Managing & insuring your event risks
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The document discusses strategies for municipalities to manage risks associated with special events, including developing policies and applications to understand event details, implementing controls like security and medical plans, and using insurance, hold harmless agreements, and contracting to transfer liability to event organizers. It provides an overview of common event exposures, risk factors to consider, and insurance requirements to protect the municipality.
Managing & insuring your event risks
- 1. Managing and Insuring Your Event Risks Phil Cromer Risk & Safety Services Manager Municipal Association of South Carolina
- 2. Types of Special Events • Parades • Block parties • Cultural programs • Social events • Festivals/Celebrations • Religious gatherings • Musical concerts • First Amendment • Community activities Rights activities • Athletic events • Political events - Any activity where large numbers of persons gather - Activities for which licenses and permits are required
- 3. Who Are The Players? • City/Town • Other Third Parties – Dept./Director/Staff – Civic/service – City-sponsored organizations committee – Charities – Promoters • Non-Profit – Private/individual • Chamber of – Social/fraternal Commerce/Business – School – Religious – Political
- 4. Determine Entity’s Role / Involvement • Entity manages event • Entity sponsors the event • Organization works on behalf of the entity • Entity provides property/facilities/ equipment
- 5. Special Events = Special Exposures • Organizations outside • Temporary set up and of the entity location • Short term exposures • Road/street closures • Hazardous activities • Crowds of people (entity has little or no • Impact on non- experience) participating citizens • Insurance issues and businesses – Potential for uninsured losses • Reputation damage • Stress on city services • Disruption of regular operations
- 6. Most Frequently Cited Risk Factors of Special Event Organizers • Sale and consumption of • Inexperienced security alcohol • Dangerous or hazardous • Size of the crowd activity • Threat of over-capacity • Weather conditions crowds • Lack of an evacuation • Inexperienced organizers plan • Poor communication • Free and uncontrolled among interested parties admission
- 7. Specific Types of Exposures • Liability • Loss of Income – Premises (including sidewalks, streets, parking lots, grassy areas, • Planning and setup of event trees, etc.) – Civil Rights • Volunteers – ADA • Amusement rides • Injuries (fatal/non-fatal) • Weather issues • Security issues • Parades • Alcohol-related incidents • Animals • Crowd/traffic control • Other exposures: candy, • Fireworks food, baseball, X-Games • Permitting • Reputation • Terrorism
- 8. Boy breaks leg in parade mishap Published Tuesday, December 08, 2009 8:34 AM By Dan Brown Berkeley 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. “
- 9. Who is to blame?
- 11. 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
- 12. 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
- 13. 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
- 14. 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.
- 15. 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
- 16. 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
- 17. 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
- 18. 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
- 19. 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
- 20. Security Event security Personnel needed Training required Maps of facility or event area Communication procedures Transportation Handling of adverse behavior of crowds or individuals Information booth Coordination with local authorities
- 21. 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
- 22. Build Moats of Protection Around Your Entity • Certificate of Insurance • Additional Insured Status • Hold Harmless Agreements • Indemnity Agreements
- 23. 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.
- 24. 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.
- 25. Sample Insurance Requirements TYPE Coverage Limits (Minimum) GENERAL LIABILITY Bodily injury, property $1 Million / occurrence damage and contractual liability from their “work” AUTOMOBILE Injury and damage from $1 Million combined LIABILITY their operation of autos single limit per accident (AS NEEDED) WORKERS’ COMP & Work related injury or Statutory and $1 Million EMPLOYER’S illness for their per illness and injury LIABILITY employees (AS APPROPRIATE)
- 27. 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.
- 28. 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
- 29. 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!
- 30. 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
- 31. 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. Important Check your liability coverage document for exclusions!!!
- 32. Typical Special Event Exclusions • Aircraft, Helicopter, Ballooning Rides • Aircraft, Helicopter, Ballooning Shows
- 33. Typical Special Event Exclusions • Archery • Lifeguard operations (Contracted)
- 34. Typical Special Event Exclusions • Automobile, motorcycle, watercraft, aircraft racing or stunting
- 35. Typical Special Event Exclusions • Bungee jumping of any description
- 36. Typical Special Event Exclusions • Skateboarding
- 37. Typical Special Event Exclusions • Firework displays
- 38. Typical Special Event Exclusions • Parachuting or Hang gliding
- 39. Typical Special Event Exclusions • Concerts organized and promoted by outside parties
- 40. Typical Special Event Exclusions • Rodeos
- 41. Typical Special Event Exclusions • Trampolines and rebounding equipment (including inflatable devices)
- 42. Typical Special Event Exclusions • Traveling carnivals, circuses
- 43. Typical Special Event Exclusions • Temporary mechanical amusement devices
- 44. Typical Special Event Exclusions • Waterslides over 10 Feet (contracted only)
- 45. 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!
