Race Insurance

If there’s one thing you can’t have enough of as a race director, it’s race insurance. Particularly - knock on wood - when the unexpected happens and you’re faced with a dreaded lawsuit that threatens to take away your livelihood and your piece of mind.

So how can you best protect yourself and your business from the risks associated with putting on a race? What will your standard event liability policy cover? What does it exclude? And how should you expect to be protected against legal and medical claims should your race be held liable for a participant injury or loss of property?

That’s what we’re discussing today with my guest, Nicholas Hill Group partner and event insurance veteran, Nathan Nicholas. Through Nicholas Hill Group, Nathan has helped develop some of the most robust and widely-used specialist insurance policies for the endurance events industry, and with his help we’ll try to understand where the boundaries of liability insurance protection lie for you, the event organizer; how event liability insurance ties in with other types of business insurance you may be buying; how the type of race you put on affects the cost and availability of insurance cover you might find in the market; and how the diligent use of participant waivers and incident documentation can help reduce the risk of frivolous lawsuits being filed against you.

In this episode:

• Event liability insurance: what it is and what kinds of contingencies it covers
• How event liability insurance differs from Business Owner's Policies (BOPs) and other types of general business insurance
• Will an event liability policy cover me for event-related work outside of race day?
• Will an event liability policy cover volunteers, spectators and third-party vendors on site on race day?
• Negligence and gross negligence in the context of liability insurance.
• Understanding an event liability policy: deductibles, claim limits, additional insured's. 
• Getting insurance for obstacle races, ultramarathons, night races, races serving alcohol.
• Liability waivers: do they work?
• What to do (and not to do) when sued for liability by a participant or other party.
• How are your legal costs covered in the event of a lawsuit? Will you have to pay out of pocket?
• Does a virtual race need liability insurance?
• Race cancellation insurance: what it is and what it covers
• Will a race cancellation insurance policy cover the costs of postponing instead of cancelling a race?

Many thanks to our podcast sponsors, RunSignup and Brooksee, for supporting our efforts to provide great, free content to the race director community:

RunSignup are the leading all-in-one technology solution for endurance and fundraising events. More than 28,000 events use RunSignup's free and integrated solution to save time, grow their events, and raise more. Find out more at https://runsignup.com/.

Brooksee are the timing technology industry-leader, bringing affordable real-time tracking and timing checkpoints to races with their patented iPhone-sized micro checkpoints. Find out more and get 50% off your timing for your next event at https://www.brooksee.com/headstart.

You can find more resources on anything and everything related to race directing on our website RaceDirectorsHQ.com.

You can also share your questions about event liability insurance or anything else in our Facebook group, Race Directors Hub.

Transcript

Panos: 0:07

Hi! Welcome to Head Start, the podcast for race directors and the business of putting on races. If there's one thing you can't have enough of as a race director, it's race insurance. Particularly - knock on wood - when the unexpected happens and you're faced with a dreaded lawsuit that threatens to take away your livelihood and your peace of mind. So how can you best protect yourself and your business from the risks associated with putting on a race? What will your standard event liability policy cover? What does it exclude? And how should you expect to be protected against legal and medical claims should your race be held liable for a participant injury or loss of property? That's what we're discussing today with my guest, Nicholas Hill Group partner and event insurance veteran, Nathan Nicholas. Through Nicholas Hill Group, Nathan has helped develop some of the most robust and widely-used specialist insurance policies for the endurance events industry, and with his help, we'll try to understand where the boundaries of liability insurance protection lie for you, the event organiser, how event liability insurance ties in with other types of business insurance you may be buying, how the type of race you put on affects the cost and availability of insurance cover you might find in the market, and how the diligent use of participant waivers and incident documentation can help reduce the risk of frivolous lawsuits being filed against you. Now, it's important to stress, as we do in the course of the podcast, that Nathan is not a lawyer, and that general guidance on subjects of insurance and liability is near impossible, given the different jurisdictions and circumstances race is operate in. Nonetheless, we do our best to provide a helpful framework for understanding liability and event liability insurance wherever you may be based. Last thing, before we get into this great discussion, I'd like to give a quick shout out to the amazing sponsors supporting this podcast. Many thanks to RunSignup, race directors' favourite all-in-one technology solution for endurance and fundraising events, now powering more than 28,000 in-person, virtual, and hybrid events. And, welcoming a new partner sponsor on the podcast, many thanks to Brooksee, the timing technology industry-leader, bringing affordable real-time tracking and timing checkpoints to races with their patented iPhone-sized micro checkpoints. Two great companies we'll be hearing a bit more from later in the podcast. But, now, let's dive into our discussion on race insurance with Nicholas Hill Group partner, Nathan Nicholas. Nathan, welcome back to the podcast!

