By Barbara F. Dunn, Esq.
Meeting professionals play an integral role in managing risk and liability for their organizations. In part one of this series, we explored the various types of liability organizations must consider in connection with their meetings. This article will focus on the techniques professionals can implement to manage risk on behalf of their organizations.
The best way meeting professionals can manage a risk is to make sure the risk never happens in the first place. That means meeting professionals and their staff are ensuring the safety of their attendees before, during and after the event.
Before the event, professionals should use a comprehensive site inspection list to check the facilities to be used for the meeting. Special attention should be paid to pathways and lighting. Planners should ensure that any additional needs, e.g., extra signage or personnel, will be on hand to ensure the safety of attendees.
During the meeting, professionals should work closely with staff to ensure the safety of attendees. Often this may mean having security and personnel stationed in key entrance and exit areas to ensure a proper flow of individuals.
After the meeting, professionals should follow up promptly on any complaints of safety problems or issues. Any problems should be thoroughly investigated and then followed up with the person who reported the problem.
One of the most effective ways professionals can manage risk on behalf of their organizations is to shift risk to vendors. An example of risk shifting is indemnification. The concept is that the organization shifts risk to the party that can best control the risk. For example, if the organization is hiring a bus company to transport attendees at a meeting, the risk is that the bus will get into an accident and attendees will get hurt. In this case, the organization shifts that risk to the bus company by asking the bus company to indemnify the organization in the contract. The indemnification language states that the bus company will indemnify and hold the organization harmless (from a financial standpoint) from any claims due to the bus company’s negligence. Here’s a sample indemnification clause:
“Supplier shall indemnify, defend, and hold harmless [Organization Name], its officers, directors, employees and agents and each of them (collectively “the indemnitees”), from and against any and all claims, demands, actions, judgments, costs, and expenses, including costs of defense thereof, incurred by any of the indemnitees caused by or arising from the negligence, gross negligence, or intentional misconduct of Supplier, its officers, directors, employees, agents or contractors.”
With this clause in place, should the bus get into an accident, an attendee gets hurt, and that attendee sues the organization, the organization can invoke its rights under the indemnification clause and have the bus company hire lawyers to defend the lawsuit on the company’s behalf right from the beginning and to pay any damages awarded against the organization.
Indemnification clauses should be part of every contract as there is always the possibility that the good or service being purchased will cause harm to someone and the organization will be sued. By having indemnification in the contract, the organization knows that it will be protected in such circumstances.
One last note re: indemnification: It is important to have the organization’s lawyer draft or review each indemnification provision as this is the type of clause in which one word can make a difference in the scope of the protection.
Risk Retention (Insurance)
Another way an organization can cover its risk is through risk retention. When an organization purchases insurance, it is agreeing to “retain” the risk (up to the dollar amount of the deductible). Everything in excess of that deductible is covered by the insurance company. Let us explore some types of insurance:
General commercial liability insurance is often referred to as GCL or errors and omissions insurance. This insurance is the backbone of any organization’s insurance coverage as it protects against personal injury or death among other things. For example, if an organization is sued by an attendee who slipped and fell at a meeting, this liability insurance would cover the cost of defending the lawsuit along with paying any damages awarded against the organization.
Note that liability insurance coverage should start at $2 million. While many organizations may have $1 million of coverage, such amount is not sufficient in today’s dollar terms given the cost to defend a personal injury lawsuit.
As with the indemnification provision, it is important to have the organization’s lawyer and insurance representative involved in the review of liability insurance to ensure the organization is getting comprehensive coverage.
Release and Waivers
Another technique for shifting the risk of liability is to use a document known as a release and waiver. While not absolute, releases and waivers provide an excellent layer of protection against liability. The essence of the release and waiver document is that participants know that the activity is potentially hazardous to their health, they are electing to participate in the activity voluntarily, they release the organization from liability due to any resulting injuries, and they waive (or forgo) any claims they might have against the organization for liability. In other words, the individual is taking sole responsibility and liability for any injuries arising out of their participation in the event.
From a legal standpoint, in order to be enforceable, a release and waiver must be entered into voluntarily and with full knowledge of the potential risks associated with the event. As to the voluntary element, participants make their own choices as to whether to participate in the event and to sign the release. As to the knowing element, participants must be made aware of the potential dangers associated with the event beforehand so that they can sign the release with full knowledge. When a document meets these elements, protection from liability is extended to the organization for injuries inherent to the activity (e.g., getting hit by a golf ball during a golf tournament). If the injury is caused by something other than an inherent risk (e.g., a meteor falling out of the sky while someone is golfing), the protection may not apply.
Organizations should consider adding a release and waiver to their meeting registration materials in order to address this area of potential liability and shift the risk of liability to the individual participant.
For each meeting – no matter how large or small – meeting professionals should work to both identify the potential source of liability for such meeting and to implement techniques for managing such liability.
Barbara Dunn is an attorney and partner
with the law firm of Howe & Hutton,
Ltd. She can be reached at [email protected]
com or (636) 256-3351.