Organising an Event?
When and why you need events liability insurance
Most events and conferences proceed without incident, but even with the most detailed planning, sometimes things go wrong. South Africa is privy to thousands of events that take place across the country, from corporate conferences, entertainment and music fests, sponsored golf days, cycle races, exhibitions, mega parties and many other renditions of business and social gatherings.
Any such hosted event increases the number of visitors to a venue which drastically changes the safety aspects and liability implications of any public gathering. This is where anyone involved in the planning and execution of an event – whether the organiser, sponsor, advertiser or contractor – needs to familiarise themselves with the SASREA act and the implications for their business.
The Safety at Sports and Recreational Events Act (SASREA) firmly places the responsibility on all parties involved to ensure safety at events. According to Steve Levitt of insurance brokerage and risk consultants, Aon South Africa, the distinction between who is responsible is still a grey area and he believes that all parties in the chain should have their own event liability insurance cover in place.
Just one of the repercussions of an incident at an event, is the impact it can have on the reputation of all involved; which, if not handled correctly, could affect the sustainability of the business.
“Event liability insurance is a first line of defence,” says Steve, “All parties involved need to do a comprehensive risk analysis to identify all possible exposures and to ensure that their due diligence is properly managed in every aspect. Liability cover is based on negligence that needs to be proven,” he explains.
In certain circumstances the SASREA does make public liability insurance cover mandatory. In practice usually only controlling bodies and venue/stadium owners would enjoy public liability cover whilst other stakeholders would, in most instances, either not have event liability insurance or be indemnified by those who do have such cover.
“The SASREA demands that all parties involved take a pro-active approach in vetting the planning and safety of events, ensuring compliance with the SASREA. They can no longer associate their name with an event in the absence of this,” says Steve.
“Similar to the Consumer Protection Act, where consumers can seek recourse against any one of the parties in the supply chain, the SASREA enables individuals injured at events to seek recourse against any of the stakeholders in the event. It can be the sponsor, a supplier or indeed an advertiser and they can be held jointly and severally liable for any damages and civil liability,” explains Steve.
What are the implications of joint and several liability?
It is a form of liability used in civil cases where two or more parties are found liable for damages. An affected third party can seek payment of the entire judgement from any of the parties deemed to be ‘jointly and severally liable’. If any of the defendants are unable to pay the full judgement award, the other defendants will have to make up the shortfall.
Although the SASREA provides for various duties and obligations on each of the entities involved, injured parties may choose to sue any of the entities as reflected in section 4 of the SASREA whether or not there was fault on the part of that party. The burden is placed on all entities to ensure safety and responsibility at events.
“Most crucially, sponsors should also ensure that they have adequate events liability in place with an insurer who is aware of their exposure in this regard, and not rely on a standard public liability policy. A good place to start would be to provide your insurance broker with a copy of any legal contracts you have in place in terms of an event, to ensure that any provisions in your contract are not in contravention of the terms and conditions of your liability cover,” Steve explains.
There are many aspects that contribute to the proportional risk that a company could be exposed to when involved in an event. In order to have the correct limits in place, it is frugal to consider the following risk factors:
• Location – Where a venue is located, its size and safety measures incorporated into the event, play an important risk role.
• Event type – Whether it is a rock concert or a formal banquet, the type of event contributes to the risk the event holds.
• Additional structures – Temporary additions to the venue, such as marquees, podiums and stages also hold an element of risk.
• People attending – The profile of guests attending the event dictates risk measures to take, whether it’s a polo match at the Inanda Polo Club with international dignitaries or a high tea for woman’s day.
• Crowd – The capacity of the venue and the amount of people expected also plays a part.
“This is where the value of an expert broker comes to the fore, in evaluating your business exposure to a potential liability claim, ensuring that your contracts and insurance provisions are not in contravention of any clauses, and that the appropriate liability insurance covers and sums insured will adequately mitigate the risk,” Steve concludes.
With Thanks to FA News and Steve Levitt of Aon South Africa.