Nathan: 2:47

Thanks, Panos. Great to be here.

Panos: 2:49

Well, it's great to have you back on. You are, as a matter of fact, our first-ever podcast guest. You were on episode one of the Headstart podcast. So you're back 70 episodes later on episode 71. How have you been?

Nathan: 3:04

Wow, that's quite the honour, and congratulations on 71 - that's a big milestone. We've been good. We've been heads down selling insurance. It's been good. We've worked with a lot of wonderful race directors since we last talked and it's been a wonderful run. So love what we do and love helping these folks.

Panos: 3:28

Indeed, indeed. And the industry loves you guys because we have very few specialist insurers like you guys and you provide a fantastic service. Of course, on episode 1, we were discussing race cancellation coming out of COVID. So it was a completely different kind of pace back then - completely different times. Now, it's been a couple of years since then. Runsignup - actually, I was just reading this report a couple of weeks back - had been reporting some really strong numbers on participation and I was wondering, from your point of view, being in the specialist race insurance kind of field, are you sharing that kind of view? Are you seeing positive stuff in terms of race directors coming back, more races coming on the books, more participants?

Nathan: 4:10

Yeah, 100%. Definitely. We launched these various partnerships pre-COVID - a couple of years pre-COVID. Things were growing pretty well and then the world stopped for us like it did everyone else. The segment of our business, obviously, hit the pause button for a year and a half or more and we, in the last year, have well surpassed where we were pre-COVID. So pre-COVID, we are definitely still in the early growth phase of these partnerships but we're well beyond that now. So it definitely feels mature and still growing. We still have a lot of market share out there and a lot of the event organisers to help out, so it's been really positive. So yeah, I would echo what you're reading with RunSignup that the industry has definitely made up for any lost ground and then a lot more.

Panos: 5:15

Tell people a little bit about Nicholas Hill Group and a little bit of - I guess, which I may also not be very familiar with, sort of - the history of how you guys came into this very specific niche of race insurance.

Nathan: 5:30

Yeah. Well, it's been a long path. Panos, I hate to admit it but I'm almost 50 years old. I'll be 50 this next December and this is the only thing I've ever done professionally other than a couple of summers as a cowboy, but I don't think that that counts. So, professionally speaking, I've only been in the insurance industry and I was actually raised in it. So my father was in the insurance industry as well. So I came into it, honestly, after college. It was kind of a path of least resistance for me. I had a good mentor in my dad, moved up to the mountains - that was really the only change - and started hitting the streets and trying to make a living. I learned very early on when I was much, much younger - I was in my mid-20s-- I was in more of the senior insurance space talking to older folks about their future and I learned early on that it wasn't a real passion for me and they really didn't take me seriously. Before I had any grey hair or anything else, they didn't think I was a legitimate resource for them. So did some soul searching and I was lucky to have that lightbulb moment where, "You know what? This would be a lot more fun if I was working with people that were doing things that I was passionate about, where we had some shared passion and I had some personal experience with." And very quickly after those kinds of epiphanies, I kind of stumbled into working with some of the ski resorts here in Colorado and helping them create some insurance solutions for their employees and their visitors and being based in Colorado Springs. It's also home of the US Olympic Committee and Paralympic Committee. And because of that, many of the different national governing bodies for the various sports are also based here in Colorado Springs. So the solutions that we helped design for the ski industry were also very applicable to the various sports. So right off the bat, my wife, at the time - this was pre-children - she was working for the US Paralympic organisation. And through personal contacts and social contacts, we stumbled into some opportunities with groups like USA Triathlon, USA Cycling, and those same products that we were offering to the skiers were a perfect fit not as much for the organisation, but more for their members - those cyclists around the country, those triathletes around the country - and that really started us down this path of helping both the athlete and the organisation come up with solutions for kind of risk management.

