In Case of Emergency

Jane Berzan, CAE, of the National Association of Convience Stores, says insurance is so vital, "we would cut back somewhere else before we cut that."

It’s a meeting professional’s job to plan for everything going just right for the big event, from the welcome reception to the final move-out hours. But what if everything goes horribly wrong? That was the case two months ago when Hurricane Katrina stormed into the city of New Orleans and along the Gulf Coast, causing unimaginable destruction that forced the immediate cancellation of hundreds of meetings and conventions.
    Soon after the storm struck, the New Orleans Convention & Visitors Bureau announced that all conventions through March 31, 2006, had been canceled, and planners found themselves grappling with a slew of questions: Should the event be canceled outright or relocated? What is the best and fastest way to notify the hundreds of affected attendees, exhibitors and suppliers of the changes? What is the best way to find comparable space in alternate cities? Who on staff should be responsible for doing what? The issues were immediate, urgent and overwhelming.
    Yet, there were planners who seemed better able to meet those challenges than others; in a matter of days they somehow managed to successfully relocate entire citywide conventions with as many as 30,000 attendees no small feat, even by military standards. (See “Gone [and Relocated] With the Wind,” page 66.) How were they able to move so fast and skillfully in the face of adversity? They had a risk management plan in place.
    “There are two pieces to how we manage risk and prepare for disaster,” says Jane Berzan, CAE, senior vice president, events, marketing and supplier relations, for the Alexandria, Va.-based National Association of Convenience Stores, which had its annual citywide of 25,000 attendees scheduled to meet in New Orleans Oct. 30-Nov.1. “One is our own internal disaster plan, something we really focused on after 9/11 and which we immediately implemented when Katrina struck. The other is good insurance coverage.”
    To which industry experts say “Amen.”

ABCs of managing risk
A risk management policy should be a critical part of any successful business operation. Yet, not enough meeting planners take the time to create a plan that realistically fits their event’s needs, says Tyra Hilliard, CMP, an associate professor of tourism and convention administration at the University of Las Vegas’ William F. Harrah College of Hotel Administration. (Indeed, nearly half of respondents to an M&C survey reported having no such plan; see this month’s research results, “Operating in Crisis Mode.”)
    “After 9/11, everybody came up with a plan addressing terrorism, which really is a lot less of a threat than a natural disaster or even a brush fire in California,” notes Hilliard.
    So what constitutes realistic risk assessment? Experts point to some key considerations.
    " Conceive of calamities. Overall, risks fall into four major categories: natural disasters, accidental, technological and human-caused. “Of course, you can’t possibly plan for every risk,” says Hilliard. “You have to shoot for what has the highest probability and the highest consequences for the particular event.”
    Hilliard recommends making a list of such emergencies and then assigning a numerical probability of one to five for each, with five being the highest. As devastating as a natural disaster can be, many other possible crises could make the list, such as property theft, medical emergencies, a technology glitch, sexual harassment, alcohol-related incidences, loss of a key speaker or a transportation strike.  
    Lauren Lake, event and marketing director for the Atlanta-based Association of Energy Engineers, begins devising a risk management plan as soon as she has nailed down the meeting site. “Once I start working with the CVB and the convention center, that’s when I begin thinking about contingencies,” she notes. “Each plan is city by city, location by location.”
    Lake’s foresight was put to the test in September, when the AEE was forced at the last minute to relocate its annual convention from the Austin Convention Center in Texas because the facility began housing Katrina evacuees. Thanks to her advance study of the city, having taken into account the possible need to move the event, and developing close relationships with convention center and CVB personnel, the event survived. In just four days, Lake and the meeting staff of nine had secured alternate exhibit space at the nearby Renaissance Austin Hotel, arranged for bus transportation to shuttle the 3,000 attendees between five hotels and the new meeting location, and notified all attendees of the change.
    " Make it a team effort. According to Susan McSorley, director of conventions and meeting services for the Chicago-based American Academy of Orthopaedic Surgeons, the crisis team put in place after 9/11 was crucial to the association’s response in the frenzied days following Katrina, when the AAOS was forced to move its March 2006 citywide of 28,000 from New Orleans to Chicago.
    “We brought all the right people together to look at the issues from an overall association level,” says McSorley. “Having representatives from finance, legal and communications in the same room played a key role in making the right decisions for our organization.”
    When creating a crisis team, says McSorley, install core members first, and then expand it to include all staff members once on site. AAOS’ core includes its chief financial officer, chief executive officer, legal counsel, chief education officer, director of public and media relations, director of communications and director of information services.
    " Designate a command center. When site inspecting a destination, it is important to select a location that could be used as a base of operations in the event of an emergency. For safety’s sake, such a site should be separate from the convention center and headquarters hotel, which are, after all, the very places anticipated as vulnerable to risk.
    “The location should have phone lines, electricity and a computer hookup,” advises Jane Berzan, who says she generally relies on the convention center staff to help her identify an appropriate command center.
    " Assign tasks. After the risks have been identified and a crisis team has been set up, develop a master plan that delineates responsibilities. “It is important to spell out who is in charge of different aspects of the contingency plan,” says Berzan, “because the staff needs to know who to call for what purpose.”
    Berzan also advises planners to seek out authorities at the convention center, city officials, individual hotels and local police to find out what their own risk plans entail. “You have to make sure your plan is aligned with how the city you are going to be in would manage a disaster, so that both approaches are consistent.”
    In addition, Berzan asks the convention and visitors bureau for help in securing copies of the various plans, which she, in turn, integrates into her organization’s internal master plan.
    " Keep it short. Don’t create an unwieldy 300-page dossier. “In a crisis, no one is going to slog through page after page to find the proper directives,” says Tyra Hilliard. “It should be short enough so it is manageable but gives guidance.”
    McSorley of the AAOS deliberately limited the association’s event crisis plan to seven pages. “It is not crisis specific  or city specific. It is generic, and we kept it that way to keep it simple,” she says. “It has to be something people can use.”
    " Communicate and adapt. “Planners should meet several times a year with team members to go over the plan and do scenario training,” says Hilliard. The plan should be updated with new crises as they emerge, such as a spreading bird-flu virus. “And share your plan with the facility you are going to, because yours might not match theirs, especially with regard to evacuation,” Hilliard adds.
    How much to communicate to attendees depends on the philosophy of the association. Some planners believe overwhelming attendees with emergency information can backfire, causing trepidation on their part about attending.
    Terrence Calhoun, director of conferences and meeting services for the Washington, D.C.-based National Minority AIDS Council, prefers to talk with attendees at check-in rather than send out printed information. “We inform them that if something happens on site, they are to check in at the registration area for instructions,” he says.
    At the very least, says Hilliard, planners should put an information sheet in the registration packet with a number to call and place to go in case of emergency. “Attendees today are much more aware of risk, and you can communicate with them in a responsible way,” she notes.

