Key General Liability Insurance Coverage Exclusions

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Insurance covers everything, doesn’t it? Well, no, some exclusions do apply. And buried within the general liability insurance policy are a number of exclusions relevant to broadcasters including the following.

Alcoholic Beverages

The standard liquor liability exclusion eliminates coverage for liability for which an insured may be held responsible by reason of:

  • Causing or contributing to the intoxication of any person, or
  • The furnishing of an alcoholic beverage to a person under the legal drinking age or under the influence of alcohol, or
  • Any statue, ordinance or regulation relating to the sale, gift, distribution or furnishing of alcoholic beverages

The exclusion is then amended in that it applies “only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverage.” Now, while a broadcaster’s business is clearly broadcasting, you have to be sensitive to situations where it could be argued that you had a dual capacity. You’re broadcaster but by virtue of what you did at the event, it is argued that you were also engaged in the business of distributing, selling, serving or furnishing alcoholic beverages.

Key safeguards relative to this exclusion include:

  • Never be the source of alcoholic beverages to the public. Hire vendors to handle the distribution of alcoholic beverages and do not share in the revenue from the sale of alcoholic beverages. Instead sell the beverage rights to a concessionaire or vendor.
  • Be attentive to sobriety levels of employees, guests and patrons and intervene when appropriate.

The general intent of the liquor liability exclusion is to limit coverage to small, non-commercial circumstance — what is commonly referred to as “host liquor liability” (e.g., a holiday office party for station employees).

Aircraft

Drones are a hot trend now and are getting considerable use by some television stations with locally produced news (and by CNN). But, just as the general liability policy does not provide coverage for an automobile that you own, it also does not provide coverage for an aircraft that you own. And a drone is an aircraft even though it is piloted remotely. Further, no coverage is provided for an aircraft that you do not own that is operated by you or is loaned or rented to you except if the aircraft:

  • Is hired, chartered or loaned to you with a trained, paid crew
  • Does not transport persons or cargo for a charge.

Various insurance facilities are now offering specialized insurance policies for commercial drones and the coverage is rather inexpensive. And if you will on occasion hire a helicopter or fixed wing aircraft (e.g., for aerial footage of a news worthy event or for promotional purposes), it is always wise to ask the owner to list your company as an Additional Insured on their policy or that they at least provide you with a certificate of insurance.

Expected or Intended Injury

People gathering at events may have different perspectives or beliefs. Or they may just become disagreeable. Things can happen. While the general liability policy provides coverage for the unexpected incident and the unintended accidental injury, the general liability policy also specifically excludes coverage for injuries or property damage that is “expected or intended from the standpoint of the insured.” (This exclusion does not apply to bodily injury resulting from the use of reasonable force to protect persons or property.) Now, clearly your company is not going to conduct an event with the intent of injuring persons or damaging property. But we can get into a situation where an attorney for the injured argues that because of the circumstances of the event you “should have had a reasonable expectation of possible injury to participants” and now we have a problem.

Key safeguards relative to this exclusion include:

  • Keep in mind that outspoken speakers and personalities can attract like-minded, emotionally charged people along with emotionally charged people of a very different mindset.
  • Review the security plan for the event with your security company and make sure that you hire a sufficient number of security personnel (and EMTs, if appropriate).
  • Secure a certificate of insurance from the security company displaying information as to their general liability, excess liability and workers’ comp coverages. Your company should also be listed as an Additional Insured on their general liability policy.

Watercraft

Boats and watercraft are, well, fun! And they can be used to create many exciting, attention-getting events. But there are standard general liability exclusions relating to watercraft, an example of which is that “No coverage is provided for liability for bodily injury or property damage arising out of the ownership, maintenance, use or entrustment to others of watercraft owned or operated by or rented or loaned to any insured.” That is kind of a killjoy exclusion, but fortunately, there is typically a clarification that softens the exclusion such that it does not apply when the non-owned watercraft:

  • Is less than 31 feet long (or 51 feet long under certain policy forms), and
  • Is not being used to transport persons or cargo for a charge

Underwriters will sometimes agree to relax the non-owned watercraft aspect of this exclusion to accommodate larger watercraft and paid attendance cruises once they have been provided a watercraft liability certificate of insurance from the owner of the watercraft that recognizes your company as an Additional Insured.

Mobile Equipment

NASCAR is big, and NASCAR fans are very passionate. Sponsoring a race car at the local speedway and placing your station logo and call letters on the driver and passenger side doors may resonate with your audience and may seem like an innocent act. But you need to be aware that there is a general liability exclusion such that no coverage is provided for “liability for bodily injury or property damage arising out of the use of mobile equipment in, or while in practice for, or while being prepared for any prearranged racing, speed, demolition or stunting activity.” “Mobile equipment” includes motorized vehicles not licensed for highway use, including a race car driven at the local speedway. As a sponsor supporting the racing activities of that race car, you could be enjoined in a lawsuit should there be an accident and someone becomes injured (e.g., the race car crashes into a corner wall and debris goes into the grandstand, injuring spectators). And there would be no coverage.

There is a very limited marketplace for insurance to fill-in this exclusion, so look into the coverage before signing the sponsorship agreement.

This discussion is intended to be general in nature. Terms, conditions and exclusions under your general liability insurance policy may differ. Consult your actual policy forms for details.