On Christmas Day a few years ago, the San Francisco Zoo was similarly thrust into the national spotlight when three young men were attacked by Tatiana, a tigress that scaled one of the walls of her enclosure. Brothers Paul Dhaliwal, 19, and Kulbir Dhaliwal, 23, survived—but their friend, 17-year-old Carlos Sousa, was mauled to death.

A bitter legal battle followed, with actions brought against the zoo for personal injury and wrongful death. The San Francisco Zoo eventually settled with the brothers for $900,000 before trial and also settled with Sousa's parents for an undisclosed sum.

Both incidents fall under the category of Premises Liability, in which a property's owner or operator could, under certain circumstances, be held responsible for any injuries that occur on site. And while such fatal or even near-fatal incidents are in fact quite rare, they do serve to highlight the liability concerns for zoos across the U.S.

SPECIFIC POLICIES FOR SPECIAL NEEDS

For each zoo, the coverage provided under a typical General Liability policy is tailored to the exposures of that facility. A zoo's GL policy can include coverage for volunteers, fundraisers, day camps, supervised overnight stays, amusement rides, petting zoos, zoo employees' off-site visits to schools and museums, and VIP tours, to name just a few. However, there are no blanket policies for the safety of the animals and visitors.

“There are no national standards with regard to coverages required from a Property and Casualty standpoint,” says David Mello, vice president of client services for American Specialty Insurance & Risk Services Inc., one of the biggest insurers of zoos in the U.S.

“Each zoo is unique, and thus its coverage needs vary,” says Mello. Some insurers may provide glass coverage that would extend to damages caused by animals scratching or cracking their see-through enclosures, for example, while other carriers may not.

Typically, zoos will purchase no less than $1 million in Commercial General Liability limits. Quite often, these facilities will purchase additional Excess Liability limits at their own discretion.

AZA: THE ZOO WATCHDOG REVIEWS RISK-MANAGEMENT PLANS

One factor that comes into play when zoos shop for insurance is accreditation by the Association of Zoos and Aquariums (AZA), a watchdog group whose seal of approval holds extremely high value among zoos, animal parks—and underwriters.

An inspection team of three people—including one veterinarian, one expert in operations of the type of facility being reviewed and an expert on animal husbandry—spends three days “going through every aspect of the institution,” says AZA Spokesman Steve Feldman. “At the heart of their inspection, of course, is looking for great animal care: making sure the zoo has the best facilities, best diets and that the staff is well trained to meet animal needs.”

Safety and emergency procedures are reviewed, as well as the facility's risk-management plans, which AZA defines as the facility's identification and assessment of the potential for injury or harm to the visiting public and to employees.

Exposures faced by zoo guests include human-animal contact, wet floors, poor lighting, insufficient barrier fencing and cracks and/or holes in walkways.

For employees, the risks entail poorly constructed or planned exhibit-service areas, cluttered work spaces, inadequate training, and potential contact with narcotic drugs and used hypodermic needles. Plus, of course, some zoo workers are in regular, up-close-and-personal contact with the main attractions.

“AZA provides a seal of approval that the public can count on and that other members of the association can count on,” Feldman says. “Insurers should look to accreditation for assurance they're dealing with a top-notch facility.”

NEW ATTRACTIONS BOOST ATTENDANCE, EXPOSURES

Despite the fangs and claws possessed by the inhabitants, zoos at their most basic aren't evaluated by insurers in a way much different from other venues with a mission to educate and entertain the public.

“As an underwriter, when it comes to most facilities and its animals, you tend to look at a zoo as a living museum,” says Mello. “It's when a facility has additional exposures, such as amusement rides, overnight stays or animal contact, that additional underwriting concerns come into play.”

Those additional exposures are becoming more common as zoos, looking to get more visitors through the gate, are adding new attractions like rides and such features as rock walls, rope-climbing courses and even zip lines (see accompanying video below).

“The challenge for zoos is attendance; they have to step outside what they're used to and offer more challenging features to attract visitors,” says Shirl Hedges, commercial-lines manager at Philadelphia Insurance Cos., which underwrites several zoo clients. “That ends up costing them more for insurance.”

Zip-lining has become particularly popular among zoos, helping to lure a demographic whose attention they've been after for years: the 30-and-under crowd, which is excited by the thrill of speedily soaring among the treetops along stainless-steel cables.