Panos: 8:24

And of course, now you have quite an extensive suite of products for race directors and event organisers in these kinds of space that you offer to various organisation members, you offer it to our members at Race Directors HQ, Running USA, American Trail Running Association - lots of lots of different organisations.

Nathan: 8:46

Yeah, you bet. And not just running but the cycling space, some ski business still on the books. We work with a wide variety of folks and some gravel races. Typically, Panos, we come across a point in time where a certain industry is having a pain point or they're being underserved by the insurance industry as a whole. For instance, a couple of them come to mind, we probably help more mountain bike clubs than any other organisation and it's because there was a moment in time when there were some claims and the insurance carrier that represented that segment pulled out of the market and every club in the country basically was without coverage. And without insurance coverage, they could not build trails and maintain trails because those trails are on typically public lands most often, and those land managers require insurance coverage. So everything was going to come to a halt. So we were able, through our contacts and experience, very quickly jump and help that group. Same thing happened to Nordic centres - cross country ski areas. Same deal. They lost their primary provider of coverage and we recognise this and we're able to jump in and design something pretty quickly. So that's kind of how our business has evolved and how we've come to help a variety of different sports organisations.

Panos: 10:23

Great. So today, I wanted to take a much overdue, I felt in terms of other topics we've touched on the podcast-- I look at race insurance and we're going to be looking at different products within race insurance. We're going to be looking at liability insurance - event liability - which is, I guess, sort of the bread and butter, sort of like the core of the kinds of insurance that a race director might look to take on. We're going to be looking at waivers, which is an important aspect of the event liability insurance product. We're going to be looking also-- I wanted to maybe, like, have a little bit of an insight into how the claims process works, not something that people will immediately need, but still something that I think people may have questions around in terms of what happens if I need to claim or what comes first? Do I pay? Do I get paid? Like how that whole thing works practically. And it's great to have you on because you can walk us through all of that. And then I want to end up with a quick look at cancellation insurance which is a product that is not, I guess, as core as the liability insurance policy but it's still something that many race organisers I remember from our last chat in a previous podcast still choose to take out, particularly in areas where you have severe weather disruption and other types of events that may put an event at risk. So that's sort of the things I wanted to go through. How does that sound?

Nathan: 12:00

That sounds great. Yeah, let's jump right in.

Panos: 12:03

Awesome. Well, let's do that. So let's start with liability insurance. I hope I'm correct in saying, for our UK listeners, that general liability insurance, which is a term used in the US, is sort of the equivalent of the public liability insurance policies that you get in the UK. Obviously, you're the expert in the US, so a lot of the things that we may be discussing may not be applicable in other countries and maybe in some cases also, not in every state. Let's look at general liability insurance. What is it exactly? And what kinds of things does it cover?

