When agent Tami Towne of Nebraska-based Ryder Rosacker McCue & Huston Insurance Services went prospecting for new business 10 years ago, she had no idea it would lead her to become a specialist in the niche market of fireworks and pyrotechnics insurance, and she certainly didn’t expect it would also lead her family to own a fireworks stand side business.
“We bought our [fireworks] business from the client who got me into this part of the insurance business,” says Towne. “It really is a small world.”
Ryder Rosacker McCue & Huston has been writing this class through an exclusive with Scottsdale Insurance since Towne approached the carrier to work with them back in 2003. The agency can cover just about anything to do with fireworks or pyrotechnics, from manufacturing of fireworks, equipment, display racks, firing equipment, firework companies, wholesalers, and retailers to single event display shows or companies that put on display shows year round.
Towne says she rarely sees requests for coverage limits over $10 or $12 million and coverage for display companies or retailers is always written on a surplus lines basis. Coverage usually includes liability along with property, auto, workers comp and sometimes cargo, but there is no “typical” firework program because coverage requirements greatly vary by state, county, and city. There are also regulations from the Department of Alcohol, Tobacco and Firearms (ATF), state and federal Department’s of Transportation, and the Consumer Product Safety Commission, to name a few.
Most states also require that you have to be a licensed pyrotechnician to put on a display show, depending on the grade of fireworks.
“It is a very regulated industry with a lot of government entities involved and every single event and every situation is different,” says Towne.
States that are hit hardest by weather issues such as wind have the most property claims but, surprisingly, Towne says the loss ratio is actually very good for this class because they are so regulated and follow strict safety practices. Companies must also have strict guidelines in place for their firework supplies including storage, transportation, and retailing.
“The ATF can come in at any given point and do an inspection of a retailer and if one thing is wrong they will get a fine,” she says.
Towne says the terrorist attacks on Sept. 11, 2001 were the catalyst for some of the regulations because anything to do with hazardous materials became much more restrictive and regulated.
She says Ryder Rosacker McCue & Huston Insurance Services are one of a handful of agencies in the nation that work with this class because of how complicated and time-consuming it can be.
“You have to be dedicated to understanding what their needs are and you have to be available,” she says. “Firework display shows do not happen from 8:00 a.m. to 5:00 p.m. and there could be an issue or a last minute question from the city that can’t be solved during normal business hours.”
That also means a lot of time spent at the office during the month of June, Towne says, with on or around the Fourth of July being the busiest firework time of the year, followed by New Year’s Eve. However, many firework display companies do operate year round with shows at sporting events, racecar tracks, or theme parks. Firework retail stands can also operate from Memorial Day through Labor Day, depending on the city and state regulations
Some municipalities that put on fireworks shows around the Fourth of July were doing smaller displays to save money during the economic downturn, but Towne says that doesn’t seem to be the case now, according to what she hears from her display company clients.
Ryder Rosacker McCue & Huston Insurance Services is also a member of the National Fireworks Association, one of several organizations people in the fireworks industry can belong to in order to stay on top of all the regulations or find out how to become a certified pyrotechnician. There are also annual conventions and shows held for those in the firework industry.
Despite the danger, intense regulations, and stigma associated with the pyrotechnic/firework display class, Towne says it is actually a supportive community to be a part of as an agent and business owner.
“This is a pretty close knit industry and I would say that everyone helps each other out 11 months of the year, and one month of the year you are competitors,” she says. “We have found a lot of friends in it.”