The velocities would make sense for paintball but that's weird.... They include joule ratings too unless that's your math that you added. See if you can talk to the underwriter again and make mention that the standard industry practice for paintball includes higher muzzle energies which is what the math/physics should be based on.
Take a standard .68 cal paintball which based on the MCarterBrown webpage here
weights 3.0 grams. At 290 FPS and 3.0 grams you're getting energies of 11 JOULES (which does dissipate some when the ball breaks). But it still stands, 1.6 Joules is more or less a decent outdoor field limit. I'd say for indoor 1.2 Joules (360 FPS on .20's) is a good limit if you can swing it by the underwriter, if it'll lower your premiums to go down to 1.0 Joules (330 on .20's like in Japan) you should consider it, and for outdoor 1.5 Joules (~400 FPS on .20's) is more or less standard outside of Alberta.
It's honestly all about the risk the underwriter and actuary is willing to take on you and decides to go forward or not. Do you have previous experience running something similar (say 5 years experience as a manager of a laser tag arena) or are you "some random" that they want to scare off with the premiums?