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Are You Covered?

Campus event planners need to know all they can about the risky business of special event insurance

By Jamise Liddell




In 1993, an Independence Day celebration at Wichita State University turned sour. In the middle of the campus-planned community event, two people were killed in a gang shootout. To add to the horror, the families of the victims named everyone involved in planning the event-the university, sponsors, and individuals on the planning committee-in an $2 million lawsuit.

Ultimately, Wichita State won the case. The judge ruled that the university had provided adequate security and that if a person was determined to kill someone, all the security in the world couldn't prevent it. But Lori Miller, now Wichita's director of special events and community relations, says the experience was a real eye-opener for the institution. "It raised everyone's awareness about insurance coverage and personal liability," she says.

If you're a campus events, activities, or conference planner, do you know to what extent-if at all-you and your institution are covered for risk? According to Cynthia Di Sano, director of university facilities at Southern Connecticut State University, only about 20 percent of event planners know anything about insurance and liability. If you're among the remaining 80 percent, read on to find out the basics of campus risk management-what's covered, what's not, and what types of policies you need.

Take cover

The coverage you need for an event depends partially on who is hosting it. This usually falls into one of three basic categories, Di Sano says: institutional, outside-sponsor, and co-sponsor. Here's what's included in each category:

  • Institutional events are those hosted solely by the college, university, or school, such as employee retirement dinners and presidential galas. The campus is responsible for insuring such events.
  • Outside events are those held on campus by an outside party. Such events might include concerts, conferences, and trade shows. Since the outside parties are using private- or state-funded facilities, they need to sign a contract with the institution that
  • states what the institution is and is not liable for,
  • specifies possible risk areas in the facility in which the event will be held,
  • lists any fees for using the facility, and
  • verifies that the outside organization has its own insurance policy that names the education institution as an additional insured party.

    CarolAnn Paul, director of conference services at Wheaton College, knows the value of such contracts. Two years ago, at a conference conducted on campus but not sponsored by the college, a child fell while rollerblading and suffered a severe broken arm. His family was visiting from overseas, and they had no relevant health insurance to cover the steep hospital bills.

    "When they approached the college to pay the bills, I was very grateful for our liability insurance policy," Paul says, which requires all groups who lease campus facilities to have liability insurance naming Wheaton as an additional insured. "Though of course we were concerned for the child, we were not liable for the hospital costs and successfully referred the parents back to the conference's host organization," Paul says.

  • Co-sponsored events are those hosted by the university but endorsed, or sponsored, by an outside party. For example, your campus might provide its soccer field for the annual picnic of a local Boy Scout or Girl Scout troop.

    However, "Just because someone from the campus agrees to co-sponsor an event with an a nonuniversity group, it does not mean that the outside group is covered by university insurance," Di Sano says. So apply the same rules here that you would for outside groups: Make sure the other group has its own liability insurance that names your institution as one of the covered parties.

The basics

Because every state has its own set of rules regarding insurance coverage, special-events planners should research the different types of insurance available to them and their institutions. Often, someone on campus already has this information. If your institution doesn't have a risk management office, check with your legal counsel, other administrators, and even the campus ceo.

If you still come up blank, you'll have to go to your state's risk management office to find out your institution's rights. Make sure to also look out for yourself.

Winnie Glas, director of the events office at the University of California-Los Angeles, cautions planners to protect themselves from personal liability. "Look into acquiring personal umbrella liability insurance that would cover you for potential on-the-job liability," she says. She suggests buying a policy that is worth no more than your personal net worth.

Once you're personally covered, start looking into policies for your institution. Every campus must have some form of general liability insurance, which gives the institution protection against bodily injury and property damage claims. Most insurers agree that an average institution should have a minimum $1 million liability policy. You'll want more coverage if your event plans include something that carries extra risk, such as carnival rides or sporting events. Although rates vary by city, a $1 million policy will cost your institution from $150 to $300 per year.

Alcohol on campus

There's an extra liability risk at any campus event where you're serving or selling liquor. If you have an alcohol policy on campus, get to know it well. If you don't, make drafting one a top priority.

