Disney, Carnival Face Higher Insurance Costs
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Walt Disney Co.’s theme parks, Carnival Corp.’s cruise lines and other businesses that host thousands of tourists are facing higher insurance costs because of last year’s terrorist attacks.
Miami-based Carnival, the world’s largest cruise operator, said last month in a filing with the Securities and Exchange Commission that it may have trouble obtaining adequate levels of insurance coverage. Theme park operator Six Flags Inc. said last week that its insurance expense will rise 40% this year.
The higher costs come as companies such as Disney are trying to climb out of a sales slump. U.S. consumers cut back on travel last year because of the economic recession and fears of flying after the Sept. 11 hijackings.
The average theme-park operator spends about 4% to 5% of its revenue on insurance premiums, said Dennis Speigel, president of International Theme Park Services Inc., a consulting firm.
Insurance premiums at Cedar Fair, an owner of six theme parks including Knott’s Berry Farm near Los Angeles, will rise by more than 10% this year, spokesman Brian Witherow said.
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