Insurance Needs Grow

Meetings & Conventions: Incentive News

INCENTIVE HOUSES REQUIRE MORE COVERAGE OF DMCS, OTHER SUPPLIERS Insurance Needs Grow

Jonathan T. Howe, ESQ. The amount of coverage incentive firms require of destination management companies, special event firms and the subcontractors those suppliers hire might soon jump from $1 million, the current industry standard, to $5 million.

Meanwhile, incentive firms and their clients are increasingly asking to be named on their suppliers’ certificates of insurance.

Both these trends had begun before Sept. 11, said Jonathan T. Howe, Esq., senior partner for Howe & Hutton Ltd. in Chicago. Yet, he added, “There’s a much more heightened awareness of insurance issues now.”

A number of incentive organizers on Howe’s client list now require suppliers to have aggregate coverage of $5 million, he said.

Among incentive houses interviewed by M&C, Fenton, Mo.-based Maritz Inc., one of the largest players in the United States, now requires suppliers to list the firm and its clients on certificates of insurance. (Another large in- centive company, USMotivation, based in Atlanta, asks for such listings on a case-by-case basis, according to a spokesperson.) And while not yet legally requiring suppliers to have liability coverage of $5 million, Maritz more strongly recommends it now than it did in the past.

Although Maritz insists that the changes, introduced over the past year, are not of major substance, suppliers who work with the incentive giant consider them to be significant. Some are concerned that Maritz will require $5 million in coverage in the very near future.

While agreeing that higher coverage costs are necessary today, Terry Epton, president of the Denver-based Association of Destination Management Executives, is concerned that implementing them will be especially tough on small, independently owned firms and might put further financial strains on companies already strapped. ADME currently is working with several insurance firms to offer lower-cost policies through the association, Epton said.