When researching your campus alcohol rules and regulations, find out what types of policies and waivers you have. Specifically, make sure you know the difference between selling alcohol and giving it away.

If you are dispensing alcohol at your event for free-an open bar, for example-make sure that your general liability policy includes social host liquor liability. This states that your institution is not in the business of selling or distributing alcohol and protects you from related lawsuits. If you are serving and selling-say you have a cash bar-you need a separate liquor liability policy. However, if you've hired a caterer to serve and sell the alcohol, it should have a liquor liability policy that names your campus as an insured.

To further protect yourself, always designate an official "alcohol monitor" at any event where you're serving liquor. This person-be it the event planner, bartender, or other campus staffer-should keep an eye on guests who are drinking and ensure that you stop serving those who have had too much.

Some institutions, especially smaller ones, may want to deal with alcohol liability coverage on a case-by-case basis. At Montserrat College of Art, a private institution of 360 students, event planners add the college to the event caterer's liability policy at a cost of $2 per attendee.

Everything under the sun

In addition to general liability and liquor liability insurance, there are policies available to cover just about any situation you can imagine. While some of them may sound frivolous, the bottom line is: If you have a lot of money, you can insure everything. If you don't, it can be a gamble.

Kim Zanti found this out the hard way while planning the 7th Annual Route 66 Celebration, the largest fund raiser for the Main Street Flagstaff Foundation in Arizona. Zanti, the nonprofit's events and promotions director, consulted with almanacs and meteorologists to make a prediction for weather conditions the weekend of the outdoor event. Based on that information, she purchased $38,000 worth of rain coverage for $1,000-a real stretch on her budget.

When the event weekend arrived, both Friday and Saturday night were plagued with unseasonably cold temperatures-but no rain-sending attendees scampering to their warm homes. Though disappointed, Zanti and her team were optimistic that they wouldrecoup their losses on Sunday. They had already sold 400 tickets for a concert by the Kingston Trio and expected that number to double by show time.

But on Sunday, 60-mile-an-hour winds greeted Zanti and her crew. The winds blew down signs, hospitality tents, and food vending stands. Arts and crafts vendors were chasing their products all over the field. But still, no rain. In all, attendance was down by at least half and the event lost more than $10,000, none of which was covered under the rain insurance.

Zanti's story is not unusual. Like many nonprofit event planners, she bought insurance based on her best predictions and her budget, but she needed more. Next year, Zanti says, she will look for an insurance package that covers all of the possible adverse weather conditions-rain, wind, snow, and more-that could vex her event.

Choices, choices

Insurance packages for events, with all of their options and selections, can be somewhat confusing. Beyond general liability, here are several coverage options that your institution and your outside sponsors should consider.

1. Errors and omissions. This insurance covers the event planner if he or she accidentally overlooks information that causes a problem for event attendees or co-sponsors. Doug McCrum, president of Global Specialty Risk in Dallas, gives the example of an outdoor event for which you've closed off some roads. "If someone has a heart attack and the ambulance can't get through, then you have a problem that would likely be covered under errors and omissions," McCrum says. But, he cautions, it doesn't cover errors of gross negligence.

2. Workers' compensation. This provides your institution protection against bodily injury, sickness, or disease sustained by campus employees and others you've hired to work the event. Make sure your policy covers your campus not only during the event but also before and after, to protect you in the event of any problems during setup and breakdown.

And remember, your institution is not responsible for workers' compensation claims by employees of other firms that you've contracted to do work for you. Those cases are the responsibility of the worker's employer.

3. Cancellation and abandonment: The preparation for an event occurs long in advance of the actual start date and often involves a large financial outlay for items such as advertising, printing, booking fees, and deposits. An organizer receives no income until shortly before or even the day of the actual event.

Cancellation and abandonment policies cover any net loss you incur if you must cancel your event because of reasons outside of your control. These losses include both expenses you cannot reclaim and revenues-such as ticket sales and sponsorship funds-that you must return. This type of insurance can cover events such as conferences and conventions, concerts, exhibitions, and sporting competitions.