Nathan: 12:38

Yeah. So when we talk about general liability, the first thing I want to say is - kind of a disclaimer out there - that this is a product. Sometimes, it's difficult and challenging being in our position as the providers of some of this coverage because we always want to satisfy our clients, we want to give them the best product and service, which we will always strive to do. But, sometimes, the answer or the questions that they ask, we're unable to provide, like, a black-and-white answer to because liability coverage is very nuanced and, sometimes, I hate to say the word grey, but there's a lot of space out there that the answer to a question can depend on the path that a lawsuit might take, for instance, and I can't really give a concrete answer to a lot of questions. So just a quick disclaimer, before we jump in regarding liability insurance, we're going to kind of speak in broad strokes, if you will, because we can't get too detailed because, like you said, there are all kinds of nuances even by state or by location jurisdiction. So to start off, that's my disclaimer. But in general liability insurance, I'm gonna actually pull up a document I created for another conference and just kind of give you the quick legal definition of it. General liability insurance is an insurance policy issued to a business organisation to protect them against liability claims for bodily injury and property damage arising out of premises, operations, products and completed operations, and advertising and personal injury liability. So that's kind of a generic black-and-white answer for you as to what general liability is. When we're speaking to general liability insurance and how it relates to races, there are some different product nuances that people need to keep in mind. In its basic form, people here in the US think of general liability insurance as it relates to a business owner's policy or a BOP for short. BOPs are something that covers you for kind of your day-to-day operations. People refer to it as trip and fall insurance. Someone comes into my office here and they trip on something on the floor, whatever, they hurt themselves, it turns into some kind of claim, whether it's medical related, they got injured, or something more. There's a lawsuit related to it. That's what general liability is there to help cover - the business owner in that instance. Event organisers-- what we're really talking about on today's podcast is more events insurance. It's liability coverage for events. So those two things aren't always in tandem. You can buy event insurance and not truly have a general liability policy for your business or vice versa. A typical BOP or a business owner policy that you might buy for your day-to-day operations at your office probably won't cover you for your event. There are exclusions within the policy that will not allow that policy to extend to a sports event, for instance. So those kinds of needs to be thought of almost separately.

Panos: 16:14

So basically, from what I understand, this is the equivalent of business insurance, as you mentioned, for an event. Let's say a race arts deflates and it sort of drops on someone, it would be covered by an event liability kind of policy. Again, just trying to get through a few concrete examples, someone trips over a timing mat, that kind of thing, or they bump into, like, race barriers or something like that. So anything that might be related to the event itself on race day and it might cause some kind of bodily injury to someone or someone, like, breaking their phone or something like that, it would be covered under that.

Nathan: 16:57

Yeah, we have a current claim. For instance, after the race, people were gathered in a tent and a big gust of wind came and the tent collapsed and, unfortunately, one of the support beams or poles fell in and hit someone's head, actually. And so there's a claim for that. Kind of an act of God, if you will, but still, there was an injury and we're responding to that on behalf of our insurance.

Panos: 17:27

Okay. So that's in line with sort of the general area we were discussing. But - which is a distinction that's really important here - if say, a month before the race, you go out as part of your race directing operations and you scout a course or you try to mark a course, or you do something like that outside of race day, that policy won't cover your kind of, like, business operations outside of race day? Is that accurate?

Nathan: 17:56

No, not necessarily because that's one of those kinds of grey areas where I can't give you a black and white. But if the activity that you were conducting a month prior was related to the race that we're covering and how it impacted people on race day, that's great. The event policy may respond to that or may not. It depends on the situation. Totally depends on the situation.

Panos: 18:25

Okay, that's interesting. So, because then I'm thinking, if race directors-- basically all they do in some direct or indirect way is working towards putting on events which would themselves be covered by a liability policy, do they still need and, from your experience, do they take out separate business insurance or equipment insurance for equipment, for a car, or for an RFID timing system, something like that

Nathan: 18:54

Again, here's my favourite word. Depends. But, in going wrong? broad strokes, they probably should and in many instances, they are required to. So if they have an office and they're renting that office from an owner of the building, that owner of the building is gonna require a proof of a general liability policy that covers them 365 days of the year, meaning if someone comes to visit them and they get hurt while they're there, for instance, that's where a business owners policy or more general liability policy would be required be needed, right? And there's an extra little tack on that I'll supply here that through our Race Directors HQ, for instance, programme where we provide event liability coverage to folks for a very minimal cost, they can add on day to day coverage that will cover them for the year that's kind of an extra add on to their event policy that they buy. Now, again, very nuanced, the main intent of that day-to-day coverage is just to cover him for on-premises activities that trip and fall in their office. It's not really as broad as a business owner's policy that they might buy specifically from an outside company that will cover them for a lot of other things. So there's a lot of greyness and that's why, whether people speak to us in our office or some other specialists, it's really important that whoever an event organiser speaks to with their risk management and insurance questions that that person knows very intimately what they do - that they're an event organiser - and all the different aspects of their profession so that they can kind of round out their coverage for them because it's not what people want to hear but they really might need to buy two or three different policies.

