Contracts: Who Needs Them? Who Reads Them?

Gaetana De Angelo
May 2018

Each year, the ACA Insurance Committee holds a Roundtable with many of the camp industry insurers and brokers in conjunction with the American Camp Association National Conference. The 2018 Roundtable was great success on many levels. The enthusiasm and support from our camp insurers as risk champions of the camping industry was evident with their willingness to share and help shape a safer camp experience for everyone.

Using the claims trends from 2017 as a basis for discussion, this article will examine how paying close attention to contracts and agreements will help manage and mitigate our risks when faced with a loss or potential loss. Above all, it is important to talk with your broker or insurer and be sure you understand the coverage that you have, and that you have the coverage that you need based on your own appetite for risk and ability to finance a loss. Consider them a partner in your risk management plan.

A contract is a written or spoken agreement used to enter into a formal and legally binding agreement. On an almost daily basis, each of us must deal with all types of contracts and agreements; some are verbal, but increasingly most are written. Did you know that your insurance policies, employment agreements, and camper applications and materials are contracts? They are used to outline the expectations of the parties involved.

Not surprisingly, there were some huge impacts from the weather last year. Major flooding, wild fires, and wind storms took a devastating toll on countless communities, many of which included local camp facilities. If you were impacted, would your insurance policy response as you think it will.

Here are some things to consider:

  • Flood insurance. Flood insurance is available to everyone regardless of flood zone. Evidence from the past year has shown us that areas that are traditionally not considered in flood zones took a beating this year from flooding water, and many of these people did not have flood insurance. Flood insurance is triggered whenever flooding water is present — this could be from hurricanes, a heavy downpour, or after ground-soaking rain for days that causes mudslides, or possibly water main breaks.
  • Fire, windstorms, and lightning. Insurance and preventative measures can help to reduce losses associated with these perils. Defensible space is generally considered an area that is safer from fire due to modifications; for example, a dining hall or cabin with sprinklers installed or trimming trees and other fuel located outside of buildings. Consider if you should install lightning detectors in some locations to potentially prevent damage to electrical infrastructure of camp.
  • Business interruption insurance. Keeping the same issues in mind that we just discussed, do you have the appropriate insurance coverage to cover the interruption of your business? Many policies include a minimal amount; however, it is critical to understand how and when it responds. There are two types of coverage: on-premises (when something happens on your property) and off-premises (when something happens near your property that impacts your property). What triggers each coverage may vary from policy to policy and it is important to have this conversation prior to being evacuated due to a forest fire off-site, which blocks access to your camp.
  • Expect some rate increases and, in some cases, a loss of or diminished coverage if you were in a severely impacted area with repeated hits. Don’t wait for your renewal to ask questions about what your insurance contracts cover — start early.

In 2017, there were several claims related to abuse, molestation, and bullying. Each of these are highly emotional situations that impact more than just the victim. How can you be sure that you are prepared for a claim?

Here are some things to consider:

  • Many abuse claims are reported years after they occur, often when the child has reached adulthood. Did you know that often the insurance policy that responds is the one that was in place when the alleged abuse or molestation took place? Do you know where these policies are stored?
  • With the very public focus on sexual abuse related to the #Metoo movement, we can expect to see more claims from incidents which occurred years ago as well as more recent claims overall.
  • Bullying claims, both in person and via social media, are of concern. Incident reporting and addressing the claim immediately is vitally important to help manage potential loss. We have policies and procedures and many of us have zero bullying policies — are we enforcing them?

Having good policies and procedures and talking with staff and campers about appropriate boundaries should help to eliminate some of the issues. Encourage staff and campers to report anything that doesn’t seem right or appropriate. Investigate and act on the findings.

Activities we offer at camp are often the driving force for camper enrollment. Have you discussed any potentially new program offerings with your insurer to determine coverage? Don’t wait until your provider comes to you indicating they saw you had a (insert your newest, greatest activity here) when they were reviewing your website.