Insuring against disaster
One has only to look to Biloxi, Miss., when considering the importance of insurance.
    Two months before Hurricane Katrina devastated the region, the Biloxi City Council, at the urging of mayor A.J. Holloway, voted unanimously to purchase a $92,000 business interruption insurance policy from Sawyer Insurance in Gulfport, Miss. a policy that, as fate has it, will pay out $10 million to the city over the next six months.
    Holloway’s reasoning was simple: If a disaster struck the city and its casinos were shuttered, Biloxi would lose one-third of its annual operating revenue a scenario that played out with frightening accuracy.
    This is the same logic planners should use when determining if they need to purchase insurance coverage for their events, says Eileen Hoffman, assistant vice president and program manager for the Washington, D.C.-based AON Association Services’ Showstoppers Association Event Cancellation Insurance program (sponsored by both the American Society of Association Executives in Washington, D.C., and the International Association for Exposition Management in Dallas).
    “The real message here is, how important is your net profit to your organization’s financial health?” says Hoffman. “If the risk could wipe you out, what’s there to consider?”
    " Be conscious of costs. Rates are determined by exposure. Issues considered include type of meeting, location and time of year, as well as the meeting’s expenses and expected gross revenue. While insurance premiums increased significantly after 9/11, says Hoffman, there is no indication yet that the same scenario will occur as a result of Katrina. So far, she emphasizes, affordable insurance is out there. “A minimum premium of $500 covers approximately $100,000,” she notes.
    Jane Berzan of the NACS views insurance as a no-brainer. “We feel it is so important, we would cut back somewhere else before we cut that,” she says. This year, her association purchased event cancellation/interruption insurance for $125,000. At stake: the estimated $15 million in revenues its November Las Vegas convention stood to generate roughly 70 percent of the group’s annual income.
    " Tout the emergency plans. Be prepared to answer questions about risk management from underwriters who want to limit their exposure. They want to know what circumstances could threaten the event and lead to a loss. If the planner can show solid, proactive planning for risk, not only will the event be more insurable, it might even get a more favorable rate, says Hoffman.
    " Choose wisely. A basic event cancellation insurance policy does not cover hurricanes, earthquakes or terrorism. That coverage must be purchased separately. It also is more expensive than a basic policy, because the potential risks and losses are greater.
    One point to keep in mind when considering terrorism insurance coverage: The Terrorism Risk Insurance Act, which  was signed into law by President George W. Bush in late 2002, made it mandatory for such coverage to be available to property and casualty policies in order to protect consumers. That law is up for renewal Dec. 31, 2005. “It could be renewed, reworded or dropped altogether,” says Hoffman. “We have to wait and see.”
    " Read the details. Don’t assume event cancellation insurance does not cover the cost involved in relocating an event. Most policies provide coverage for events that are forced to reschedule due to facility damage, such as the situation in New Orleans and the Gulf Coast.
    “People need to read their policies,” says Hoffman. “When they move the meeting, we add a change to the policy. It is a change endorsement with the new dates and a limit in the amount of indemnity. It is not a new policy. And depending on where they go, their premium might go up or down.”