4. Non-appearance: This provides the event planners with indemnity if they must cancel or postpone a special event because a specific person-without whom the event cannot take place-does not show up. Typically, this involves theater or film stars, musicians, and lecturers. Insurance companies provide coverage on the basis of death, accident, or illness of the named person or persons, or for any other cause that is outside the named person's control. Willful non-appearance is not covered.

5. Contingency adverse weather: You can never guarantee good weather conditions for outdoor events. Adverse weather policies cover the insured for the net loss it incurs if it must cancel an event solely because of bad weather. You can combine weather coverage with cancellation and/or non-appearance indemnity to provide the broadest possible coverage.

6. Death and disgrace: If a scheduled celebrity dies, she obviously won't be able to fulfill her contract with you. Or, if a performer commits an act prior to your event which is publicly offensive-usually, a punishabe crime-you may not wish to have him appear on your campus. Death and disgrace policies cover you for any losses you incur due to either of these cases.

7. Boutique, or niche, insurance: As mentioned several times in this article, campus event planners should advise outside planners and event hosts to buy their own insurance. Many insurance companies provide policies specially designed to protect individuals and groups who conduct private special events.

R.V. Nuccio & Associates Inc. of Fawnskin, California, for example, has developed special policies it calls "Barmitzvahsurance" and "Celebrationsurance." Events covered under niche insurance include meetings, reunions, wedding showers and ceremonies, baptisms and baby showers, and parties to celebrate graduations, anniversaries, birthdays, engagements, retirements, and so on.

Robert Nuccio says that in the past, facility owners carried the insurance coverage. But now, as society becomes more litigious, facility owners are requiring all parties involved with the event to carry their own insurance-even the disc jockey. Nuccio says he recently had a case where the dj used a bubble machine that put a soapy film on the dance floor. A guest slipped and fell, and then sued the host, planner, facility, and dj.

Furthermore, most private event planners don't procure liability insurance, Nuccio says. Instead they require that their client buy a policy and name the event planner as an additional insured party. Campuses, when they are the facility owner and/or the event planner, should do likewise.

Rules of the buy

When it comes to cost, buying insurance is different for every institution and every event. "There are so many things to choose from-it's like deciding whether to buy a car stripped or loaded," says Meryl Hillsberg, president of Impressive Events in New York.

Variables to consider when estimating your insurance needs include

  • type of event,
  • exposure (will you conduct the event indoors or outdoors, or near a high-traffic area?),
  • number of attendees,
  • location (will the event be on campus or off?), and
  • possible dangerous activity.

Experts will always advise you to purchase insurance well in advance of the event. Even so, they say, event planners continually try to purchase insurance once it's already apparent the event may be in danger, or sometimes even after the fact.

Nuccio says that during hurricane season or when the news predicts snow and ice, his company's phones ring off the hook. But by that time it may be too late.

Selecting an insurer

When selecting an insurance provider, McCrum of Global Specialty Risk advises looking for a firm that has a good A.M. Best Company rating (see "Where to Turn for Help" on page 22) and can offer all coverages. "You don't want to have to piece together event coverage from many carriers, who in a crisis may dispute who had primary and secondary coverage," he says.

Industry experience is also an indicator of a reputable company. "Although it is not the only factor to consider, stability is certainly the most important," says Madelyn Flannagan, manager of information services for the Independent Insurance Agents of America. "It is essential that you purchase your insurance protection from companies that are going to be around to pay your claim." She advises keeping tabs on the financial status of your insurer-by regularly reading the business section of the newspaper or contacting watchdog associations like her own. (For more information, see "Where to Turn for Help" on page 22).

After her ordeal, Zanti of the Main Street Flagstaff Foundation advises other event professionals to "calculate a reasonable amount of coverage for your event and do your homework.

"You think because you purchased insurance, you're covered," she says. "But unless you can afford to buy everything, it's a real gamble. Purchasing insurance won't guarantee anything, but it will reduce the chance that you will take a loss in some areas if something happens, as well as give you some peace of mind."

About the Author Jamise Liddell
Jamise Liddell is director of public affairs and special events coordinator at Northern Arizona University, a public institution of 18,674 students in Flagstaff.

 

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