The claims and discussions related to activities focused on a variety of areas:

  • A dry drowning, which was initiated with horse play in the pool. The group of campers were asked to exit the pool, which they did. Within 20 minutes, one succumbed to drowning while on the pool deck.
  • There were several ropes course claims again this year. Supervision, training, and vigilance is critical.
  • Do you have playgrounds at camp and are you aware of any laws governing public playgrounds that you may be required to follow? Check your state, as many camp playgrounds are considered “public facilities” even if on private property.
  • Do you transport and set up any activities that might be considered amusements (such as inflatables or portable climbing walls)? If you travel across state line with these amusements, it is important to know and comply with the regulations in each state you will be visiting and using them.
  • The use of drones continues to increase, yet there are many perils that can accompany their use. This includes property damage, trespass issues, and personal injury to name a few. While you might use them for programming or to video your property, others use them for different reasons. How about parent use of drones to video opening or closing day? What might start off as a single incident can quickly grow. Who is responsible if something happens?

As the use of technology and social media grows, so do the concerns and the claims:

  • Social engineering continues to expand, so training all staff of your policies and procedure related to the opening of emails, links in emails, etc. continues to be important. In one situation, an employee responded to an email supposedly from the CEO related to the request to transfer a large summer of money. The staff member complied, and it was then realized it was a “fake” email. A simple method to help eliminate this from occurring is to require a verbal confirmation before transferring any money to ensure it is legitimate.
  • Insurance providers continue to see ransomware attacks with the amount being demanded between $10,000 – $50,000 to release your data. If you have cyber coverage, don’t forget to make a claim. Providers are also experiencing IT departments (often of one) trying to resolve the attack vs. asking for assistance. Often, while a repair might be 95 percent, much of the evidence trail is destroyed, which can possibly void the insurance contract.
  • If you provide camp staff with a debit card, request they use it in credit card “mode” if possible. This method often provides greater security. It is also suggested to implement a method by which the card provider can immediately contact the user to verify potential fraud.

Other claims that were mentioned:

  • Auto claims related to backing up into things — trees, buildings and other vehicles continue to be an issue. There was also a rise in claims from rental companies when a camp did not report and/or were not aware of to damage to the rental vehicle. If you drop off your vehicle after hours, consider taking photos of the vehicle to verify the condition in which it was returned.
  • With respects to insurance coverage, one of the greatest concern is for liability coverage. What does your enrollment contract say about personal property of campers and what is the expectation of your parent’s? Example: Fire burns the cabin and the camper’s equipment is lost. What to do? Most basic camp policies require loss to go through homeowner’ policy unless a camp purchases this coverage as additional coverage. The same hold true for staff property.
  • As more camps are “doing the work themselves” and have staff operate various types of larger equipment (backhoes, cherry pickers, skid steer), it is important to educate yourself on what and how OSHA regulations apply. What fall protection might be needed? Providers are seeing an increase in claims due to accidents.
  • While not mentioned specific to any claim, all providers stress the importance of working with your local authorities related to active threats.

A few final words related to contracts:

  • Having a contract for work to be performed is important — even if you are doing a “trade for services.” Clearly spell out the expectations of each party involved. Who pays if accidental damage is done?
  • Insurance providers have continually shared for contracts to specifically state what insurance is required; what are the required limits, who should be named additionally insured? All providers agreed that a camp should require insurance from a third party/vendor.
  • The importance of having a contract with rental groups (all types and those serving all ages — including adult camps) is something that has been stressed each year. Clearly articulating who provides what and who is responsible for what is critical.
  • Ask your insurance provider to review your contract. Most are willing to review and comment. They might see the gaps of which you aren’t aware.

It is important to consider your insurance provider as a partner and not your adversary. Talk with them before the summer and review your policies to make sure they are the best you can do with what you can spend. They can be a great resource.

Gaetana De Angelo is the director, risk & business operations for the Girl Scouts of Atlanta and has served as the chair of the ACA Insurance Committee for several years.

Photo courtesy of Wisconsin Youth Company, Inc., Madison, WI

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