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Reduce your chance of an accident claim by properly managing the factors you can control.
By Holly O’Dell
Tented event professionals often deal with uncontrollable factors — chairs breaking, vandalism, customers abusing products and, of course, weather. However, tent professionals can be smart about accounting for more controllable elements, such as knowing where a site’s underground lines are, properly training employees and hiring a knowledgeable insurance representative. Here are some ways that companies can mitigate common risks.
Get representation
Hire an insurance rep who’s an industry specialist. Because of all the potential problems that can occur, the tented event industry is considered high-risk. As such, premiums and deductibles can be higher than for other industries with fewer hazards. Beyond cost is another important factor: the need for an insurance representative who knows all about rentals.
“It’s helpful to have an insurance company that understands the relationship between a renter and rental company,” says Maura Paternoster, risk manager for ARA Insurance Services in Kansas City, Mo. “Adjusters are going to know to tender claims to the renter based on the rental agreement, and they’re going to hire attorneys with experience defending rental companies in the event of a serious accident.”
In fact, insurance companies that aren’t familiar with industry nuances can do more harm than good. “I recently got a call from someone who found out the policy they’ve had for the last few years does not cover tents on premise or off premise,” says Matthew Davis, a regional manager for National Insurance Specialists, headquartered in Toledo, Ohio. “I hear that all the time. Standard coverage isn’t good enough for the rental industry. You have to be covered for things like transportation and fraud.”
Not only is the representative’s industry knowledge important, but so is accessibility. “Make sure that if you do have a problem that you can contact them any hour of the day,” advises Steve Kohn, Miller’s Rentals, Edison, N.J. “Make sure you have a cell number, because sometimes you need to get a hold of them outside of business hours. The last thing you want if there’s a problem is to get on the phone and hear, ‘If you need to speak to someone, press 6.’ Comfort is a great feeling in this business, knowing there’s someone to count on when something goes wrong.”
Keep good records
Maintaining documents and files on all clients can protect rental companies in the event of a claim. “I always recommend that people keep copies of rental agreements for five years because, on average, that’s the statute of limitations for bodily injury or wrongful death,” Paternoster notes. “You should also keep the original paperwork that comes with the tent you purchased. Don’t throw away the manufacturer’s manual or instructions for installing it until you get rid of the tent, and even then I would still keep the documentation five years after that.”
Additionally, Paternoster recommends that rental companies maintain specs and diagrams from all events for five years. Miller’s Rentals, for instance, uses CAD to lay out all its jobs. “We keep those on file so we know the exact location of the tent,” Kohn says.
Kohn also takes digital photos of every event, a practice that has proven valuable. “We had installed a tent for a furniture store that was having a big sale,” he recalls. “Apparently one of the people at the sale tripped on a stake. The customer tried to sue us, saying that the stakes weren’t put in the ground properly. Fortunately, we had photos of the entire job. We had proof that everything was done the way it was supposed to be. The case never went anywhere.”
Get it in writing
Protect yourself with definitive rental agreements. A well-written rental agreement can protect a rental company from smaller claims. According to Davis, 30 percent of rental companies don’t use a rental agreement. “People will use standard purchase orders and think that they don’t need a rental agreement,” he says. “I will not even give someone [an insurance] quote that doesn’t use a rental agreement. If a claim happens on someone’s property and they or a guest get hurt because of the tent, the rental company has no limitations on their responsibility without a rental agreement.”
Insurance agents recommend that a solid agreement has a hold harmless and indemnity clause. “That means that the renter will hold the rental company harmless for accidents and indemnify them, meaning they’ll pay for any damage or accept responsibility,” Paternoster explains.
Lisa VanMeter, co-owner of Rental City in Vineland, N.J., learned just how useful a well-executed rental agreement can be when a client cut all 12 sides of a tent with a razor blade to let air into the structure. “When our men got there to take down the job, they immediately called the office and told us what was going on. They took pictures and brought the equipment back,” VanMeter recalls. “We got in touch with our client and told them that all our sides were cut up. In our rental agreement, it states that something like this is intentional damage.” The client agreed to pay for the damaged tent, but that’s not always the case. “Most of the time, you have trouble collecting on that and have to go to small claims court,” VanMeter adds.
