Broadcasters create and participate in many exciting, attention-generating special events. Craft beer festivals, classic auto shows, fishing tournaments, and other special events can be an important part of a broadcaster’s engagement with its community and can also be an important part of a broadcaster’s marketing efforts on behalf of its clients.
But what about insurance for special events? Let’s say that you are a “co-sponsor” of a July 4th hot dog eating contest with live music, beer, and fireworks. Are any special insurance arrangements necessary? How can you best protect your company?
Get An Early Start
Probably the most important thing is to get an early start on your insurance arrangements. We have gotten calls like this before –
“Hi, I’m Betsy Panic. I’m with KXYZ Rocks. I know it’s Thursday but I was driving to work this morning listening to our morning drive guys and, well, you wouldn’t believe what we’re doing this weekend”.
Depending on the nature of the special event, your responsibilities, and other factors, the underwriter may want to be provided copies of contracts, certificates of insurance from contractors, and the like. In almost 35 years of insuring broadcasters, Preston-Patterson has had only one client special event where we could not get underwriters to agree to provide coverage. We have had others where the underwriter agreed to provide coverage but, due to the lack of necessary information, a higher than optimal premium was charged.
Calling Preston-Patterson (800-526-5199) early on can lower (or even eliminate) the cost and reduce the stress in arranging the insurance for special events.
Who Is Doing What?
The words “promoting” and “sponsoring” can mean different things to different people when it comes to the insuring special events. The key question is – who is responsible for organizing and conducting the event? If it is truly your special event that’s one thing. But often times a broadcaster will partner with another enterprise or municipality in putting together an event and will have a somewhat secondary role with respects to liability.
For that July 4th hot dog eating contest with beer and fireworks, let’s suppose that all your station is doing is the over-air and internet promotion of the event. That is a significantly lower level of risk (and for which generally no special insurance arrangements for your station would be necessary) than if the station is leasing the grounds, buying the hot-dogs, handling the sale of beer, and hiring the fireworks contractor.
What Does The Contract Say?
While the “Who is doing what?” question is the starting point to insurance for special events, we then need to look at the insurance and indemnification sections of any contracts and leases for the special event to see if there are any contractual transfers of liability.
Although a contract with a promoter hired for a special event may stipulate that the promoter is responsible for arranging, organizing, and conducting the special event, the insurance and indemnification provisions of the contract may stipulate that the station is required to “…defend, indemnify and hold harmless Promoter from any and all liability arising out of the event…”. In this later scenario, the event is, basically, entirely yours from a liability standpoint just as if you were the primary organizer.
Certificates of Insurance
In addition to direct liability and contractual liability, we also have to be sensitive to vicarious liability – liability by association. One of the best ways to protect your company from vicarious liability arising out of your special events is to secure certificates of insurance (COI) from contractors you engage for an event and from vendors participating in your event.
A satisfactory COI from a contractor is your assurance that the contractor will be able to address complaints arising out of its services (you are welcomed to send Preston-Patterson the COIs that you receive for review and comment). If you get push-back in requesting a COI it could mean that there is a problem, such as the contractor not having insurance. And if the contractor does not have insurance and something bad happens, guess who gets stuck with the claim? Probably you, the party that hired the contractor.
In planning and managing your special events it is important to keep in mind that there is an exclusion under general liability insurance policies the effect of which is to eliminate coverage for certain liquor liability.
Basically, there are two courses of action when this exclusion is applicable. The first is to separate your company from the direct sale of alcoholic beverages. For example, at that July 4th hot dog eating contest, perhaps you just sell the beverage concession rights to the local Budweiser distributor and then let the Budweiser distributor handle all aspects of the sale of the beer. The second option is to purchase a liquor liability insurance policy or endorsement.
Waivers are helpful but they have their limitations. The more unique, unusual, or hazardous a special event, the less effective a waiver will be. A waiver from a participant in a station-organized 5K run will have some degree of effectiveness but a waiver from a participant in a hot dog eating contest will have limited or no strength. You should use waivers where possible but just keep in mind that while they may deter small complaints, they may not hold up in unique circumstances or cases of serious injury.
Coverage availability and pricing subject to underwriting. Preston-Patterson is licensed in all states and Washington DC.
Contact: Stephen W. Patterson, MBA, CPCU, firstname.lastname@example.org, 800-516-5199, ext 111