Last month we discussed insurance basics for covering events. The following is a discussion of extra coverage you can buy to indemnify you and your organization even further.
Lest you think your event doesn’t fit any of the following categories, remember that most common activities have a risk element. A simple cocktail party has a substantial potential for liquor liability. Failure to meet Americans With Disabilities Act requirements can lead to litigation.
The Finer Details
Don’t overlook your risks by assuming they are incidental.
All-risk floaters. These address items unique to your event. For example, you might add computer insurance to your basic “office contents” coverage to protect against breakdown or damage. In another example, say you rent a glass sculpture to display at a gala. The morning of the event, the concierge phones you to say the sculpture was found shattered on the floor of the ballroom. You’re covered with an all-risk policy.
Blanket-bond coverage. If money will be collected at the event, this protects against theft. However, blanket bonds generally cover employees only. A special rider can address volunteers or independent contractors who might handle your money, especially when using bureau staff for registration.
Product liability. “We’re not making or selling products,” you think. Still, you should have this coverage. Why? Food is a “product,” and if something goes wrong with the banquet, the sponsor can share the liability.
Personal-injury liability. This is protection against our nightmares Ñ claims of defamation, malicious prosecution, false arrest (someone says he was detained on the trade show floor against his will, for example), libel, etc.
In Claim Language
Further safeguard yourself and your organization by reading the fine print on how long your insurance lasts. If you have claims-made coverage, a claim must be registered during the period of time the policy is in effect. For example, if the policy covers the period of Jan. 1 through Dec. 31, 2007, a claim made after Dec. 31, 2007, for an incident that occurred in October 2007 would be excluded.
With occurrence coverage, claims for incidents that happened when the policy was in effect would be covered even if filed years later. The classic examples of this are the cases that arose in the 1980s as a result of the use of asbestos in the construction of buildings during the 1940s and ’50s. Companies with occurrence policies in effect at the time of installation were covered.
It’s also important to know when your insurance company will come to your defense and how it is going to do it.
One type of clause will provide for reimbursement, hold harmless and indemnification. That means you have to spend the money first before the insurance carrier will cover you. The alternative is to have a requirement that the insurance carrier “defend” you in the event of any claim being made, whether it goes to litigation or not.
With indemnification only, the insured controls the defense; on the other hand, you have to bear the costs until the insurance company is prepared to reimburse you. Where there is a duty to defend, however, the insurance company might control the defense and how the litigation is conducted. You might want to consider making sure the policy provides for a defense, while you reserve the right to determine who will be your defender.
Any time you raise a question or ask for clarification, get the answer in writing and get a copy for your records. Verbal agreements won’t protect you.
Jonathan T. Howe, Esq.,is a senior partner in the Chicago, St. Louis and Washington, D.C., law firm of Howe & Hutton Ltd., which specializes in meetings, travel and hospitality law. Legal questions can be e-mailed to him at firstname.lastname@example.org.