Managing and Insuring Your Event Risks

Phil Cromer

Risk & Safety Services Manager

Municipal Association of South Carolina

Types of Special Events

• Parades• Cultural programs• Festivals/Celebrations• Musical concerts• Community activities• Athletic events

- Any activity where large numbers of persons gather

- Activities for which licenses and permits are required

• Block parties• Social events• Religious gatherings• First Amendment

Rights activities• Political events

Who Are The Players?

• City/Town– Dept./Director/Staff– City-sponsored

committee

• Non-Profit

• Chamber of Commerce/Business

• Other Third Parties– Civic/service

organizations– Charities– Promoters– Private/individual– Social/fraternal– School– Religious– Political

Determine Entity’s Role / Involvement

• Entity manages event

• Entity sponsors the event

• Organization works on behalf of the entity

• Entity provides property/facilities/

equipment

Special Events = Special Exposures

• Organizations outside of the entity

• Short term exposures

• Hazardous activities (entity has little or no experience)

• Insurance issues– Potential for uninsured

losses• Reputation damage• Stress on city services• Disruption of regular

operations

• Temporary set up and location

• Road/street closures

• Crowds of people

• Impact on non-participating citizens and businesses

Most Frequently Cited Risk Factors of Special Event Organizers

• Sale and consumption of alcohol

• Size of the crowd

• Threat of over-capacity crowds

• Inexperienced organizers

• Poor communication among interested parties

• Inexperienced security

• Dangerous or hazardous activity

• Weather conditions

• Lack of an evacuation plan

• Free and uncontrolled admission

Specific Types of Exposures

• Liability – Premises (including sidewalks,

streets, parking lots, grassy areas, trees, etc.)

– Civil Rights– ADA

• Injuries (fatal/non-fatal)

• Security issues

• Alcohol-related incidents

• Crowd/traffic control

• Fireworks

• Permitting

• Loss of Income

• Planning and setup of event

• Volunteers

• Amusement rides

• Weather issues

• Parades

• Animals

• Other exposures: candy, food, baseball, X-Games

• Reputation

• Terrorism

 Boy breaks leg in parade mishapPublished Tuesday, December 08, 2009 8:34 AM                                                                  By Dan BrownBerkeley Independent

“This is not the first accident involving the Moncks Corner Christmas Parade. Several years ago a child ran into parade traffic to retrieve candy thrown from a parade float and was struck by a vehicle. Since that incident parade policy prohibits the throwing of candy from parade floats. “

Who is to blame?

Event Organizer / Sponsor / Host

S.C. Statutes • South Carolina Tort Claims Act

• Outlines immunities for governmental entities• Provides caps on damages

• South Carolina Recreational Use Statute• Provides a gross negligence standard for land

utilized for recreational purposes without charge

• S.C. Amusement Rides Safety Code• Requires sponsor of a fair or carnival or owner of

the land where located to make a visual inspection of each amusement device at least once each week during period of operation

Strategies for Success

(1) Identify and Analyze the Risks

– Adopt a special events policy

– Develop an application process to gather info

– Comprehensive planning and review• Activities/unique characteristics/related events• Location/resources/regulations & requirements• Target audience/special needs/staff & volunteers• Management/emergency response/security• History/weather/perils

Special Events Policy

Provides guidance for managing and regulating events on municipal property

Purpose: (1) to protect the health, safety, and property of participants and attendees; (2) lessen impact of event on non-participating citizens and businesses; (3) ensure appropriate parties bear the costs of the event, and (4) lessen the burden on the municipality and its operations

Policy should outline:– Role of the entity (municipality)– What types of events are permitted– Where these events are permitted– How the entity’s name may be used to promote events– What coverage and limits of insurance are required– What services will be provided/required– What fees are applicable

Special Event Application

Outside parties should be required to complete a special event application.

The application must be comprehensive so that all pertinent information is gathered.

The applicant should specify any service, material, or property that is expected to be provided by the entity.

Strategies for Success

(2)Develop Risk Controls

– Ensure compliance with applicable laws, regulations, contractual obligations, and industry standards

– Written plans should be developed for critical areas:

• Health / safety• Participant behavior / crowd control• Security• Parking and traffic

Site Evaluations

Identify potential hazards and develop methods to control

Establish emergency and evacuation plans

Train all staff and volunteers in evacuation procedures

Develop contingency plans to deal with emergencies or weather changes

Make sure facilities are accessible to persons with disabilities

Property Maintenance

Entities can be held liable for injuries arising out of property that is poorly maintained or in disrepair.

Abate known hazards on property owned and maintained by the entity prior to the event.

Trash control

Medical Services

Staffed by trained personnel

Sufficient transportation

Coordination with police and fire officials

Determine access and egress routes for facility

Designate a spokesperson for dealing with the media to address good or bad outcomes

Crowd Management

Different approaches depending on the size of the event – arts & crafts festival vs. rock concert.

If serving alcohol, it helps to have a secure area

Temporary seating should be installed by a professional.

Well placed signs identifying key areas- first aid / restrooms/ exits

Security

Event securityPersonnel neededTraining requiredMaps of facility or event areaCommunication proceduresTransportationHandling of adverse behavior of crowds or individualsInformation boothCoordination with local authorities

Strategies for Success

(3) Select Risk Financing Strategies

Purpose –To transfer the responsibility for paying losses to the external or outside hosting entity(s) or parties.