Panos: 20:58

And of course, within those policies and, now, some personal examples of, like, personal insurance we take out as a family come to mind, you may find yourself in a way overinsured just by virtue of what we're saying, right? You may get coverage for the same thing both from your business policy and your event liability policy.

Nathan: 21:19

Yeah, so those lines might cross a little bit. Ideally, they don't cross a lot because that would be overinsured and we would not recommend that someone buy multiple policies for the same risk, but there might be some areas where those lines butt up against each other. And in those instances, there are times when the insurance companies will subrogate against one another where claims are filed and those insurance companies figure out who's responsible for what.

Panos: 21:50

Okay, that's very interesting. So going back to the event liability part of things, which is the really important thing our listeners, I'm sure, would be keen to understand a little bit further. So what kinds of stakeholders in the race does it cover? Does it cover my team staff? I'm sure it covers participants in some way but does it extend to staff, volunteers, spectators, other vendors who may be on site - timers, photographers? Like, who does the liability policy cover?

Nathan: 22:23

Well, first and foremost, it covers the name insured. So whoever buys the policy and how they list themselves on that policy, whether it's a corporation, a nonprofit, LLC, or whatever the entity is that is purchasing the policy and hosting the event, that's the primary name insured. And for purposes of our event policy, that's what we're talking about. For instance, with Race Directors HQ members, it will cover the employees, the owners, the people putting on the event. It'll cover their non-medical volunteers. So it's not going to cover if they have a doctor volunteering their time on-site or an EMT or whatever - they need their own coverage. It'll cover just the standard event volunteers that are lending a hand, that type of thing. As far as third-party contractors, timers, etc, the intent is not to pass coverage to those folks. We would advise our client who is a name insured, the event organiser, if they have third-party contractors - which they always do, whether that be timers, whether that be tent rental companies or stage rental companies, or porta potties, or whatever the case may be - that those people not only provide proof of their own insurance policy but they name our insured, the event organiser as an additional insured on those policies. Last week, we had 90-mile-an-hour winds here in Colorado Springs. There's a video out there - a viral video- 40 miles up the road in Denver of a huge handicapped porta potty that went airborne. And when I say airborne, it went 20 feet in the air and

Panos: 24:17

Wow. it was spinning around and fluid was going everywhere, whatever. So when you're hosting events, those types of winds can kick up out of nowhere, right? And that thing goes airborne and someone gets hurt. Well, ideally, our event organiser did not physically move that porta potty on site and stabilise it to the ground and do all the things. Hopefully, they rented that from someone who did those things. And in that instance, our event organiser needs to be covered by their policy - whoever supplied that porta potty, right? And if someone got hurt, that policy needs to defend our event organiser to get them removed from that lawsuit. It should not be their event policy that does that. We're there as a backstop to provide coverage but it shouldn't be a claim because, once an event organiser files a claim on their own policy, guess what? Next year, it's gonna be a lot more challenging for them to get coverage and get affordable coverage and all that stuff. So the proper parties need to be providing coverage wherever that may fall. So you've got a great thing going, you've build a great event that people love from the ground up, and you're ready to take it to the next level. But is your technology up to it? If you've been hacking your way so far using different tools for different jobs, having a so-so website and spending hours moving data back and forth from your registration platform to your email marketing provider and so on, it's time you upgraded your tech before you look into upgrading your race. With RunSignup's all-in-one technology solution, you'll get all the tools you need (and more), all in one place to help you build a solid foundation that will help support your race's growth for years to come. Free email marketing, an awesome free custom website, a fully customizable registration experience, and awesome fundraising and participant-to-participant referral tools are just some of the things you'll be getting when you join RunSignup's industry-leading platform. With that, you get the resources and support you need to get you through the next stages of your growth journey, and an amazing suite of race day tools to help you deliver a world class race day experience to your participants and fans. So, to learn more about RunSignup's market-leading technology used by over 28,000 in-person, virtual, and hybrid events, and to book a free demo tailored to your needs, make sure to visit runsignup.com today. And see what RunSignup's awesome race technology can do to take your event to the next level. Okay, now, let's get back to the episode. What about spectators? If there are people near the finish line, something happens, someone trips over something, would they be covered?

