Predicting the future is like forecasting the weather. You think you can anticipate what’s going to happen — then it doesn’t. There has been a great deal written in the past few years concerning the legal liability of meetings and events, usually in terms of a weather-related crisis or the likelihood of personal injury. But to what extent do corporate planners need to worry about incurring liability in the course of their work responsibilities? Quite a bit, say the experts. Despite risk-management practices that have reduced frivolous claims, meeting and event professionals continue to feel the effects of operating in a litigious society.
According to John Foster Esq., CHME, attorney and founding partner at Foster, Jensen & Gulley, who specializes in the legal aspects of meetings and conventions, trade shows and events, the general litigation explosion that has hit our society in recent years certainly has not missed the meetings industry. A meeting planner is now not only responsible for booking guest rooms and meeting space, choosing menus and hiring speakers, but also for protecting the sponsoring organization from risk and ensuring, to the extent possible, the safety and well-being of the participants once they get to the meeting. “In short, meeting planners are also risk managers,” Foster says.
“Risk management starts by asking four basic questions: What can go wrong? What can be done to prevent harm from occurring? What steps should be taken if harm does occur? Where will the money come from?”
— John Foster Esq., CHME
As Foster explains, the risk of loss to meeting sponsors from accidents and disasters generally falls into five categories: 1) property and casualty losses from theft; 2) damage or destruction to property from negligence, intentional acts or natural causes such as fires, floods or hurricanes; 3) personal injury to staff, attendees or participants, including damage to reputations; 4) economic losses from cancellation of the event because of acts of God, e.g., natural causes or other events caused by third parties; and 5) contractual liability from cancellation or attrition.
According to Laurie Sherwood, attorney at Walsworth LLP in San Francisco, when selecting locations, it is important for event planners to do their due diligence in investigating the location and the various vendors and suppliers being used. It also is important to account for all potential contingencies including weather, uninvited persons, geopolitical considerations, etc. And remember that a meeting planner also may be responsible for property damage and for the risk of bodily injury to attendees, so make sure any vendors hired are also reputable and insured. “If the event involves physical activities, know the ability level of the participants, plan accordingly and have them sign waivers,” Sherwood says.
General liability issues include personal injuries resulting from event activities and/or conditions at the location, lack of appropriate accommodations/event space, alcohol service and breach of contract. Additionally, at offsite employee events, legal issues from an employment perspective can arise, such as sexual harassment and workplace safety issues.
In addition, some insurance policies only cover planning services and not the event itself. So when hiring independent contractors, such as a vendor, and they are not insured, a meeting planner or the employer may be held liable for that independent contractor’s poor work, illegal conduct or accidents. “A meeting planner who already has general liability can ask the insurer to add one or more independent contractors to it as ‘additional insured,’ ” says Charles Vethan, founder and CEO of Vethan Law Firm. “They can be covered for the duration of the event or longer.”
Larger events also may pose additional security risks and may require the presence of outside security, and will likely require increased insurance coverage. “Indeed, the larger the scale of the event, the more risk of injury and liability. Typically these larger events will have transportation risks and liquor risks — if alcohol is being served,” Sherwood says.
That said, Vanessa Murray, an event marketing consultant and CEO of Charlotte, NC-based agency, TAKE Success LLC, says it’s important for meeting and event planners to remember that the same rules apply whether they are working on a contract for a 200-person event hosted at a hotel venue or a 20,000-person event at a convention center. “Yet these extra zeros may make a huge difference to your client’s insurance company,” Murray says. “By nature, larger events — especially sporting events where large groups of people will congregate — will lead to crossing more t’s and a longer planning process.”
If the companies with whom the meeting and event planners work have risk management departments, legal experts recommend starting there. Planners also should speak with the insurance carriers, and it is also helpful to speak with attorneys experienced in the area of meeting and event liabilities.
“Conduct due diligence in selecting venues, suppliers and vendors,” Sherwood says. “Have contracts with all venues, suppliers and vendors, and have the contracts reviewed by legal counsel. And where appropriate, have the participants and attendees sign liability releases.”
A corporate meeting planner needs to read the insurance policy and contact their insurance agent to ensure they have the coverage needed for each event. They also can contact their business attorney to help identify risks and the forms and contracts needed. Murray says that meeting and event planners should know what they are held accountable for in a legal dispute. “These clauses are the ones that keep me up at night when it comes to venue contracts,” Murray says. They include indemnity, insurance or certificate of insurance (COI), force majeure (more than just acts of God — includes civil disputes, etc.), confidentiality and merger clauses.
“Many meeting and event planners sign contracts with venues and vendors directly but there is huge monetary compensation for a loss, personal injury ‘liquidated damages,’ personal risk and other issues to take in account before doing so,” Murray says. For example, consider attrition. If the meeting planner or client does not fill the required hotel room nights per their contract, they will meet what’s called “attrition” and the hotel shall hold the contract owner to liquidated damages for the incurred loss in hotel sleeping room revenue since these rooms were blocked out and not sold to the public.