Although a hold harmless and indemnity agreement can protect against smaller incidents, the clause may not prevent a lawsuit in the event of a serious injury or fatality. “The idea behind a rental agreement is to nip [a claim] in the bud,” Paternoster notes, “but when we have someone who is severely injured or even someone who dies as a result of a tent coming down, the rental company is probably going to be named in a lawsuit.” It is for these more serious incidents that every rental company needs a solid insurance policy.
Put safety first
Implement a thorough safety training program. In the tent-rental business, safety is everything. Not only should employees undergo a comprehensive training program, owners should document the event as well. “The reason the written part is so important is so you can prove to your insurance company that you have a safety program in the event of a workers’ comp claim,” Davis said. “The employee may say the business doesn’t have a safety program, and the owner can show that the worker did, in fact, sign off on it.”
At Rental City, the owners have implemented what they call an internal rental school each April. “We close the store for a whole day and go through driver safety, tent safety, how to properly stake a tent (and what happens when you don’t), forklift safety, warehousing and so on,” VanMeter says. “Our trained people that have been with us for five or six years show the new guys what to do. It refreshes them as they get ready for the season, plus it helps out the new employees before we put them in a truck and send them out to the real world.”
As an additional precaution, VanMeter and her husband, Doug, conduct pre-employment drug and alcohol testing and randomly test current employees. They also make sure that each prospective employee gets a physical. “We feel very strongly that we want all our employees clean of drugs and alcohol,” VanMeter notes. “From a physical standpoint, we want to make sure they didn’t have prior injuries from another job. If they get hurt on the job, your workers’ comp insurance can go up because now you’re paying out a lot of medical expenses for employees that maybe shouldn’t have been working for you in the first place.”
Be upfront with customers
Educate — and communicate with — your clients. By being upfront with customers from the beginning of the process, event planners and rental stores can eliminate headaches down the road. Stacy Stern, president of The Special Events Group in Boca Raton, Fla., recalls one incident where her persistence with a client paid off. Stern always insists that her clients notify their insurance company about their event and to add a rider, additional insurance covering a specific event. She had difficulty persuading one client to get the rider (which most insurance companies will add at no charge) for a major event, but eventually the client did so.
It turns out it was one of the best decisions the company ever made. An elderly man, who was hired as a temporary server by the hotel where the event took place, entered a room where no employees were permitted and allegedly tripped, fell and dislocated a shoulder. Though no one had witnessed the accident, the hotel covered the claim. “Six weeks later, I receive a call from my client saying that this person was suing them,” Stern recalls. “This was the first time I had even heard of the accident. My client immediately goes into a panic, and I said, ‘Do you remember that conversation we had about putting the rider on the event?’ So they were covered.”
Do your homework
Do a site check, and always call before you dig. Any rental company that has struck an underground line or a sprinkler head while staking a tent will tell you how important it is to check the site before the event and to contact the Call Before You Dig hotline by dialing 811. “Several years ago, we were doing a corporate event that was at a venue quite a bit away from us, and the client took the responsibility that she was going to have the site marked out,” VanMeter says. “It wasn’t quite marked out the way it was supposed to be when we got there, and one of my guys put a stake right through the fiber optic line that runs communication services to the corporation there.”
Now, Rental City will never do a job before first calling 811. “It’s good to take that extra precaution,” she says. “Number one, it makes your client feel like you’re professional. Second, it protects your employees. And third, it is the law.”
Be proactive
Submit all claims to your insurance company, even if you’re not to blame. “One of the most common errors is the conception that a rental company is not at fault, so they think they don’t need to tell anybody about an accident,” Paternoster says. “If you don’t notify your insurance company, the adjusters lose the opportunity to collect information while the facts are fresh in people’s minds, and the evidence is still there. When you report an accident right away, your insurance company can investigate, collect data and keep documentation, and if nothing comes of it, the claim is closed. If someone files suit two years later, we can reopen the claim and defend you based on the information we collected.
“The other reason it’s important to at least notify your insurance company of an accident is that your policy says you should,” she adds. “If you don’t do that and the situation is serious enough, it could jeopardize your coverage. You don’t want to be hanging out on a limb with a lawsuit against you and then have to hire your own attorney to defend you.”