Transcript Event Insurance

EVENT INSURANCE
By Ian Stack
Action Entertainment Insurance
(a Division of Action Insurance Brokers)
TOPICS
• Types of Insurances Available to Event Organisers
• The Importance of Risk Management
• Public Liability - Why is my premium so expensive?
• Tort Reform
• Indemnity Agreements - Be Careful What you Sign
• Benefits of Using an Insurance Broker
Types of Insurance
• Public/Products Liability
• Professional Indemnity
• Cancellation & Abandonment
• Workers Compensation
• Equipment Insurance
Public/Products Liability
SUMMARY OF COVER:
To indemnify the Insured (Event Organiser) for their legal liability
to compensate third parties (injured person/s) for personal injury
or damage to their property, where such personal injury or
property damage arises from the Insured’s negligent
actions.
Principal Exclusions (summary)
CLAIMS ARISING FROM:
• INJURY TO EMPLOYEES (WORKERS COMPENSATION)
• USE OF REGISTERED MOTOR VEHICLES
• USE OF WATERCRAFT (LENGTH LIMITS APPLY)
• USE OF AIRCRAFT
• PROFESSIONAL NEGLIGENCE
• CONTRACTUAL LIABILITY
.
Common Misconceptions
THE VENUE HAS THEIR OWN LIABILITY INSURANCE
THEREFORE I DON’T NEED TO TAKE OUT COVER.
MY POLICY COVERS MY CONTRACTORS.
I DON’T NEED COVER AS THE COMPANY THAT HAS
CONTRACTED ME TO ORGANISE THE EVENT HAS TAKEN
OUT INSURANCE ON THE EVENT.
PROFESSIONAL INDEMNITY
SUMMARY OF COVER
CIVIL LIABILITY CLAIMS ARISING FROM THE CONDUCT OF
INSURED’S PROFESSIONAL BUSINESS PRACTICE.
•
BREACH OF PROFESSIONAL DUTY
•
DEFAMATION
•
LOSS OF DOCUMENTS
•
DISHONEST OR FRAUDULANT ACTS OF AN EMPLOYEE
•
UNINTENTIONAL INFRINGEMENT OF COPYRIGHT LAWS
•
SOME BREACHS OF THE TRADE PRACTISE ACT
Principal Exclusion (Summary)
• PUBLIC/PRODUCTS LIABILITY CLAIMS
• CRIMINAL ACTS BY THE INSURED
• OVER-RUNNING OF BUDGET
• PERSONAL INJURY OR PROPERTY DAMAGE CLAIMS
Cancellation/Abandonment
SUMMARY OF COVER
CANCELLATION, ABANDONMENT, POSTPONEMENT OR
INTERRUPTION OF EVENT CAUSED BY AN INSURED PERIL:
• DAMAGE TO VENUE
• DELAY IN TRANSPORT (vehicle breakdown, airline strike etc)
• ADVERSE WEATHER CONDITIONS (outdoor events)
• NON-APPEARANCE OF PERFORMER / GUEST SPEAKER
Principal Exclusions (Summary)
• SHORT FALL IN ATTENDANCE
• CANCELLATION DUE TO CONTRACTUAL PROBLEMS
• TERRORISM
Workers Compensation
• COMPULSORY INSURANCE FOR ALL EMPLOYERS.
• MAY NEED TO TAKE OUT WORKERS COMPENSATION FOR
SOME CONTRACTORS AND SUB-CONTRACTORS.
• POLICIES MAY BE REQUIRED IN EACH STATE OF AUSTRALIA.
Equipment Insurance
COVERS LOSS OR DAMAGE INCLUDING THEFT, FIRE,
WEATHER PERILS, MALICIOUS DAMAGE AND TRANSIT
DAMAGE.
RECOMMENDED IF YOU ARE HIRING OR BORROWING
EQUIPMENT FOR YOUR EVENT.
RISK MANAGEMENT
RISK is the chance of something happening that will have an
adverse effect on the organisation or individual.
RISK MANAGEMENT is the process of planning, organising,
leading and controlling the activities of an organisation in order
to minimize the adverse effects of accidental losses on that
organisation at reasonable cost.
Five Basic Risk Management Steps
RISK INDENTIFICATION
RISK QUANTIFICATION
RISK AVOIDANCE
RISK CONTROL
RISK FINANCING
Risk Identification
• NEED TO ESTABLISH THE SERIOUSNESS OF THE PROBLEM.
• NEED TO ESTABLISH THE EFFECT THESE RISKS COULD HAVE
ON THE ORGANISATION.
• PROCESS INVOLVES:
- Interviewing management
- Inspecting sites
- Analysing flow charts
- Reviewing past claims history
Risk Quantification
MEASURING THE EXTENT OF THE PROBLEMS THAT COULD
RESULT FROM A RISK HAPPENING.
MEASURING LOSS FREQUENCIES AND LOSS SEVERITY.
METHODS INCLUDE:
- Statistical analysis
- Review of layout of event site
Risk Avoidance
• DECIDE NOT TO PROCEED WITH THE EVENT TO ENSURE
THE RISK WILL NOT OCCUR.
• ELIMINATE THE HAZARD CAUSING THE RISK.
