Insurance and risk management professionals should impart this message to companies and organizations that use their facility or grounds for special events: Be prepared for anything that might go wrong and potentially lead to a lawsuit. Here are a few examples of incidents that could prompt legal action: |

• Attendees say they contracted the novel coronavirus (COVID-19) after attending what they claim was a "superspreader event" at the rented facility.
• A guest is injured after slipping and falling on a spilled beverage. He then sues both the sponsoring organization and the host.
• The parents of a 5-year-old girl report to police that the child says she was abused by a childcare worker at the event. This results in a lawsuit.
• Numerous attendees say they became ill after eating food at an event, making claims against both the sponsoring and host organizations.

While you can't control the actions of others, you do have control over many aspects of the situation — and ways to decrease the likelihood that something bad will happen at a special event. |

Facility-use policy

The first step in protecting an insured with rental facilities is investing the time and resources into creating a thorough facility-use policy. If you are unsure where to start, perform a quick online search to gain an idea for how other organizations have crafted their policies. One good example is Ohio Wesleyan University, which has a policy that addresses everything from payment to catering and alcohol use to local concealed weapons laws. Any facility-use policy should include, at a minimum: |

• Clear guidelines for use of the facility.
• Activities allowed and prohibited at the facility.
• Information about local restrictions related to COVID-19.
• Permissible decorations, signage and other alterations to the facility.
• Charges and add-on fees for use of the space.
• Information about how the host organization will be handling set-up, food, security, staffing, cleaning and any necessary equipment such as a sound system or video equipment.

The policy should outline your organization's mission and vision, so it is clear that any group using the rental facility must be in accordance with that mission. For example, if the insured believes in fairness and equity for all races and cultures, any group that practices discrimination may not be a good fit for a rental contract. Make sure such social, political or cultural expectations are well-defined in the policy. Additionally, the policy should detail the application process for special events, including the contact person, timeline for application and insurance requirements. Any organization that wishes to use the facility should be able to make an informed decision based on the facility-use policy. |

Formal application and agreement

The best way to avoid potential litigation is to be prepared. And the best way to be prepared is for the insured to know what they're getting into with each special event. There are three major steps in allowing another organization to rent out a facility: No. 1: The application process. Take time to make sure your application covers all the necessary pieces of information. One example from the Township of Egg Harbor, New Jersey, gives you an idea of the basics, including projected event attendance, times needed (including set-up and take-down), and important guidelines and restrictions. Remember, the facility owner can request as many details as they like in the application. This is their opportunity to flesh out what kind of renter this is, and whether that client fits into the insured's mission and values. On the application, the insured also should include reference questions to gather information on where the organization has held events in the past. This is especially valuable because it gives the site owner an opportunity to investigate whether or not the organization has a history of good behavior. No. 2: The approval process. The site owner/insured should avoid designating a single individual — such as a pastor or executive director — to make the decision about when, how and to whom the facility can be rented. As is true with many other situations, several heads are better than one. Also, if the applicant is a group that the insured has never worked with before, investigate its history and make sure it's legitimate. This standardized approval process should be well in place before any entities approach about renting the facility. No. 3: The facility-use agreement. Once the insured has decided to let another group use their property for a special event, draw up an agreement. Church Mutual Insurance Company, S.I. (a stock insurer) offers a sample legal agreement on its website that includes: |

• An indemnity/hold harmless provision to protect the host organization from any injury or damage that may be caused by the sponsoring organization.
• A section in which the host organization can specify the amount of insurance protection it requires and makes it clear it should be named as an additional insured on the sponsoring organization's policy.
• A section in which the sponsoring organization acknowledges it has inspected the facility and found it to be sufficiently safe.
• You should always consult with legal counsel before finalizing your facility use agreement. An attorney can help you identify whether there are any glaring loopholes in your agreement.

