By: Philip Cronje, Business Unit Manager of Aon South Africa’s Sports, Recreation and Entertainment Division.
Every participant in an event should have their own event liability insurance
Putting together a large-scale event takes months of planning, with the final result being the work of various contributors such as organisers, sponsors, contractors, suppliers, staff members and promoters, to name a few. And when it comes to safety at an event – whether it’s for 50 people or 5000 – the Safety at Sports and Recreational Events Act (SASREA) firmly places the responsibility on each of these parties to ensure the safety at the event.
“The distinction between who is actually responsible for safety is often blurred, which is why all involved parties should have their own event liability insurance cover in place, whether a sponsor, supplier, contractor, event owner, advertiser or events coordinator, as well as actively involved in upholding health and safety standards,” explains Philip Cronje, Business Unit Manager of Aon South Africa’s Sports, Recreation and Entertainment Division.
“The SASREA enables individuals injured at events to seek recourse against any of the stakeholders involved with the event – from the sponsor, a supplier or even an advertiser – and all can be held jointly and severally liable for any damages and civil liability. It effectively means that all parties involved in the making of an event need to be pro-active in vetting the planning and safety of events to comply with SASREA. Comprehensive risk analysis is a non-negotiable when it comes to identifying all possible exposures and to ensure that all conceivable due-diligence is done. Sponsors, as stakeholders in an event, can also be drawn into a suit alongside the event organiser, venue owner and others. It is essential that all parties take a pro-active approach to ensuring that certain minimum standards are met and ensuring compliance with SASREA,” Philip explains.
What are the implications of joint and several liability?
All parties involved in an event will be jointly and severally liable in the event of any civil liability arising at any given event. 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 judgment 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.
In the context of SASREA, although it provides for various duties and obligations on each of the entities, in the event of a disaster occurring and injury to individuals, those 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, as the SASREA has placed a burden 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 business 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,” explains Phillip.
“It’s important to speak to an expert broker who has extensive experience in dealing with events, and who can accurately and expertly evaluate your business exposure to a potential liability claim. Your broker will be key in assessing what cover you need, that any contracts and actions are not in contravention of any clauses contained within your insurance policy, and that you have the appropriate sums insured to mitigate the potential financial quantum of any liability,” he adds.
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Examples of event liability claims:
- Personal injury: Claims may be made if a person is injured during an event, such as falling on an uneven surface or suffering food poisoning.
- Property damage: Claims may be made if property is damaged during an event, such as damage to equipment or facilities.
- Third-party liability: Claims may be made if a third party is injured or their property is damaged during an event.
When selecting a limit for event liability cover, a number of factors need to be taken into account to ensure that adequate insurance coverage is obtained. Aon provides the following guidelines in setting the appropriate sum insured for your event liability cover:
· Type of event: The type of event being organised will determine the level of risk involved and, therefore, the level of insurance coverage required. For example, a high-risk event, such as an outdoor concert, will require a higher level of insurance coverage compared to a low-risk event, such as a business conference.
· Attendance: The number of attendees at the event will also impact the level of insurance coverage required. The more attendees, the higher the risk of an accident or injury occurring, and the higher the level of insurance coverage required.
· Venue: The location of the event will also impact the level of insurance coverage required. For example, if the event is held in a high-risk area, such as a city centre or near a construction site, a higher level of insurance coverage may be required.
· Legal requirements: It is important to consider any legal requirements that may apply to the event, such as health and safety regulations, SASREA and the like to ensure that adequate insurance coverage is obtained to meet these requirements.
“A benchmark for sufficient insurance coverage will vary depending on the type of event, the location, and the number of attendees. However, as a general rule of thumb, a limit of at least R10 million per occurrence is considered to be a minimum level of insurance coverage,” Philip explains.
“It is important to work with a seasoned insurance broker to unpack the risks that are involved and to put appropriate levels of cover in place that accounts for the unique risks involved. Making better decisions about your organisation’s risk exposure during an event starts by having data available that is backed by insight that will help you benchmark and make an informed decision when it comes to event liability cover that is fit for purpose,” Philip concludes.