• CONTRACT THE RESPONSIBILITIES OF THE RISK TO
OTHERS.
Risk Control
IMPLEMENT PHYSICAL RISK CONTROL MEASURES:
- Better fire protection
- More security guards
Risk Financing
INSURANCE
PUBLIC LIABILITY - Why is my
Premium so Expensive
MAJOR PRESSURES ON LIABILITY INSURANCE:
• ATTITUDE OF SOCIETY - If something happens, someone
pays.
• CHANGES TO REGULATIONS COVERING LAWYERS - No Win,
No Pay.
• COURTS & LEGISLATION - Joint & Several Liability.
• INCREASING NUMBER OF CLAIMS & CLAIMS COSTS Between 1998 - 2000 public liability claims increased from
55,000 to 88,000 - a 60% jump. Created a shortfall of $960
million.
(Cont.)
• LIABILITY INSURANCE IS ‘LONG TAIL BUSINESS’ - In 1994
the combined insurers loss ratio was 42% and in six years this
increased to 121%.
• PROLIFERATION OF HIGHER RISK RECREATIONAL
ACTIVITIES - often undertaken by people who do not have
the appropriate level of fitness for that activity.
• COLLAPSE OF HIH INSURANCE - had a large share of the
liability market, reduced the financial capacity of the insurance
industry to provide liability insurance.
• TERRORIST ATTACT - SEPT 11 - the biggest insurance payout
in history. Increased insurance costs across the global market.
Reduction in capital and increased premiums.
(Cont.)
• INSURANCE TAXES - stamp duty, GST, Fire Service Levy.
• REDUCED INVESTMENT INCOME - Insurers are loosing money
on their non-insurance investments and looking to their core
business activities (insurance premiums) to raise revenue.
• LACK OF COMPETITION IN THE AUSTRALIAN MARKET mergers of major insurers, withdrawal of international insurers
from the Australian market, Australian Insurers withdrawing
from writing certain classes of insurance.
TORT REFORM
NEW SOUTH WALES - Civil Liability Act 2002
• Maximum amount of damages that may be awarded for noneconomic loss is $350,000.
• Maximum costs that may be recovered for legal services on
personal injury claims up to $100,000 are to be capped:
- a plaintiff - fixed at the greater of 20% of the amount
received or $10,000
- a defendant - fixed at the greater of 20% of the amount
sought by the plaintiff or $10,000
(cont).
• Solicitors and Barristers are prohibited from providing legal
services on a claim for damages unless they reasonably
believe that the claim has reasonable prospect of success.
• A person does not owe an injured person a duty of care to
warn of risks that a reasonable person would consider
obvious.
• Waivers
• Intoxication - A court may only award damages to an
intoxicated person for death, injury or property damage if the
death, injury or property damage would have occurred if the
person was not intoxicated. The intoxicated person is
presumed to have been contributorily negligent to a degree of
25% or greater.
(cont).
• Good Samaritan
• Volunteers
• Apologies
• Structure settlements
• Limitation periods
INDEMNITY AGREEMENTS
• OTHERWISE KNOWN AS ‘HOLD HARMLESS’ CLAUSES OR
CONTRACTUAL LIABILITY.
• DEFINITION - WHERE ONE PARTY ASSUMES THE LEGAL
LIABILITY OF ANOTHER PARTY UNDER THE TERMS OF A
CONTRACT (CONTRACTUAL LIABILITY).
• COMMONLY FOUND IN VENUE HIRE CONTRACTS,
AGREEMENTS WITH COUNCILS OR GOVERNMENT
INSTITUTIONS, EQUIPMENT HIRE AGREEMENTS.
Indemnity Agreements & Their
Effect of Public Liability Insurance
• CLAIMS ARISING FROM LIABILITY ASSUMED UNDER
CONTRACT ARE EXCLUDED UNDER PUBLIC/PRODUCTS
LIABILITY INSURANCE POLICIES.
• POLICIES CAN SOMETIMES BE ENDORSED TO NOTE
SPECIFIC INDEMNITY AGREEMENTS, SUBJECT TO INSURER’S
APPROVAL.
• LIABILITY CRISIS HAS MADE INDEMNITY AGREEMENTS
ALMOST IMPOSSIBLE TO INSURE FOR - INSURERS DON’T
LIKE COVERING OTHER PARTY’S NEGLIGENCE.
Indemnity Agreements - Solution
• AVOID SIGNING THEM !
• IF UNABLE TO AVOID THEM, TALK TO YOUR INSURANCE
BROKER ABOUT HAVING THEM NOTED ON YOUR POLICY.
• CONSIDER ‘INTERESTED PARTY’ ALTERNATIVE
WHY USE AN INSURANCE BROKER
• ACTS AS AN AGENT FOR THE INSURED, NOT FOR THE
INSURER.
• NOW SUBJECT TO THE NEW FINANCIAL SERVICES ACTS strong focus on consumer protection.
• NOT ONLY ORGANISES INSURANCE BUT ADVISES YOU ON
HOW TO MANAGE ALL OF YOUR RISKS, REDUCE EXPOSURES
IN ORDER TO KEEP INSURANCE COSTS DOWN.
• SPECIALIST BROKERS FOR NICHE INDUSTRIES