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Liability Risks and Lawyers Taming Special Events?

By Craig Altschul
May 29, 2006

This taming of the game sometimes doesn't sit well with locals, those who participate most in the more "out there" kinds of special events, but it seems to play just fine in corporate offices.

"The insurance thing is just an excuse for the mountain not to do these kinds of events," John Shand, owner of Avalanche Sports in Breckenridge, Colo. told The Industry Report. "They just look at it as a waste of dollars. They might have to put a patroller over there. They don't see any monetary benefit out of it."

Shand was outspoken in the Colorado media when the resort cancelled the E-Chair Challenge, a two-year old event that was gaining steam a season ago. He complained at the time "the company is stripping the soul from the mountain." Breckenridge Corp. officials reportedly asked Shand, whose local store was sponsoring the event, to cough up $30,000 in insurance coverage to keep it going.

"They were just making up a number; they have blanket coverage," Shand said. "These resorts are just getting more and more corporate. They're getting rid of these events as fast as they can. It's a bummer."

The shovel race at Angel Fire, NM saw its 30-year run come to an end. "We looked at many different ways to make this work," General Manager Jon Mahanna said when making the announcement. "The bottom line is, if we can't host this event in the tradition that it was founded, then we have to step aside."

Walt Foley is the risk manager at Jackson Hole Mountain Resort in Wyoming. He said last week that his resort managers still like to stage events, but lean to hosting those that come from a third party.

"We definitely look at what risks or liabilities are associated with events so we look for those that are organized and sanctioned by others who carry the insurance and liability such as USSA competitions," he said.

Foley said the industry trend is to scale back what events resorts conduct. "We are all trying to push liability where we can to third parties." He said Jackson's cardbox race is now strictly for employees, as is the Jackson Hole employee 'Olympics,' and those events are covered under the company's blanket coverage. Even then, waivers must be signed. He said they generally hold up in Wyoming.

The toll on the risk-fun ratio is making its mark on the recreation industry across the board, not just in mountain sports.

John Medler is a national insurance leader who is responsible for gathering a distinctive group of industry experts together regularly to advise Y Mutual Insurance Co., a captive insurance company set up to make sure there is always coverage available for the often risky programs offered by the 21 million member YMCA movement.

"I sympathize with the ski industry," Medler, himself a long-time skier, told The Industry Report. "Insurance companies used to be able to call their own shots on whether or not to insure the YMCA's riskier activities like aquatics, camping, fitness centers, day care, and transportation. We forced their hand 20 years ago by forming a very successful captive insurance company. Now, we basically set the rates for competitors and get the coverage we need."

Medler said good coverage implies that risks are carefully managed, but "if we took the fun out of everything, who would bother to join the YMCA? Similarly, careful attention to risk is implicit in how ski resort managers operate everything, including special events. But when you are in the 'fun' business, risk is always a byproduct."

What's your take? Is the pall of insurance disasters taking too much of a toll out of what made this industry so exciting to be part of? Is it, as Shand believes "removing its soul?" Or, is over-careful risk management a fact of life today, not unlike being nervous about letting our kids play out in the front yard.

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