Facility and Event Risk Management

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Facility and Event Risk Management

• Gary Rushing, Ed.D. John Miller, Ph.D.

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Risk Management Defined

• A strategy that identifies those situations in
  which legal or financial difficulties may arise
  and then implements corrective actions that will
  either eliminate the exposure, significantly
  reduce the chances of the situation from
  occurring or that reduces the impact of the
  happening should it occur.

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Risk/loss Defined

• Risks are viewed broadly as physical injury or
  death, potential litigation, and financial loss
  (Jensen Overman, 2003) and can
• Occurrences that expose a provider to the
  possibility of loss. Thygerson (1986) vander
  Smissen (1990).
• To eliminate all risks of harm would remove the
  challenge and fun associated with most sports

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Benefits of a Risk Management Program

• Increases the safety of the patrons, reduces the
  losses to the organization and increases
  effective use of funds.
• Serves a deterrent to a lawsuit and demonstrates
  intent to act in a reasonable and prudent manner.
  
• Significantly enhances the achievement of goals
  and the mission of a facility.

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RM Manager

• Someone should be designated as the Risk Manager.
  To oversee the development and implementation of
  the RM program,

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RM Committee

• A RM committee is needed to help provide guidance
  and oversight of a RM program.
• The ideal committee should be composed of experts
  in insurance, law, and have representation from
  the various units in the facility.

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Risk Categories

• Most loss exposure can be categorized in one of
  five general areas.
• These include
• I) Public liability caused by negligence,
• 2) Public liability excluding negligence,
• 3) Business operations and
• 4) Property exposures.

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Public liability caused by negligence.

• Failure on the part of the owner/operator to
  manage a facility in a reasonably prudent and
  careful manner and this failure results in damage
  to the plaintiff.

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Public Liability Excluding Negligence

• Circumstances in which facility personnel cause
  harm to patrons, fellow employees or volunteers
  in ways other than negligence.
• Tort law provides an avenue for people to be
  compensated for damages caused by these injurious
  situations.

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Business Operations.

• Business operations include, business
  interruptions, employee health, theft,
  embezzlement, and contact disputes.

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Property Exposures.

• This category consists of risk exposures to
  equipment, buildings, and grounds as a result of
  fire, natural disasters (earthquakes, floods,
  blizzards, hurricanes, tornados),
  vandalism/terrorism, and theft.

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Risk Management Program Development Steps

• Steps In Risk Management
• 1.Identify applicable areas of concern
• Public liability excluding negligence
• Business operations
• Property exposures
• Public liability caused by negligence
• 2. Identify specific risk exposures in each
  category
• 3. Estimate the probable impact of the risk and
  classify
• 4. Select the optimum method of treating the risk
• 5. Implement a plan to carry out the selected
  method, monitor and evaluate.

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Step One Identify applicable areas of concern

• The first step in developing a RM program is to
  determine the areas or categories of risks
• Public liability caused by negligence,
• Public liability excluding negligence,
• Business operations,
• Property exposures and terrorists)
• more specific categories
• accidents, security, contracts, personnel,
  financial, natural disasters, speculative risks
  (strikes), terrorists threats, design and
  construction, etc.
• The purpose of selecting the areas of concern is
  to provide risk reviewers with a reference for
  brainstorming and finding more specific risk
  exposures.

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Step Two Identify risk specific exposures in
each category

• Do a risk inventory and compile a list of
  specific hazards in each category.
• Effective research must be done utilizing
  interviews with pertinent personnel, loss
  analysis questionnaires, physical site
  inspections or business plan reviews.

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Step Three Estimate the probable impact of the
risk and classify

• Assess each risk on the risk master list and
  estimate the level of loss that each risk
  occurrence may impose
• Assessment tools in the form of frequency and
  severity matrixes can be used.
• Frequency is how often the risk could occur
• Severity is degree of loss resulting from the
  occurrence.

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Step Four Select the optimum method of treating
the risk

• Apply a strategy that will appropriately control
  the loss resulting from the risk occurrence.
• Controlling the loss of assets is the goal of
  Risk Management

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Four Ways to Control Loss

• 1. Avoidance
• 2. Retention
• 3. Transfer
• 4. Reduction

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Avoidance.

• Entails avoiding or abandoning activities that
  have a loss potential that is too great
  (catastrophic or high loss) and non-essential to
  the mission of the venue.
• Examples
• removal of trampoline competition at high school
  gymnastic competition or not booking unruly rock
  band that is known to create serious problems.
• Since risks are the spice of physical activity
  eliminating all serious risk would significantly
  alter the face of competition.

