Starting a bounce house business: the insurance checklist

Most people start a bounce house business the same way: one castle bought for a kid's birthday, a neighbor asks to borrow it, then another neighbor offers to pay. Somewhere in there it becomes a business, and that's the moment insurance stops being optional in practice, even in states where it's optional on paper.

This checklist is in the order we'd do things if we were starting from a garage with two units and a utility trailer.

1. Find out whether your state regulates inflatables

Do this before you buy anything else. Rules range from nothing at the state level to a full permit system.

• Texas treats bounce houses as amusement rides. You need at least $1 million per occurrence in liability, a yearly inspection by your insurer, and a TDI filing at $40 per ride before you operate. See the Texas guide.
• Florida's ride law exempts "inflatable rides" by name, so no state permit, but cities and parks set their own rules. See the Florida guide.
• Other states fall in between. Our requirements page has a state-by-state table with links to each regulator.

Check your city too. Some fire departments issue their own permits for inflatables open to the public. The City of Victoria, Texas, for example, requires a fire marshal "operational permit" when an inflatable "is accessible to the public," on top of the state sticker (Victoria requirements).

2. Buy commercial-grade units, and keep their paperwork

Insurers and inspectors care about what you're renting. The industry standard is ASTM F2374, the Standard Practice for Design, Manufacture, Operation, and Maintenance of Inflatable Amusement Devices (current edition F2374-24). Its scope covers devices "made of flexible fabric, inflated by one or more blowers," and lists "rental companies" among the users it applies to.

It's also showing up in local law. ASTM announced that the 2024 International Fire Code would require inflatable amusement devices to be "designed, anchored, operated and maintained in accordance with the manufacturer's instructions and the requirements of ASTM F2374." Whether that applies where you work depends on which fire code edition your city has adopted.

Practical steps:

• Buy from manufacturers who state their units are built to F2374 and who include an owner's manual and anchoring instructions.
• Photograph every serial number tag. Texas requires your policy to list rides by name and serial number, and a claim adjuster anywhere will ask.
• Keep the manual for each unit. CPSC recommends rental companies give renters "a copy of the operation manual" with each rental (CPSC safety bulletin).
• Be careful with used units bought online. A unit without its manual, serial tag or anchoring instructions is harder to insure and harder to get through inspection.

A residential backyard bouncer from a big-box store isn't a commercial unit. CPSC's bulletin treats residential and commercial inflatables as separate categories with separate guidance.

3. Get liability insurance before the first paid booking

This is the one you can't skip. The policy needs to cover bodily injury to participants on the inflatables, not only bystanders. Our coverage page explains the amusement device exclusion and why a generic small-business policy may not do it.

What to expect as a new operator:

• It's an annual policy. Kelly Insurance Group says the carriers it works with "don't write short-term coverage for inflatable-related businesses" (startup page).
• It costs more than you'd guess. Kelly puts startups under $50,000 in revenue at "$3,500 to $4,000" a year for liability, with a $100,000 per-claimant sublimit. Pro Insurance Group's cost guide says new operators pay "$4,500 to $7,500" for a fuller program.
• Having no history counts against you. Brokers price heavily on loss runs, and a new business has none. After two or three clean years, shop it again.

Our cost page compares every published figure we found.

If this feels expensive for two castles, you're not wrong. But a single serious injury claim without coverage can cost more than everything the business owns, and the parks and schools you'll want as customers ask for a certificate before you set up.

4. Add the other policies as you grow

You don't need everything on day one. Here's when each one comes in:

Coverage	Start when
General liability (participant-inclusive)	Before your first paid rental
Commercial auto	When a vehicle is used mainly for the business, or titled to it. III says a vehicle "used primarily in business" likely has no coverage under a personal auto policy (III)
Inland marine (equipment)	When losing a unit would hurt. Kelly says it starts "around $1,100" a year and that most operators reach the break-even "somewhere between three and six inflatables"
Workers' comp	When you hire. Rules vary: Florida's threshold for most businesses is four employees (s. 440.02); Texas lets most private employers opt out (TDI)
Participant accident	When you take school, church or big community events. See participant accident
Umbrella	When contracts ask for more than your liability limits

5. Write a rental agreement and a participant waiver

Insurance pays claims. Your paperwork decides how many claims you get and how defensible they are.

Your rental agreement should cover, at minimum: who is responsible for supervising, the maximum number and size of riders, no shoes, no flips, no mixing toddlers with big kids, what to do if wind picks up or it starts raining, who's allowed to move the blower, and what happens if the unit is damaged. CPSC's bulletin is a good source for the safety rules, and it recommends that rental companies get "a written statement signed by the renter documenting that he has received and understands all applicable installation and operating procedures."

A participant waiver is a separate document signed by (or for) the people using the unit. Kelly Insurance Group calls it "The single most important item" on its pre-application list and says it "should be stored digitally forever." Insurers ask to see it when you apply.

Two cautions. A waiver doesn't replace insurance. And whether a court enforces a waiver, especially one a parent signs for a child, depends on your state's law, so pay a local attorney to write or review yours once. It's the cheapest legal bill you'll ever pay in this business.

6. Put your setup and wind rules in writing

Underwriters want to see them, and they're your best evidence after an incident. Kelly Insurance Group says that without "a written wind-threshold policy and inclement weather shutdown protocol, carriers assume one doesn't exist," and that "Missing or expired inspections are a near-automatic decline."

Your written procedures should include:

• Anchoring: use every anchor point, per the manufacturer. CPSC says to "use every anchor point, every time the ride is set up" when there are no manufacturer instructions, and never to anchor to a vehicle or trailer.
• Wind: the manufacturer's limit for each unit. CPSC says manufacturer limits run "from 15 to 25 mph," and above 25 mph "it is dangerous to operate any inflatable ride."
• Staffing: CPSC recommends at least two operators on a slide over 15 feet and one on a bounce house or small slide, with "a direct line of sight for all riders."
• Daily inspection: a checklist you fill out before each setup. Texas publishes one (Form AR-300) on TDI's forms page.
• Photos: every setup, every anchor.

7. Get trained

Formal training is cheap next to a claim. SIOTO runs inflatable safety courses and says on its site that its certifications are "Preferred by insurance providers." Ask your broker whether your carrier gives a credit for it. Even if it doesn't, a training certificate on file looks good to the next underwriter and the next park office.

8. Set up certificates before you need one

Your first park booking will come with a certificate request and a deadline, sometimes 14 to 30 days out. Ask your agent at purchase for blanket additional insured, primary and non-contributory, and waiver of subrogation endorsements, so every certificate after that is a same-day email. The additional insured guide has examples from real city and school requirements.

Printable checklist

• Checked state and city rules for inflatables
• Commercial-grade units, serial numbers photographed, manuals saved
• Annual general liability that covers participants
• Commercial auto if the vehicle is mainly for the business
• Rental agreement and participant waiver, reviewed by a local attorney
• Written anchoring, wind and inspection procedures
• Training certificate on file
• Blanket additional insured endorsement for same-day certificates