It is reasonable to ask whether your Club could survive a liability claim. As you probably know, there are programs available for Club insurance that includes Liability and Accident, Director's, Officer's Liability and Crime Coverage. However, if a vendor or exhibitor causes an accident at your show, and they do not have general liability insurance coverage, the Club policy likely would have to pay for any damages or medical claims resulting from an injury.
By definition, an accident is not expected, but steps can be taken to prevent one from occurring. So, as a prudent Club manager, you have:
Set up formal safety requirements with associated inspections
Purchased a general liability policy
Made sure dog owners have bite insurance
Taken steps to prevent being labeled "negligent" in the event a claim is made
Done, right?
Unfortunately, no. If you have vendors or exhibitors at your event, you may be found responsible for any injuries that they may cause. Usually when an injury occurs, everyone gets sued:
Organizer (your club)
Venue (where the event occurs)
Vendor/exhibitor
For example, in August 2011, seven people died when the main stage collapsed at the Indiana State Fair. As a result, forty-four survivors have sued the performing band. But even though the performing artist's contract specified the act had the final say on whether to cancel the concert due to weather, tort claims have been filed against the State Fair and the State of Indiana.
What to do? First, make sure your exhibitors have an up-to-date general liability policy. Check to make sure the effective date is on or before the start of your show, and that the expiration date occurs on or after the end of the show. Standard limits of coverage are:
$1 million per occurrence
$2 million aggregate
These limits of coverage provide up to $1 million for each claim (occurrence). During the term of the policy, up to a total of $2 million in coverage is provided if more than one claim is made against the exhibitor (aggregate). Second, ensure that your Club has been listed as an additional insured on the exhibitor's certificate of insurance. By doing so, this establishes a pecking order as to who pays first.
Suppose an exhibitor has been found negligent in an accident, and the injured attendee has sued the exhibitor and your Club. The injured party won and was awarded a $1.2 million settlement. In this case, if the Club is listed as an additional insured, the exhibitor's policy would pay $1 million of the settlement, and the Club would only be exposed to the additional $200,000.
Most venues where your events are held require all parties be insured, but it pays to be vigilant and check if this is the case. As always, deal with a reputable agent that only uses carriers rated "A" or better.
Don't forget, there are a lot of hungry lawyers out there!