Program Plan –

Risk Management and Maintenance

HPR 322

MaintenanceA given in almost any recreation undertakingLack of can impact the quality or even the possibility of participationCan contribute to or hinder risk management practicesWhat might need maintenance?

EquipmentFacility

Water Exercise ExamplePool – chemicals, water level, ropes, ladders, boards, trash, contaminants

Deck – Surface, furniture, trash, water fountain

Equipment – Brooms, vacuum, pumps, sprayers

Restrooms – cleaned, stocked, and functioning

Whose responsibility?Dedicated maintenance staff (entity, department, facility, operation)

Secondary duties of other staff (lifeguards, pool manager in my example)

Contractors (welder to repair diving board)

No one in particular, or everyone (can lead to problems)

Planned or ‘improvised’Ideal is preventive maintenance, planned and/or scheduled, with specified documentation or record keeping standardsSchedules can vary from each use (vehicles) to 1-2 times daily (pool levels and chemicals) to ongoing (restrooms)Sometimes nothing is done unless/until someone complains – is this good for business?

Risk ManagementAny and all attempts to control or limit the potential an entity or individual has for loss of or damage to property; responsibility for injury to or wrongs suffered by others; or other incidences that could cause direct (financial) or indirect (damage to ‘image’) harm to the entity or individual

There is always some risk..

Risk can be:Transferred (insurance)Retained (contingency or emergency account; ability to ‘do without’ if needed)Partially retained (insurance deductibles)Avoided (why many cities do not have some facilities)Controlled or minimized (more to follow)

Insurance or self-insuranceMost entities that provide recreation will have either commercial, self- or captive-provided insurance

A captive is a small, self-owned insurance companyThe larger the entity, the more likely to have self insurance (captive) or high retention (deductible)Some entities also enter risk sharing/pooling arrangements

Advantage of this is that members own the profitsGood pools will work hard to minimize and manage risk; are selective about who can join

Controlling RiskPreventive Maintenance, ongoing repairs, keeping good recordsInsurance company (loss control) inspectorsEstablishing and communicating rules and safety standards (don’t run on pool deck)Selecting and training staff

How to do his or her jobInjury prevention (rules, CPR, defib)Familiarity with procedures including emergency plans

Two general types of riskRisks to PropertyBuildings, contents, equipment

Fire, lightning, water damage, vandalism, theft

Relatively easy to value loss

Generally know immediately or shortly when a loss has occurred

Insurance costs based on replacement values and estimated probability of loss

Third party liabilityInjury to person or persons

Physical injury, disease or condition, death, mental/psychological injury, damage to reputation

May not know for years (minor children)

Difficult to determine values

Insurance costs based on experience of each entity and ‘universe’ of like entities

Motor VehiclesProperty Losses

Collision – colliding with something – damages to the entity’s vehicle

Comprehensive or OTC – all damages to entity’s vehicle that are not collision (fire, theft, explosion, windshield, sometimes animal)

Almost always subject to deductibleHigh ded or no coverage for older vehicles

Liability lossesInjuries to others or damages to their vehicles or property that the entity’s drivers causes with entity vehicles

Injuries to passengers

Auto also has med pay

Auto also has UM and/or no fault coverage

Generally high limits and no deductible

Some other risksWorkers compensation – injury to employees caused on the job (or to and from). Can be covered by private insurance, covered through state (monopolistic), or retained by employer/entity. Also includes “Employers’ Liability”D & O or E & O – damages caused by board of directors or administration (ex., policies relating to membership requirements). ‘Liability’ insurance usually does not cover; D & O policies often only cover ‘monetary’ damages

Lawsuits and settlements

Insurers are motivated to save money; entities are motivated to save money AND to preserve their reputation/good will

Insurers will sometimes settle to avoid lengthy and expensive lawsuits

Can cause loss of reputation for entity as it appears they are admitting guiltCan damage entity’s ability to obtain insurance in the future (‘loss ratio’)Lawsuits that are ‘won’ may still incur $$$

Some policy provisions allow for payment without admitting fault (‘med pay’)

Frequency (lots of little losses) and severity (1-2 large) are both potentially bad; freq may be worse

Waivers and Hold Harmless

Written contracts provided to participants who must sign in order to participateState that they understand and assume riskIn part are effective because participants believe they are effectiveMixed results in lawsuits

Waivers and Hold Harmless cont’d

When a contract is designed/drawn by one party (the recreation program provider) without the input of the other party, ambiguity or misunderstandings work to the favor of the other partyIt is not always assumed or presumed that people can read and comprehend contracts, even when they sign them (why insurance forms went to ‘simplified forms’ in 1986)You cannot ask someone to sign away all of their rights – if you fail to properly maintain equipment, or knowingly subject people to unsafe circumstances, waivers do not matter to course (or juries)

Changes after 9/11Whose fault is terrorism?How to predict or ‘underwrite’?

PML on World Trade was one buildingPublic entities seen as targets (OK City; Columbine High School)Fed government provides some - must be ‘terrorist act’ (only foreign)Property limits lower and more expensive; not as much impact on third party liability

What type of loss and who will pay? (property, liability, D & O, workers comp, other)

Main recreation building burns down

Child injured in soccer game

Board of directors changes mind about letting Boys and Girls Club kids to use pool

Disgruntled park employee starts arson fire in equipment shed that damages tools and injures other staff

Park employee, while sending a text message on her phone, crashes the bus she is driving to take an U12 baseball team to an away game into a bus full of older adults going on a trip to a casino

ExerciseConsider your programThink of two possible loss scenarios

One to property/equipmentOne third party liability (injury, damages, etc.)

Identify each and tell how you would plan to manage the risk (retain, transfer, etc.)

Risk Mgmt and Maintenance Assignment – due 11/8 with Program Budget

Maintenance PlanProgram, activity, event specificWhat, when, who, tracking (checklist, etc.)

Risk Management PlanIdentify some common risks – at least one relating to loss of property and at least one liabilityIdentify how you will manage those two risks and provide general information about your plan to identify and/or manage other risks

At the pool….There are not any unique risks to the pool property as a result of my program other than perhaps damage to equipment (kickboards, etc.) used (I would ‘retain’ this very small loss)Potential damage to property through vandalism or storm exists all of the timeWould manage through means including alarm system, police patrol, property insurance

Liability risksMost common liability hazards relate to injury of participants (slip, trip, fall, injury caused by diving in shallow water or other unsafe practices). Cardiac arrest is a possibility but would not generally be a liability hazard – it is not the pools’ fault if a patron has heart disease. However, care should be taken.Drowning is also a risk but is far less common than injury.

Managing liability risks at the pool

I will have an insurance policy in force to pay claims. Note that insurance does not cover ‘intentional wrong acts,’ (when someone intends to injure someone). It can provide coverage for risks due to premises or operations that are potentially hazardous just by virtue of their existence (including much of recreation).

Managing liability risks at the pool cont’d

Also, will post signs (“No running,”) train staff to enforce rules relating to participant safety, and to recognize possible health conditions, will discuss potentially dangerous practices with participants (demonstrate how to safely enter pool; discuss deep water safety).Will use waivers that specify that participants should have Dr. approval before beginning an exercise program

General Risk Mgmt PlanInsurance for large losses of property or liability typeMaintenance schedule with records keptNew staff training and periodic in-service for all staffCPR and First Aid certification for staffDefibrillator and lightning detectorIncident/accident report forms