“The nightly room rate is set in the contract and multiplied by the number of room nights the contract owner did not meet or book,” Murray says. “Typically, a hotel contract will include an attrition allowance which is a 10 percent to 20 percent variance in room nights they must meet before penalty. The smallest oversight in these clauses could lead to a large liability to the meeting and event planner and/or their client.”
Murray suggests meeting and event planners initiate the following to ensure the liabilities they may be facing are thoroughly covered:
» Emergency plan. What is the chain of command and communication? Who shall be called if someone is injured, hurt or has gone missing?
» Public relations plan. Who is communicating with the press? What can and can’t be said? How and when shall it be communicated to the attendees?
» Site inspection. During the site visit, ask about the venue’s safety procedures and exits in case of a fire.
There are myriad insurance options that can help meeting and event professionals protect themselves and the companies for which they work. As Foster explains, commercial general liability (CGL) insurance is a “must have” for all meeting sponsors. “A typical CGL policy provides protection against claims involving bodily injury or death; damage to property owned, occupied or rented by the meeting sponsor as well as property in the sponsor’s care, custody and control — as long as the premises rented or used by the meeting sponsor is for seven consecutive days or fewer; and personal injury to third parties caused by an accident,” Foster says.
Another type of insurance that meeting planners should consider is international property and casualty insurance. According to Foster, this type of policy is becoming more commonplace as domestic companies and associations plan more international meetings and events. “It can include property, liability, foreign voluntary compensation, employer’s liability repatriation, travel services, accidental death and dismemberment, medical, political evacuation and kidnap and extortion coverage all in one,” Foster says. “Common exclusions to this coverage are war and terrorism.”
And, while fires, floods, hurricanes, strikes and snowstorms are frustrating unforeseen situations for planners and attendees alike, they also can cause considerable financial hardship without insurance. That’s why Foster also recommends “convention cancellation coverage” to protect against lost profits and expenses if the meeting or event cannot be held.
“For example, if a major airline strike, or strike at the headquarters hotel or convention center causes your event to be canceled, cancellation policies now cover cancellation, interruption or postponement of an event caused by terrorism, including bioterrorism, threats, fear of travel or prohibition of travel by employers,” Foster says. “Coverage is limited to sub limits, location and time period for any terrorist act.”
Thirty years ago, purchasing terrorism insurance coverage would have been a mind-boggling prospect. Unfortunately in this day and age of terrorist activity both in the U.S. and abroad, purchasing terrorism insurance coverage as part of an insurance package makes sense. While typical convention cancellation coverage may offer partial coverage for acts of terrorism, meeting planners should discuss the specific nuances relating to terrorism coverage to see if it is appropriate for the meeting or event being held.
One of the biggest mistakes meeting and event planners make includes not understanding the extent of their insurance coverage. “It’s a good idea to get general liability and professional liability insurance, although some states have statutory requirements already for the types of insurance your business needs to have,” Vethan says. “If a meeting or event planner runs a business in which clients are inherently at risk when participating in an activity sponsored by or on the property of the business, the planner might need a release of liability form.”
A signed release of liability waives the rights of the signatory to make a liability claim if he or she is injured. A meeting planner may not need one, but it is a good business practice to have one as part of a company’s risk management program if the meeting planner conducts a potentially dangerous activity or has substantial interaction with the public.
Another mistake planners make is not putting everything in writing. It could be a simple email recapping the conversation the planner had with the AV vendor who agreed to waive the fee for the confidence monitor. Send a quick email noting that the conversation occurred and the details to which the parties both agree.
“Some meeting and event planners don’t give their intuition enough credit. If it doesn’t feel right, it most likely isn’t. Planners need to trust their gut and always overprepare.”
— Vanessa Murray
And while a meeting planner may have asked for people to note any food allergies on the online registration form, sometimes the attendee isn’t the one registering himself or herself. When an attendee starts to have an allergic reaction during an evening gala, the meeting planner needs to have emergency procedures in place to act fast. Include an emergency contact name and mobile phone number for all attendees, volunteers and staff members upon registration check-in at the event and have a hard copy of this information handy at all times. Should this be a larger event outside a hotel, consider hiring a local EMT to be onsite during the event.
“Any loss of or damage to property, harm to people or liability for damages incurred through contractual liability could spell financial disaster to a meeting sponsor,” Foster says. “The role of insurance is to not only pay off claims, but also to provide funds for defense if a frivolous lawsuit is filed and a defense versus a settlement is appropriate. Legal fees and court costs can mount up quickly and insurance should be there to provide for peace of mind.” C&IT