QUESTION: A group of friends and I plan to host a session [party] on Easter Monday. We have rented premises in the Corporate Area. We will supply food, liquor and other drinks. Waiters and bartenders will be contracted. We expect to sell about 1,000 tickets. We have not bought any insurance for the sessions we have held since we started over the last three years. What would you suggest that we buy?
K.B., Kingston 7.
Answer: I do not plan to tell you what types of insurance to buy. There are three reasons for this. In the first place, I do not have enough information about your planned 'session' to do so. Secondly, transferring risks to an insurer is only one of many ways to handle risks. You and your friends have been using the self-insurance method since 2001. Thirdly, I believe that you are putting the cart before the horse.
BETTER APPROACH
A better approach, in my opinion, is for you and your advisers to analyse your risks and then decide - given the dynamics of the market - on the best mix of strategies to use. Party organisers, like other business persons, face a variety of risks. Some are insurable and others are not. The risks which are specific to your line of business range from event cancellation due to adverse weather and other causes, terrorism or sabotage, non-appearance of artistes, crime and injury to patrons and their property. This is just a sample. I am sure that you can think of many others that can result in loss of income. Given the limits of space and time I will deal only with the last group. Most persons who host public events tend to pay little or no attention to it.
Occupiers of premises have an obligation to take 'reasonable care' to make their places 'safe' for visitors. That duty is imposed under the Occupiers' Liability Act, 1969. The duty of care involves taking steps to ensure that visitors are 'reasonably safe in using the premises for the purposes for which they were invited.'
Legal experts say that the duty is very onerous. Unsafe conditions should be fixed. Persons who suffer injuries due to unsafe conditions can sue the owner or occupier. Because of this statute and common law you will be exposed to claims from persons who suffer injuries at the session. Third party claims can run into millions of dollars. Recently, for example, our courts awarded $3.5 million to a garbage man who lost both legs in an accident. If several 'middle-class' professionals were affected in one mishap, you could be talking tens of millions. This is one reason why I fail to understand how promoters have not banned the practice of the lighting of aerosol cans at their shows. Bear in mind also that the size of the claims will be much higher if foreigners - primarily North Americans - were to be injured. Finally, persons in the tourism sector will tell you that this is an area of growing concern.
The local market for liability insurance for sessions and stage shows is not well-developed. Insurers have tended to deal only with the usual types of businesses. Also, persons in your industry have an 'image' problem. Managers of talent or events are seen to be of a lesser breed. Counterparts in industry, commerce, the professions or the public sector are of a higher pedigree. The net result is that most insurers tend to shy away from events like yours where the quality of management is an unknown quantity.
The key to getting insurers to look at your session is to find a good broker. He, or she, will sit down with you and your partners. They will review your plans, experience, business and accident history in detail. Accident prevention, steps to deal with emergencies, compliance with your duty under the Act and security measures should also form part of the discussions. The trick is to leave little to chance and convince prospective insurers that you and your friends know what you are doing.
Cedric E. Stephens provides impartial advice on risks and insurance. If you need free information or advice to solve a problem, write to The Financial Editor or, contact Mr. Stephens directly at aegis@cwjamaica.com