– Two options or methods of risk financing:• Insurance• Contractual transfer

– Hold harmless and indemnity agreements– Lease provisions

Build Moats of Protection Around Your Entity

• Certificate of Insurance

• Additional Insured Status

• Hold Harmless Agreements

• Indemnity Agreements

Insurance

• Purchasing insurance is one way of transferring some financial aspects of risk to another organization (insurer) in exchange for a premium. Insurance, however, is not a substitute for a commitment to managing risk. Preventing harm to persons served by your organization as well as protecting the organization’s assets and reputation is the purpose of risk management.

• Managing your risks is a cheap and effective insurance policy.

Insurance

Request certificates and additional insured endorsements from all parties involved.

General Liability, Automobile Liability (as needed), and Workers’ Compensation and Employer’s Liability (if appropriate) should be required for businesses and organizations participating in the event.

Sample Insurance Requirements

TYPE Coverage Limits (Minimum)

GENERAL LIABILITY Bodily injury, property damage and contractual liability from their “work”

$1 Million / occurrence

AUTOMOBILE LIABILITY

(AS NEEDED)

Injury and damage from their operation of autos

$1 Million combined single limit per accident

WORKERS’ COMP & EMPLOYER’S

LIABILITY(AS APPROPRIATE)

Work related injury or illness for their employees

Statutory and $1 Million per illness and injury

Insurance

Have proof of additional insured status through a certificate of insurance policy endorsement or broker confirmation letter. Policy should be primary to any coverage by the public entity

and the public entity’s coverage will not contribute.

Request a certified copy of the policy and review it, particularly the exclusions.

Ensure that outside parties provide entity with hold harmless/indemnification and defense agreement in favor of the entity.

Insurance Certificates of insurance may not always be

practical for all participants- Artists and craftsmen- Hobbyists

REQUIRE certificates of insurance from all food/beverage vendors, entertainer promoters, or race coordinators

If entity-sponsored, check your insurance coverage document for exclusions to coverage (bungee jumping, amusement rides, etc.) Consider purchasing Special Events coverage for entity-sponsored events

Special Exposures

Entertainers/Concert promoters Equipment suppliers

- Mobile bleachers- Stages- Decorations

Vendors- Food- Alcohol

Private security or other services

Legal counsel should be involved in preparation and review of all contracts!

Private Use of Public Facilities

• Establish what types of groups and activities will and will not be allowed to use public facilities

• Be careful not to use criteria that could be viewed as illegally discriminatory• Consult legal counsel when setting terms of use

• Have a formal permit procedure process• Information about the group, event, and name of contact person• A fee schedule (if applicable) should be part of permit

• Rules and regulations• Have in writing and furnish to user’s representative at time of permit

application• Have representative sign acknowledgement of receipt and understanding

• Insurance requirements• Establish insurance requirements, including requirements for

certificates of insurance and hold harmless agreements• TULIP Program

• Security• Ensure buildings and grounds are secure • Inspect for hazards

What Events Are Covered Under My Liability Insurance Policy?

Most liability policies do not contain a general exclusion for special events. Coverage will apply to city activities associated with a special event unless that particular activity is itself excluded. Keep in mind that there are

exclusions for several kinds of activities often associated with special events or community

celebrations.

ImportantCheck your liability coverage document

for exclusions!!!

Typical Special Event Exclusions

• Aircraft, Helicopter, Ballooning Rides• Aircraft, Helicopter, Ballooning Shows

Typical Special Event Exclusions

• Archery

• Lifeguard operations

(Contracted)

Typical Special Event Exclusions

• Automobile, motorcycle, watercraft, aircraft racing or stunting

Typical Special Event Exclusions

• Bungee jumping of any description

Typical Special Event Exclusions

• Skateboarding

Typical Special Event Exclusions

• Firework displays

Typical Special Event Exclusions

• Parachuting or Hang gliding

Typical Special Event Exclusions

• Concerts organized and promoted by outside parties

Typical Special Event Exclusions

• Rodeos

Typical Special Event Exclusions

• Trampolines and rebounding equipment (including inflatable devices)

Typical Special Event Exclusions

• Traveling carnivals, circuses

Typical Special Event Exclusions

• Temporary mechanical amusement devices

Typical Special Event Exclusions

• Waterslides over 10 Feet (contracted only)

Two basic ways to handle the liability exposure associated with excluded

activities:

1. Purchase special event coverage from an insurer who specializes in that type of risk

2. Hire an independent contractor to conduct that particular operation

• Hold harmless and indemnity agreement needed• Require appropriate types and limits of coverage• Have city named as “Additional Insured” on

policy

*Remember to obtain copy of their insurance

policy to insure the activity is covered and not excluded!

Waivers or Pre-Event Releases

The voluntary and intentional relinquishment of a known right, claim or privilege.

Advise and/or enhance a participant’s assumption of the specific risks involved with the event in which they are participating.

Lawsuits arising out of these events can be better defended when waivers/pre-event releases are used.

Not a strong defense in a court of law.

Contract the Event

To an independent party such as an event coordinator or contractor.CAUTION: Too much control over the independent

contractor can spoil the independent relationship.

Agree upon goals but do not retain the power to control specific details of the work.

Conclusion

Special events must be carefully managed so that the safety and health of the participants is paramount, the protection of public property is considered, and the impact on non-participating citizens is minimized.

Departments within the locality must work together to ensure a safe event and to eliminate liabilities arising out special events.

Proper guidance and risk control procedures can reduce the likelihood, as well as the severity, of incidents that may occur.