from experience i would appoint family member to stand by castle for the few hours kids are there (handy for helping with shoes etc anyway), rental company I use do have their own cover but was limited to an accident arising from a fault caused by company not covering horseplay etc which is fair enough.
Just on a side note, I always get parents to leave a contact number for each kid on a sheet with all the kids names listed etc and any issues, my kid has friend who's diabetic and once from all seven eight year olds in bathroom all checking the girls bloods and all having a panic when found they were low......thankfully never had to ring any parent but very handy to have contact number for each child anyway.
Good luck with the party, rope in as many adults as you can and I find three hours was toooo long, have plenty of things planned.........