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Retention.

• Retain the risk and prepare for potential loss
  through budgeting, deductibles or self-insurance.
  
• Some situations or activities are
  inconsequential, uninsurable, non-transferable,
  or the cost of insurance is prohibitive.

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Transfer

• Shifting the loss to another person or entity
  contractually or through insurance.
• Ways to Transfer
• Insurance. Insurance is an excellent way to
  control for.
• Use of waivers or releases.. contracts that
  relinquish the right of patrons to sue for
  ordinary negligence.
• Independent Contractor. a person or business that
  agrees to perform a specific job for a facility.
• Indemnity Clauses. agreements that hold
  owners/landlords harmless for any negligent acts
  or omissions by rental groups or independent
  contractors such as venders, or concessionaires

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Reduction .

• Employing prudent practices that will eliminate
  or reduce the effects of risk occurrences.
• Examples hiring qualified personnel, educating
  and training them effectively, selecting
  appropriate venues, abiding by all laws and codes
  and implementing standard operating procedures
  for all significant risks.
• Most effective when performed in conjunction with
  transfer and retention

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Risk reduction for Public Liability negligence

• There are myriad of ways to increase safety and
  decease public liability risk exposures related
  to negligence.
• The following are examples
• know legal obligations as an owner of property
  versus a renter or leaser of property.
• meet local, state, regional and federal code
  requirements.
• develop regularly scheduled inspections of the
  facility (floors, ventilation, restrooms,
  equipment, food preparation areas, toxic
  materials deposal, and security).
• regularly schedule maintenance with safety
  concerns given priority
• monitor visitors for security

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Examples Continued

• supply emergency/crisis plans for natural
  disasters and terrorists exposures such as bomb
  threats
• hire or select qualified personnel
• supply appropriate signage, provide proper
  supervision and insure proper transportation.
• adhered to Dram Shop Laws related to the alcohol
  sale

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Risk Reduction for Public liability excluding
negligence

• Facility personnel can cause harm and expose the
  facility to loss though illegal searching of
  patrons, false imprisonment (retaining patrons),
  improper employment practices, sexual harassment,
  assault/ battery, invasion of privacy and
  professional malpractice.
• Each of these areas should be evaluated for
  exposure and proper policies and procedures
  developed to mitigate them.

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Improper Employment Practices.

• Risk incidents allege some form of discrimination
  in employee recruitment, hiring and firing,
  evaluation, promotion, transfers, salary etc.
• Employers must develop appropriate policies that
  counter these problems and require employees to
  abide by them.

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Sexual Harassment

• Sexual harassment is a form of sexual
  discrimination that violates Title VII of the
  civil rights Act of 1964 and Title IX of the
  Educational Amendments Act of 1972.
• Managers must implement policies and procedures
  to educate personnel, to investigate complaints
  and provide sanctions for violations.

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Business Operations Strategies

• Involves knowing and adhering to appropriate
  business practices.
• Specific strategies may include
• Providing employees with an in house fitness
  program to reduce sick days.
• Monitoring the conduct of employees to prevent
  fraud
• Seeking legal advice legal advance periodically
  to insure that contracts are comprehensive and
  enforceable

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Property Exposures.

• Involves eliminating or reducing loss related to
  equipment, facilities and grounds.
• Strategies include providing proper fencing, an
  adequate lock system, keycard access and CCTV to
  prevent vandalism and theft fire prevention
  strategies including sprinkler system, fire
  extinguishers and having the fire department
  inspect the premises proper site selection , etc

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Step Five Implement a plan to carry out the
selected method, monitor and evaluate.

• Implement , monitor and evaluate the strategies
  that have been selected for each risk.
• Implementation means integrating the selected
  strategies into the ongoing facility operations,
  training employees and evaluating the program.
  (IAAM, 1996)

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Integration

• Selected strategies must be implemented
• Examples
• Proper insurance (type, amount deductibles)
  must be purchased and monitored
• budgeting for loss -make sure that these have
  been addressed at the appropriate time in the
  budgeting cycle.
• Waivers, informed consent, incident reports, form
  contacts or any other written documents must be
  identified and developed

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Examples Continued

• Safety audits (inspections) or checklists,
  regular maintenance schedules and or standard
  operating procedures (SOPs).
• Effective integration of strategies requires
• personnel be assigned responsibility,
• Trained and held accountable.

