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Risk Management and Special Events


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Webinar presentation on risk management issues in special events to the National Health Council Chief Development Officers Affinity Group by Joseph Caruso and Jim Linn. October 3, 2011

Published in: Business, Economy & Finance
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Risk Management and Special Events

  1. 1. Presented by: Risk Management Issues in Special Events Team Atlanta
  2. 2. Our Presenters Joseph Caruso CIC, SCLA Area Senior Vice President, 25 years risk management experience, Finance and Claims background. Phone: 678-393-5281 Mobile: 770-845-7075 Email: [email_address] Jim Linn Area Senior Vice President, 31 years risk management experience, Finance, Audit, and Underwriting background. Phone: 678-393-5280 Mobile: 770-714-4714 Email: [email_address]
  3. 3. Civil and Criminal Liability
  4. 4. Elements of Negligence <ul><li>Legal duty to act </li></ul><ul><li>Breach of legal duty </li></ul><ul><li>Causal connection </li></ul><ul><li>Actual damages </li></ul>
  5. 5. Risk Management & The Nonprofit Sector Great Free Resource Online Nonprofit Risk Management Center
  6. 6. Who are the Stakeholders? <ul><li>Before choosing and executing a risk management plan, the VHA must identify its stakeholders: </li></ul><ul><ul><li>Patients </li></ul></ul><ul><ul><li>Donors </li></ul></ul><ul><ul><li>Volunteers </li></ul></ul><ul><ul><li>Employees </li></ul></ul>
  7. 7. Patients and Risk Management <ul><li>The best risk management practices make the organization able to serve patients better </li></ul><ul><ul><li>Patients are served in an environment that meets their needs more often </li></ul></ul><ul><ul><li>More patients are served because the organization spends less money responding to negative events </li></ul></ul><ul><ul><li>Patients are protected from the organization’s negative risk outcomes </li></ul></ul>
  8. 8. Donors and Risk Management <ul><li>Nonprofit organizations are subject to the risk appetites of donors </li></ul><ul><ul><li>Donors (especially major gifts) must be convinced that the organization will make prudent decisions and investments of their contributions </li></ul></ul><ul><ul><li>Donors will reduce their giving if bad events happen </li></ul></ul>
  9. 9. Volunteers and Risk Management <ul><li>The most valuable volunteers recognize that they are taking risks along with the organization </li></ul><ul><li>Volunteers who are not concerned about their own risks may actually increase the organization’s risk </li></ul>
  10. 10. Employees and Risk Management <ul><li>Employees should not have to suffer the consequences of poor risk management </li></ul><ul><ul><li>Budgets limited by poor risk financing tools </li></ul></ul><ul><ul><li>Working conditions compromised by poor risk choices </li></ul></ul><ul><ul><li>Unneeded diligence to protect themselves </li></ul></ul>
  11. 11. Role of Risk Management <ul><li>Good stewardship of donor funds, volunteer time, attention to patient needs and employee protection require good risk management practices </li></ul><ul><li>For a nonprofit organization, these practices do not differ much from a for-profit corporation’s good risk management practices </li></ul>
  12. 12. Certificate & Information Management
  13. 13. Contract Review <ul><li>Who Is An Insured? </li></ul><ul><ul><li>Executive Officers, Directors, Employees and Volunteers of the VHA </li></ul></ul><ul><li>Additional Insured Status </li></ul><ul><ul><li>Amends the “Who Is An Insured” section of policy </li></ul></ul><ul><ul><li>Frequently requested due to litigious society </li></ul></ul><ul><ul><li>Extent of Coverage afforded is based on Endorsement </li></ul></ul><ul><li>Waiver of Subrogation </li></ul><ul><ul><li>Precludes recovery by grantors insurer regardless of liability on the part of the requesting entity </li></ul></ul><ul><ul><li>Accident experience becomes part of grantors experience rating impacting future premiums </li></ul></ul>
  14. 14. Event Liability Anyone can be sued
  15. 15. Are You Prepared? <ul><li>What could go wrong: </li></ul><ul><ul><li>On premises/location injuries </li></ul></ul><ul><ul><li>Food poisoning </li></ul></ul><ul><ul><li>Product liability for prizes </li></ul></ul><ul><ul><li>Damage to premises/location </li></ul></ul><ul><ul><li>Adult beverage liability </li></ul></ul>
  16. 16. Indemnification <ul><li>Depending on the contract, you may become liable for the negligence of others: </li></ul><ul><ul><li>Employees </li></ul></ul><ul><ul><li>Volunteers </li></ul></ul><ul><ul><li>Venue </li></ul></ul><ul><ul><li>Servers </li></ul></ul><ul><ul><li>Caterers </li></ul></ul><ul><ul><li>Bartenders </li></ul></ul>
  17. 17. Adult Beverage Liability <ul><li>Impaired decision-making </li></ul><ul><li>Alcohol-related personal injury </li></ul><ul><li>Over-serving </li></ul><ul><li>Serving under age </li></ul><ul><li>Contributing to DUI accident </li></ul><ul><li>Contributing to disorderly conduct </li></ul>
  18. 18. Know the Law <ul><li>Familiarize yourself with your jurisdiction’s Dram Shop Act laws </li></ul><ul><li>Synchronize your best practices with the vendors </li></ul><ul><li>Be sure bartenders and event managers can identify and cease service to over-served and under-aged patrons </li></ul><ul><li>Consider a designated driver program </li></ul><ul><li>Call for help when appropriate </li></ul>
  19. 19. Know Your Contracts <ul><li>Read your contract and any demands for additional insured coverage </li></ul><ul><li>Identify all parties whose actions you may become liable for </li></ul><ul><li>Seek indemnification from third parties when appropriate </li></ul><ul><li>Implement best practices and encourage others to implement as well </li></ul>
  20. 20. Sharing Best Practices <ul><li>Brain storm event hazards both internally and with your Risk Management Advisor and pre-plan response </li></ul><ul><li>Engage your Insurance Broker in this process! </li></ul><ul><li>Give strong consideration to subcontracting hazardous tasks such as food and drink service, amusement operation, and security and seek proper indemnification and waivers </li></ul><ul><li>Collect participant and volunteer waivers </li></ul><ul><li>Name an on-site incident response coordinator and communicate contact information to all staff and volunteers </li></ul><ul><li>Establish accident investigation procedures that include witness statements and pictures </li></ul>
  21. 21. Weather Coverage <ul><li>Coverage for loss of fixed expenses, revenue, and/or profit associated with weather disruption of an event </li></ul><ul><li>Rain is the most common peril insured but policies can also be written for snow, temperature, wind, hurricane or lightning </li></ul><ul><li>Rain coverage is generally written with a coverage trigger of rainfall during a set timeframe in hours and common rain increments are .10, .20, .25, .50, .75 or 1 inch </li></ul><ul><li>The lower the selected rain increment the higher the cost of coverage </li></ul><ul><li>Premium rule of thumb is 5%  of coverage limit in the middle of the rain increment spectrum </li></ul><ul><li>Coverage must be bound at least 7 to 10 days in advance and most policies have a $500 minimum premium </li></ul>