At the San Diego Zoo's Safari Park, for example, visitors 12 and older can zip as high as 160 feet above rhinos, deer and other creatures. The Columbus Zoo in Ohio offers the Wild Zipline Safari, a series of 10 zip lines that promises visitors an aerial expedition above giraffes and herds of other animals.

In Florida, the St. Augustine Alligator Farm and Zoological Park, which was founded in 1893 and boasts all 23 species of crocodiles, last year installed a “Crocodile Crossing” zip-line course in the treetops above much of the park that has proven to be a hit with visitors looking for a more adventuresome experience.

Tommy Martin, senior vice president at Brown & Brown Inc. in Daytona Beach, has managed the zoo's insurance needs for more than 20 years. He discovered that zip lines aren't the easiest risk to place, as they have only become popular in the U.S. in the last several years. Without much loss data to go on, many E&S carriers would rather pass on insuring them, he found.

“It's still too new for insurers—and their reinsurers—to feel comfortable with taking on the risk,” Martin says. Crum & Forster, a Morristown, N.J.-based standard and specialty insurer, had held the zoo's Excess policy for 15 years, says Martin, “but they couldn't handle the zip line.”

Richmond, Va.-based E&S insurer Kinsale now serves as the zoo's Excess carrier; its policy was placed by Brown & Brown through Peachtree Special Risk Brokers, a wholesaler that Martin uses frequently.

“Given the uniqueness of the risk, we were very pleased to place it through Kinsale with very little premium increase,” Martin adds—just a few thousand dollars extra per year for the significant additional exposure.

And while zip-lining above creatures with long rows of sharp teeth sounds like an insurer's nightmare, “zip-lining over animals isn't the most dangerous thing we do,” says John Brueggen, the St. Augustine Alligator Farm's director and general manager. “We work with king cobras and some of the biggest crocodiles in the United States. We work with a 15-foot, three-inch saltwater crocodile. That's not an easy thing to find insurance for.

“That's what we depend on [Martin] to do for us,” adds Brueggen. “He helps us locate the insurance—and helps the insurance people understand what we do and how well we do it.”

The proof is in the zoo's loss history, which has been minimal, says Martin—a fact not altogether surprising considering the park's substantial safety precautions, particularly those for the zip lines.

Before being allowed to cruise around some 30 feet above the zoo, participants undergo a thorough training session. Visitors who don't use their equipment properly or fail to follow the detailed safety instructions of no-nonsense Crocodile Crossing Manager Scott Brown are given just one warning before being pulled from the course.

BIG-CAT COVERAGE: INSURING ZOO ANIMALS

Beyond the risks to human visitors and employees that zoos must insure against, what about the insurance considerations for the animals themselves?

In some instances, zoos may purchase Mortality coverage if they're transporting a rare or temperamental animal or for very rare animals on loan from another facility or country.

Pandas, for example, are an endangered species loaned to zoos by the Chinese government for a fee of up to $1 million per year; American zoos do not own them. Some zoos might buy Mortality coverage simply to be protected against loss of revenue if the animal dies and can't be exhibited.

The factors in underwriting Mortality coverage include such considerations as the animal's age, sex and species, as well as where the creature will be exhibited and for what use (personal vs. commercial), according to Mitchel Kalmanson, president of the Lester Kalmanson Agency, a specialized independent insurance agency that provides insurance, risk-management and related services for zoos.

The animal's enclosure is a major factor, including overall acreage of the habitat and the materials and construction quality of the walls and fences, he says: “How high are the fences? Is it a 10-foot wall? A 20-foot wall? Are there electric fences the public doesn't see? How are those elements secured to the ground? Are they built with wood, steel or a polycarbonate plastic?” All these factors go into the determination of rates.

Colin Dean, managing director at McGowan Program Administrators, a managing general underwriter and program manager, has decades of experience in insuring zoos' most valuable asset. Zoo-animal mortality is his business, and many such policies are written through E&S carriers like Ace Westchester and Lloyd's.

“We write them on a livestock form: Inland Marine with a bloodstock attachment,” he explains. Prized specimens get a full Mortality policy that includes disease or death by any cause aside from intentional slaughter.

“As a book of business, [insuring zoo animals] is not immense, but we've got a core book of zoos for which we insure their whole stock,” he says. “As long as there's a flow of business, you can peg rate to cover loss, and that's the way it's done.

“By and large, zoos are very good risks,” Dean adds. “The rates are pretty stable, and you know your losses immediately—there's really no long-tail exposure, excuse the pun.”