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Assigning risk management responsibilities

• Can be done through a job orientation interview
  together with a job description that provides
  specific RM responsibilities.
• The job description should include the workers
  role in the RM program and their responsibilities
  in specific emergency response procedures.

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Operations manual

• Aids in communication
• Outlines policies and procedures for dealing with
  various risk situations.
• For this tool to be effective, management must
  emphasize its importance and require enough
  training that personnel are proficient in the
  cited procedures. etc.

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An organizational chart

• Provides clear lines of authority between the
  risk manager and workers should be developed and
  published for reference.
• If done properly, communication can be enhanced,
  conflicts and confusion reduced and the program
  elements integrated into an on going approach to
  managing risks.

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Monitoring and Evaluating.

• Periodic program monitoring and evaluation may be
  needed.
• IAAM (1999) recommends a yearly evaluation and an
  evaluation after
• Each training drill
• Each emergency
• When personnel or responsibilities change
• When the layout or design of the facility changes
• When policies or procedures change (p. III-15)
• The RM program evaluation should also include
  individual performance appraisals so that workers
  can be held accountable.

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Event Risk Management

• Events that are hosted by sport and recreation
  facilities are frequently the lifeblood of the
  facility
• therefore, it is imperative that participants
  and spectators be provided a safe, secure and
  accommodating environment.

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Constructing the Plan

• Follow the RM steps previously mentioned
• allows the planner to identify the unique needs
  of an event and develop a plan comprised of the
  strategies for the managing them.

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Areas of special attention

• Pre-event venue preparation and safety audits
• A crowd management plan (if a large crowd is
  expected),
• Checking codes and regulations,
• Event insurance and transportation and parking.
  

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Pre-event venue preparation and safety audits

• May include such activities a
• Proper marking of fields, clearing egress and
  ingress passageways, or placing collapsible
  fencing around a playing area
• Safety audits of pertinent spaces and equipment
  must be done

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Checking codes and regulations,

• A review of safety codes, ordinances and laws
• Permits or special licenses such as a temporary
  liquor license, may need to be secured.
• If the venue is not been properly designed to
  accommodate persons with disabilities then
  reasonable accommodation must be made for
  viewing or participation.

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Event Insurance

• After identifying risks exposures, consult with
  an insurance advisor to determine, suitable
  coverages, deductibles, policy terms and
  prospective carriers.
• Auto insurance should not be overlooked

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Parking and shuttles

• Parking lots should be a source of concern for
  risk managers.
• Well-trained and supervised parking aids may be
  needed to direct and park vehicles
• Should be well light and well maintained to
  avoid trips and falls
• May need to be patrolled or be monitored by CCTV
• Shuttle drivers should be screened for acceptable
  driving records and appropriate licenses

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Event Crowd Management Plan

• Suggested components of a crowd management plan
  include the following
• 1) Trained and competent staff
• 2) Crises management and emergency action plans
• 3) Procedures for dealing with unruly or
  intoxicated patrons
• 4) Communications network and
• 5) Effective signage
• (Ammon Unruh, 2003).

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Trained and competent personnel.

• Must acquire an adequate number of competent
  personnel and then train them in
• How to respond to patron requests,
• How respond to emergency situations and security
  concerns.
• Outsourcing the work to trained specialists
  from a reputable company may be necessary

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Crises management and emergency action plans

• Needed to prevent and reduce the consequences of
  crises such as
• bomb threats, tornado or other inclement
  weather, fire and medical emergency.
• Should be in writing and personnel should be
  trained in how to perform the procedures in a
  proficient and timely manner.

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Crisis management (continued)

• Security is a significant element of a crowd
  management plan
• a term used to describe a facilitys strategy for
  protecting patrons or property from actions of a
  third party during an event.
• Security risk situations include celebratory
  rushing the field throwing objects spectators
  attacking participants, officials, other event
  attendeesstadium/arena vandalism and graffiti
  and possible terrorists attacks

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Keys to effective security

• Quality personnel,
• Appropriate technology and
• A good strategy

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Procedures for dealing with unruly or intoxicated
patrons

• Procedures should address the rights and the
  safety of the ejected individual.
• Ejections should be documented and only trained
  and authorized staff should take part in an
  ejection. (Ammon Unruh, 2003).

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An effective communication network

• Many aspects of a crowd management plan require
  communication
• Should anticipate communication needs related to
  handling emergencies and crowd supervision and
  accommodate these needs with communications
  strategies and technology. effective signage.

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Effective Signage

• Should provide information about the facilities
  rules of behavior
• Warnings
• Directional signage