The Pickleball Explosion Comes with Opportunity, Challenges

If the insurance industry hasn’t noticed, the sport known as pickleball is exploding across the country.

In the last three years, the number of players has jumped by more than 40%, by some measures. In Minnesota, some 600 courts are slated to be built by the end of 2023, according to news reports. In Florida, more than 15 indoor clubs, replete with air conditioning, cafes, locker rooms, video training and other amenities are planned or are under construction.

The growth brings new opportunities but some tricky challenges for carriers, insurance agents and property developers.

The sport, which is something like tennis but with smaller courts, more players and less running around, is still so new that some insurance carriers are leery. Major international insurers, such as Chubb, which often write high-end properties and tennis clubs, won’t touch it, said Shawn Munns, an insurance agent who helped Florida-based The Pickleball Club secure liability, workers’ compensation and construction coverage on some clubs while they’re being built in Florida.

Even with the issues that may stem from the sport’s phenomenal growth nationwide, pickleball has attracted at least a few carriers and agents.

“There are ways to do it correctly,” said Brett Pollak, president of Insurance Allies, a Chicago-based agency that specializes in the entertainment industry and includes Pickleballinsurance.com.

Pollak is familiar with rapidly growing, potentially injurious activities that need insurance. He said his team started as one of the first to write coverage for axe-throwing clubs (which often mix alcohol sales with hurling axes at targets). The axe clubs have grown just as quickly as pickleball sites in the United States.

He pointed out that pickleball insurance has an extra dimension: Thousands of camps, instructors and tournaments now need liability coverage — but not much. That keeps premiums low but makes it harder to find agents who want to service the policies.

And, of course, there’s property and liability insurance for the stand-alone pickleball clubs that are springing up across the land. The clubs need a lot of space and some special endorsements. With more than 5,000 square feet of indoor area, plus liquor liability for clubs that serve alcohol, along with other bells and whistles, premiums can be enormous for some of the clubs, Pollak said.

It can come as a surprise to developers and owners.

“From an insurance standpoint, the biggest thing, in my opinion, is controlling the alcohol around it, controlling the alcohol use before and after participation,” he noted.

He declined to name the carriers that will write the clubs but said, “It can be done in a cost-effective manner.”

In some places, like Florida, though, “it’s tougher to get companies that want to provide proper policies.”

Munns, who is with CoWest of the Rockies Insurance Group, based in Denver, noted that “pickleball is less strenuous and less risky than tennis, but it has an older age group that plays it, so a lot of carriers have shied away from it.”

Despite the caveats, the concept of all-inclusive pickleball complexes has proven so popular that Munns became an investor in the clubs in Florida. The developers, including co-founder Matt Gordon, are set to spend $180 million over the next few years to build the clubs. And despite two recent hurricanes in Florida and concerns from other property developers that soaring premiums in the state are proving too much for some south Florida projects, Gordon’s team seems unfazed.

“We’re building to Miami-Dade standards, so it would take a Cat 4+ direct hit to really cause us some harm,” Gordon told Insurance Journal. “I’m sure our friendly insurance carriers will use the storms as an opportunity to increase rates. They always do.”

The real sticker shock on property insurance premiums may come once the clubs are completed. “Property coverage is going to skyrocket for them now and will be tougher to write. But general liability will stay the same as that risk has not increased at all,” Munns said after Hurricanes Ian and Nicole plowed through parts of Florida in late September and early November.

“Florida is significantly more expensive than anywhere else in the country,” Pollak added.

Gordon, an attorney and investment banker, teamed up with commercial real estate investors and entrepreneurs Brian and Valerie McCarthy of Sarasota to launch the ambitious pickleball club plans. Brian McCarthy, a former U.S. Navy rear admiral, and Valerie McCarthy were instrumental in creating one of Florida’s first pickleball academies, more than two years ago in Sarasota, according to news reports. The Pickleball Club has more than 47 shareholders, it said in a September news release.

Gordon said when the team initially tried to find liability and other insurance for the clubs, from Florida and regional insurers, the cost was staggering. He had previously worked with Munns on other projects and finally reached out to him and CoWest. Through a number of carriers, Munns was eventually able to find coverage at about 70% of the cost that some insurers had quoted to Gordon.

“It did take quite a while to find a carrier,” Munns said. One of the planned clubs also needs flood insurance, he noted.

The first of The Pickleball Clubs is being built in Lakewood Ranch, northeast of Sarasota. When completed, it will offer 12 indoor courts, two outdoor courts, a shop, a dining facility and food trucks. Another is planned in nearby Bonita Springs, with 14 courts. Other sites are planned for Port St. Lucie, Fort Myers and other parts of the state.

As storms and rainfall are predicted to increase, along with soaring temperatures in Florida, the word “indoor” is key to the clubs’ success, Gordon said.

“Climate change has not hurt our business model,” he noted.

Pickleball has been around since the 1960s, according to the International Federation of Pickelball. But only in the last decade or so has it gone viral. An estimated 5 million people now play the sport — up 50% in the last three years. Three new venues are opening every day in the United States, the Washington Post reported.

The largest age demographic is 65 and older, but the 35 to 44 age group is close behind, the Sports and Fitness Industry Association told the Post.

The phenomenal growth of facilities and courts has led to some friction with diehard tennis players, who argue that picklers are taking over their spaces.

Tennis courts can be easily converted to pickleball, but the new stripes can make it difficult for tennis players, some have said.

Despite that, the less-strenuous but still high-aerobic pickleball appears to be the future, fans say.

“Pickleball is the fastest growing sport nationwide with no signs of slowing down,” said Gordon. “We plan on being the market leader during this all-important land-grab phase of the industry, given the tremendous demand for indoor court space.”