November Compliance Coffee Talk: Managing the Risks of Special Events

Compliance Coffee Talk covers a new topic each month – RSVP for the series.

November:  “What’s so special about managing the risks associated with special events like festivals, parades, and fairs?” 

Special Events both large and small can pose a unique challenge for risk managers, and it’s often difficult to create a clear and structured approach within your program.   They’re time-sensitive, require different operational support than typical projects, can introduce unique risks that wouldn’t be relevant in other projects, and they’re often highly visible projects with extra stakeholders.

November’s session will cover the best practices, plus some specific real-world scenarios to handle, so we’ll talk about everything from Greenwich’s Town Party music festival to the local crafts fair to gazebo rentals for a corporate picnic.

Watch the full replay, or keep scrolling for a summary of some of the key insights and practical tips from the session.

Meet the Experts

• Megan Damato, Director of Risk Management @ Town of Greenwich, CT
• David Clovis, Founder @ Clovis Consultants, formerly GM @ Cal JPRMA

We’ll discuss:

• What Megan’s learned from 10 years of the Greenwich Town Party Festival
• How David approaches special events differently from other projects
• How even small events can have big risk exposures to manage
• The “Fab 4” documents that Megan requires for events of any size
• Balancing protections with pragmatism, especially for smaller mom-and-pop vendors
• Insurance exclusions that can void your coverage

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Key Takeaways

1. Early → easy.  Start setting expectations early and proactively.

Events have so many moving parts, so many stakeholders, that coordination can be especially complicated.  Start your planning meetings early.  Set expectations with vendors and other stakeholders early.  Get vendors verified early.  When time is tight and the event countdown starts ticking, everything gets more difficult.

2. Assume everything with an event will operate differently than business as usual.

Every special event is… special, and it’s easy to not recognize how different they are:  Traffic flows, operating hours, basic business operations like bringing a kiosk from the store to the sidewalk, different sites and sounds – they make events special, but everyone can be very distracted, nothing operates like normal.

Part of protection is certainly making sure everything is insured, but if you want to avoid things ahead of time, you need to assume that all your departments are going to be affected – public works, police, fire, everyone.

“Even if something is insured, if it happens on our city streets, it’s still ours.  So yes, ensure you’ve got maximum coverage, but really protecting yourself means coordination across everything, getting the key parties together and ensuring they know what’s going to happen and what’s expected of them.” – David

3. Standardize what your require for every event – The Fab 4.  (pdf below)

Here’s another trick that’s simplified expectations and streamlined the process for Megan and Greenwich:  She requires a standard four documents with each application from each sponsor or vendor – Hold Harmless Release Form, a COI form, Endorsement page listing the Town and/or Greenwich Public Schools as additional insured, and the Vendor Insurance Agreement.

And she sets very clear expectations that the Fab 4 need to be submitted at least 3 months prior to a significant event, because it usually takes some back and forth to get full compliance, and that’s always easier when done earlier.

Here’s the exact brochure that Greenwich shares with vendors, and makes sure other departments are fully aware of:  Greenwich Special Event Reference Guide.

4. For bigger events, experienced sponsors might be able to streamline coverage for smaller vendors.

This is one thing that’s made Greenwich’s Town Party festival run smoothly.  The main sponsor got a large insurance policy that could name their vendors as additional insured, which made things much simpler and smoother for many of the vendors, especially smaller vendors.  This approach doesn’t work for all vendors, such as those serving alcohol, but it can make a big difference at large events with lots of vendors.

“That was one big key to streamlining the process:  Now we’ve got all these vendors, even more than before, but they’re all listed under one policy under the sponsor, so there’s a lot less documentation, a lot less room for little things to slip through the cracks.” – Megan

5.  Watch out for any policy exclusions that could void coverage.

Alcohol being served at and event is the first one that comes to mind, but there are others.  Participant Liability is a very common exclusion that affects races, athletic events, youth programs.

“Was the person a participant in the turkey trot or the field day – often that triggers exclusions.  Make sure you know what the triggers are in your policy.” – David

“Make sure there’s not an exclusion in the policy that says “Oh, by the way, we don’t cover street fairs, or professional sports, or petting zoos, or whatever the event is, because exclusions are often there.” – Megan

6. Co-hosting an event adds liability – don’t miss that.

“When I see or hear the word “co-hosting”, that spells trouble, now that it means we own half the liability. Co-hosting events is fine, and often makes events that are good for the city possible, because the other sponsor can’t always run it, doesn’t have the infrastructure or resources, but we’ve got to be aware that that makes us own some of the liability, so now we’ve got to protect ourselves, make sure we’re named as additional insured with all these vendors.” – David

One tip from David – be picky about any signs or banners that list the city as a co-host.  Oftentimes, that will be added with good intentions from the main host, to say that both the Farmer’s Collective and the City of Stockton are co-hosts of the Strawberry Festival, but that’s the type of public evidence that can bite your in court even if you’re not actually co-hosting.

8.  Umbrella is preferred over Excess Liability

Megan and David have accepted both to be practical, but Umbrella is preferred because it’ll reach down into areas that Excess might not.

If you’re accepting excess, make sure excess is following form, picks up all underlying claims, makes sure everything gets picked up, and that there aren’t exclusions.

“I just want $5 million, or $10 million, or whatever my number is, and I don’t care how they get there as long as there’s coverage all the way through.”  – David

9. Consider a TULIP policy to help cover frequent events with smaller vendors.

There are pros and cons of a Tenant User Liability Insurance Policy, which can be used to help vendors easily and quickly purchase insurance that covers an event.

Pros:  Low-cost, are easy to do online, can help streamline operations and cover vendors that otherwise might not have enough coverage, and they’re flexible where you can really spell out what’s required for your municipality.

Cons:  Sometimes they’re venue-specific, so you might need to get one that’s flexible across venues depending on the nature of your program.  There can be a lot of exclusions, which is fine but you’ve got to know about them – fireworks, alcohol, attendance limits, etc.   They’re a narrow, specialized program, so may or may not be available with your current insurance provider or broker, so you might have to do a little extra work to set it up.

10. Always remember to be practical and focus on your most important and frequent exposures.

“We’d require coverage for smaller events like weddings and corporate picnics in the park, especially if alcohol was served, but then we started requiring it for people to reserve even just a picnic table, and that was ridiculous.  It just didn’t make sense, because there wasn’t anything at all different than anyone else using the park, so we eliminated that.”  – David

As always, let us know if there are topics or questions you’d like to see covered in future sessions.