Nathan: 27:15

Yeah. Sometimes, we make statements just like anyone else in a profession would make, assuming that the audience that we're speaking to is tracking with us. But when you say spectators are covered, what I would say is, if a spectator gets injured at an event and files a claim, and it's related to the event operations, our policies would respond on behalf of the policy owner, not the spectator. Now what I mean by that is if the spectator gets hurt and it's race-related, there may be some accident medical aspects of the policy that the event organiser buys that would cover the spectator, to help get them through the injury, the medical bills, etc. But if a spectator does something to injure somebody else, we're talking liability insurance here, we're not going to defend that spectator in a lawsuit if they get sued. We're not picking up the liability for everyone that's present at the event. We're assisting our policyholders with any race-related liability that may come along where they get brought into a lawsuit or something. And with that, there is some extra medical coverage that would extend to spectators, participants, etc.

Panos: 28:49

Let me take you through an example because I was just thinking about that when you were talking about this example of a spectator causing injury to someone in the event. I'm sure we've all seen - speaking of viral videos - the videos of people stepping out on the Tour de France and causing havoc on all kinds of bikes going all over the place. If that happened, let's say you put on a Gran Fondo or a gravel race or something and then one very keen spectator takes it a little bit too far, they step out on the road, they cause a collision with one of the incoming cyclists, and then the cyclist sues you because they would say,"Oh, you should have had barriers. You should have provided a safer event." Would the policy kick in in something like this?

Nathan: 29:35

Again, I can't speak in black and white terms but that is the intent of an event liability policy. And so yeah, in that instance, a savvy attorney or a good attorney representing their client would probably sue the event organiser first because they feel like it should have been a safer course, etc, and maybe there's some insurance coverage there to help with any expenses but they're also going to sue the maybe the spectator for causing the incident in the first place. We would defend the event organiser in that situation. We have a duty to defend the event organiser. And maybe-- we're talking theoretical here. So maybe there weren't barriers there. Maybe the event organiser did not secure the course as it should have been secured and it wasn't as safe as it could have been. So maybe there is some potential liability there. Or maybe there were ample barriers and the person climbed a fence and jumped onto the course or whatever the case may be. So that's where these grey areas come into this discussion and it's very nuanced. But yeah, we would have a duty to defend our client in that situation and help. We do not have a duty to defend that spectator that jumped the rope or whatever the case may be. As far as the actual participant, as part of the event liability, there's a separate policy for accident, medical, participant accident. So we would step in with that line item of coverage and help cover their medical expenses.

Panos: 31:18

That's quite interesting. Now, it's interesting because every question sort of triggers another thing in my mind. So now, let's talk about negligence and gross negligence. Let's say I try and I reasonably do-- and I think reasonably is one of those legal terms, right? I try and do everything I can to provide a safe course. Okay, this is me, good race director, race director A. And then we have a bad race director, race director B, who just doesn't care. They just lay out cables all over. Arches not properly inflated. They're not good professionals. Does me being grossly negligent invalidate parts of my liability policy? Can the insurance actually come back on a claim and say, "You should have done more and you're not covered?"

