all of them.