Insurance needs

Any group that rents the property must have a sufficient amount of insurance to cover any damages incurred to both property and people. It should be required to take the step of adding the owning organization as an additional insured under their insurance policy for the event, and provide the owner with proof of such coverage, preferably by an endorsement (change) to their policy. Protection such as this can come in several different ways, including under their existing policies or through special event insurance, depending on the circumstances. Consult with an insurance agent or broker and legal counsel to ensure that the sponsoring organization's insurance is legally binding and covers any incidents that might occur on the rented property. |

Property walk-through

When another organization is renting an insureds facility, both parties want to make sure everything is in good working order to avoid potential problems down the road. During the pre-event walk-through, pay particular attention to the following aspects of the property: Uneven or damaged walking surfaces. When a patron at a special event trips on an uneven sidewalk or a damaged floor on the inside of the building, the responsibility falls squarely on the shoulders of the host company/organization. Any problem with a walking surface should already be on the property owner's to-do list because the overall hazard to anyone who passes through the facility, including employees. But the renter may be using areas of the building that are currently vacant, and therefore a low maintenance priority. Make a commitment to fix such problems. At the very least, document them and plan for future repairs. Poor lighting. Poorly-lit areas are just as much of a safety hazard as uneven surfaces. If a renter is using the property after sundown, all outdoor areas should have appropriate lighting. Check any automatic timers to make sure they are reset to reflect a different schedule of property usage. All indoor areas that will be used should have easily accessible lights. Obstructions in hallways. As stated above, the sponsoring organization may be using areas of the building that are vacant, which means they may double as storage rooms. The property owner should clear out such potential obstructions well ahead of the event. The walk-through is an opportunity for the owner and the renter to look for any items that might be in the way. |

COVID-19 considerations

COVID-19 restrictions vary widely from state to state and are likely to change over time. Still, if a property owner is allowing another organization to use their facility, make sure both parties are on the same page with regards to crowd safety and public health guidance. The Centers for Disease Control and Prevention (CDC) currently recommends that Americans: |

• Wear masks to protect themselves and others from the virus;
• Stay at least six feet apart from people who do not live with them; and
• Avoid large crowds and gatherings.

Those recommendations may change as we move into the spring and summer. Regardless, the most important part of any rental agreement is managing expectations on both sides. |

Screening staff, protecting children

If the sponsoring organization will be providing childcare or other activities for kids at the event, it needs to ensure those children will be protected. There are two options: |

1. The sponsoring organization hires a sufficient number of screened workers, based on the expected number of children at the event, and provides proof of their screening process.
2. The sponsoring organization contracts with the host organization to provide screened workers for the event.

Food safety

It's imperative that any group renting a facility practice safe food-handling practices. The Food and Drug Administration (FDA) recommends that these four steps to keep guests safe from food poisoning: Clean. Wash hands and kitchen surfaces often. Wash cutting boards, dishes and utensils with soap and water after preparing each food item. Rinse fruits and vegetables under running tap water. Separate. Keep raw meats separate from other foods. When using a cutting board for meat, always wash it with soap and water right away. Never put cooked food on a plate you used to store raw meat. Cook. Cook all foods to the right temperature, using a food thermometer at all times. Always cook eggs until the yolk and white are firm. Chill. Refrigerate or freeze meat, poultry, eggs and seafood within two hours of cooking. Only thaw food in the refrigerator, in the microwave, or in cold water. Additionally, the event host should make every effort to avoid cross-contamination to protect attendees who have food allergies. According to Food Allergy Research & Education, 32 million Americans have food allergies. People who are eating at an event should feel confident that their foods have not been contaminated with potentially life-threatening allergens. |

Preparing for the unexpected

While most renters are safe and responsible when using another group's facility for an event, there are plenty of cases in which organizations have acted irresponsibly. These situations may result in injury, abuse, illness or virus superspreader events. That's why it's imperative for the insured property owner to do their homework. Find out more about the organization that wants to use your facility. Spend the time to create a policy, application and agreement that will encourage both parties to behave responsibly. Ask the right questions so to avoid inopportune surprises. Make sure any group using the facility will be a respectful tenant. Guy Russ is assistant vice president of risk control, Church Mutual Insurance Company, S.I. Church Mutual is a stock insurer whose policyholders are members of the parent mutual holding company. To reach this contributor, send an email to [email protected]. See also: |

• Insurers name top risk concerns in 2021-22, and the pandemic isn't one
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