Facility and Event Risk Management
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.
• Risks are viewed broadly as physical injury or death, potential litigation, and financial loss (Jensen & Overman, 2003) • Occurrences that expose a provider to the possibility of loss. Thygerson (1986) van der Smissen (1990). • To eliminate all risks of harm would remove the challenge and fun associated with most sports
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.
• Someone should be designated as the Risk Manager. To oversee the development and implementation of the RM program
• 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.
• Most loss exposure can be categorized in one of five general areas. • These include:
– 1) Public liability caused by negligence, – 2) Public liability excluding negligence, – 3) Business operations, and – 4) Property exposures.
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.
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.
• Business operations include business interruptions, employee health, theft, embezzlement, and contract disputes.
• 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.
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.
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.
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.
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
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
Four Ways to Control Loss
• • • • 1. Avoidance 2. Retention 3. Transfer 4. Reduction
• 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.
• Retain the risk and prepare for potential loss through budgeting, deductibles, or self-insurance.
• Some situations or activities are inconsequential, uninsurable, nontransferable, or the cost of insurance is prohibitive.
• Shifting the loss to another person or entity contractually or through insurance.
– Ways to Transfer:
• Insurance. Insurance is an excellent way to control risk. • 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.
• 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
Risk Reduction for Public Liability Negligence
• There are myriad ways to increase safety and decrease 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;
– 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.
Risk Reduction for Public Liability Excluding Negligence
• Facility personnel can cause harm and expose the facility to loss through 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.
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.
• 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.
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
• 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; fireprevention strategies, including sprinkler system, fire extinguishers and having the fire department inspect the premises; proper site selection, etc.
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)
• Selected strategies must be implemented
• Proper insurance (type, amount, and 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
• 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.
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.
• 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.
An Organizational Chart
• Provides clear lines of authority between the risk manager and workers and 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 ongoing approach to managing risks.
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.
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.
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 managing them.
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.
Pre-event Venue Preparation and Safety Audits
• May include such activities as:
– 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
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 has not been properly designed to accommodate persons with disabilities then “reasonable accommodation” must be made for viewing or participation.
• After identifying risk exposures, consult with an insurance advisor to determine suitable coverages, deductibles, policy terms, and prospective carriers. • Auto insurance should not be overlooked.
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 lit 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
Event Crowd Management Plan
• Suggested components of a crowd management plan include the following:
1) Trained and competent staff; 2) Crisis management and emergency action plans; 3) Procedures for dealing with unruly or intoxicated patrons; 4) Communications network; and 5) Effective signage
• (Ammon & Unruh, 2003).
Trained and Competent Personnel
• Must acquire an adequate number of competent personnel and then train them in:
– How to respond to patron requests – How to respond to emergency situations and security concerns – “Outsourcing” the work to trained specialists from a reputable company may be necessary
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 emergencies
• Should be in writing and personnel should be trained in how to perform the procedures in a proficient and timely manner
Crisis Management (continued)
• Security is a significant element of a crowd management plan
• a term used to describe a facility’s 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 attendees; stadium/arena vandalism and graffiti and possible terrorists attacks
Keys to Effective Security
• Quality personnel, • Appropriate technology, and • A good strategy
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).
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.
• Should provide information about the facility’s rules of behavior • Warnings • Directional signage