- 46. 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.
- 47. 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.
- 48. 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.
Editor's Notes
- #2: Special Event | A party, festival, reception or ceremony at which individuals congregate for the same cause.
- #3: First Amendment – “protected speech.” Restrictions can only address city interests (safety, preservation of city property, etc.).
- #4: Partner or supporting organizations.
- #5: WHO’S EVENT IS IT?City has primary responsibility for organizing and planning the overall event (city in control).As sponsor, city provides resources (money, personnel, equipment, etc.). If city is the sponsor but does not manage the event, this could be a source of potential liability.Sometimes more than one organization involved. What is the city’s relationship to these organizations? Are they working on behalf of the city? Is the event committee a separate and distinct organization or a city volunteer group?Does the event occur on city property/facilities but there is no other direct involvement of the city? If another organization is using the facilities, the city should have a permit process. Reasonable conditions related to public safety can be placed on the permit.
- #6: General issues. RISKS ARE ALWAYS PRESENT – be careful about “attitudes” (we’ve never been sued or that never happens).
- #8: Keep in mind that every event that occurs on public property has some level of liability for your entity. Need to establish insurance requirements (more later).Alcohol is a money-maker but be careful how handled.
- #10: Look at the facts. Who was in charge? Was the incident preventable/foreseeable?
- #12: Immunity under TCA for premises liability unless actual notice of an alleged defect or dangerous condition and entity does not take proper steps to remedy the condition.The NC Commissioner of Labor is required to inspect, and to certify the safety of, carnival rides and similar amusement devices.
- #13: EVENTS POSING A HIGH PROBABILTY OF LOSS SHOULD BE AVOIDED! Frequency/severity matrix.Documentation may help establish that the entity acted responsibly (and therefore is not liable).
- #15: “He who has the gold, makes the rules.”Application should be reviewed in a timely manner. Notify applicants of approval/denial in writing.
- #16: Industry standards or governing body standards.The importance of inspection, monitoring, reporting and correction procedures cannot be overstated to prevent statutory liability exposures.
- #17: Is the site or facility adequate for the activity and number of participants? Any safety or security issues? Is parking adequate?
- #18: Conduct an inspection of the property/site prior to and immediately following the event and document.
- #19: Liability exposure (negligence) may result from failure to foresee and properly plan for or respond to a medical emergency. Have a plan.
- #21: Have a security plan (event-specific) that is reviewed by local authorities. Use of PRIVATE SECURITY – no “Hell’s Angels”. Do reference check on company. Need contract and insurance.
- #23: All participants (parties to the event) should be insured and willing to provide evidence of general liability coverage. Most service clubs are insured by their parent or national organization.The event organization can be incorporated (independent status) and have their own insurance thereby avoiding dilution of the city’s insurance coverage.
- #26: Employers liability coverage protects employers from employment-related suits separate and distinct from claims for workers’ compensation benefits.
- #27: Common misconception – obtaining a COI protects the municipality against a loss that occurs. This not the case. A municipality does not receive any rights under the contractor’s (vendor’s) insurance policy with respect to a claim made directly against the certificate holder. (See top right box).Not a bad idea to request the insurance company’s financial rating from agent if company is unfamilair.
- #28: Hold harmless agreement – the transferee agrees to pay damages on behalf of (and defend) the city, who may become liable to pay damages (basically holds the city harmless from claims). Indemnity agreement – the transferee promises to reimburse the transferor (city) for losses the transferor has incurred and already paid.Additional insured endorsement – the strongest insurance protection a municipality can get from vendor/contractor. Gives the entity a direct relationship with the carrier (gives access to to policy for defense and settlement of a loss –same rights as insured).
- #30: If the special event features an entertainer, the usual public sector contracts do not apply. No entertainment contracts include indemnification for the entity. In fact, the entity must accept the risk as well as the liability for harm resulting from the special event. In addition, entertainment contracts often cover not only the main entertainer or group but also the crew, dressing rooms, and meals, as well as other key individuals and circumstances.No BYOB! HOST liquor liability coverage is limited – usually a private function – no charge for drinks.
- #31: Public facilities are often viewed as a community resource and outside groups or individuals may wish to use them for private functions.
- #45: Some waterslides may be part of a city swimming pool and may be covered.
- #47: Assumption of the specific risks associated with that activity is important. Waiver does not protect against liability from gross negligence. Minors – not legally binding or enforceable.