Nathan: 32:09

Yeah, I mean, again, speaking to the greyness of all of this, when is it proven to be gross negligence? Gross negligence is also one of those legal terms and it may have a different definition based on jurisdiction or state or location. So when is it gross negligence? When is it general negligence? When is it not negligent at all? We would have a duty to defend our insured if they are brought into a claim lawsuit. We would step in and help defend them. When does it cross the line in gross negligence? How is gross negligence defined in that jurisdiction? Does that mean it was purposely done and therefore it's now a crime? And is there an exact crime exclusion within the policy? You have lots of nuances there, lots of greyness and there might come a time when our duty to defend is no longer our duty to defend. We reach a point where that case takes a turn and it's a different situation. So really hard to answer that question. But we certainly have a duty to defend our insured party when they are brought into a claim situation.

Panos: 33:33

I think I may throw an even harder question or two now. So I think you partially answered this which is, in terms of which legal or physical entity gets insured under the contract, if I put on an event under a company, I guess I'd want my company to be the insured party rather than me personally. I guess that's pretty straightforward, right?

Nathan: 33:58

Yeah, for sure. Yeah. I mean, that's pretty straightforward and very typical, especially here in the US where you mentioned that lawsuits, unfortunately, are not a rare thing.

Panos: 34:07

They're a national sport.

Nathan: 34:11

At times, it feels that way, for sure. Not a sport that we particularly want to insure but, yeah, that corporate veil in the US provides a level of protection. So we are not attorneys and we cannot give legal advice. We cannot give tax advice. We're insurance providers. With that being said, most attorneys, I believe, would recommend that an event organiser who's promoting events out there provide some level of corporate protection through incorporation of an entity, whether that's an LLC, an S corp, a C Corp, whatever that may be, nonprofit, that's for event organiser. They should have those conversations with our legal and financial consultants, tax consultants. But typically, there's an entity that is the insured party - not always. It could be a sole proprietor, for instance, where it's that event organisers name on the line. But, typically it's an entity.

Panos: 35:15

Yeah because I was about to ask you-- yeah, it's more of a legal question, I guess. If you take out insurance under an LLC, for example, is there any way that any of these claims can basically cut through to you personally rather than stop at the company level?

Nathan: 35:37

Yeah, I wish there was an attorney on the call with us because, when can they pierce that corporate veil? That's not for me to answer.

Panos: 35:46

Right. Okay. Okay. Fair enough. Easier question then. Equipment. Would that be covered under a liability policy? So, for instance, let's say something happens, my speakers get broken, there's a gust of wind, as you say, and my speakers are thrown to the floor and they malfunction. Would I be covered for replacing the speakers or any other type of equipment that may get damaged during the race?

Nathan: 36:14

Are we referring to the event organisers' equipment or are we referring to--

Panos: 36:19

Yes. To the event organisers equipment. Yes.

Nathan: 36:22

Okay. No, there would have to be separate property coverage in place to cover property. But if we're talking liability where an insured party's equipment somehow injured somebody and we're talking more liability than we are property replacement, then perhaps. I mean, it's liability coverage. If it's your property and something that you're responsible for that potentially caused injury to somebody, then the liability policy may respond to that. But if I have timing equipment or whatever and it gets stolen or damaged or something, that's where a separate property policy would kick in. And we can provide that. We can provide that. That's an option. Property coverage is an option. If it's a property you're moving around, that could be something called inland marine insurance where you're covering your property in transit as you're moving it around, storing it, whatever. So, again, there's a variety of different coverages that we just need to learn about - what you have, what you're doing with it- and provide that advice.

Panos: 37:46

Next thing I want to look at is what a general liability policy sort of looks like, all the little terminology that gets to define the limit of claims and additional insured parties, all of that - just so people are a little bit savvy in reading through the key facts of a policy and understanding them a little bit better - and also how different aspects of a race because there's all different kinds of races that people put on may affect the cost of the insurance or the race being insurable at all. So, do you want to take us through that sort of, like, briefly? What is sort of, like, the claim limit for these policies, deductibles, if there are any? How does the additional insurance work? And then also take us through some examples of where there may be exceptions for certain types of races or increased costs or things that may make races ineligible for coverage.

Nathan: 38:50

Yeah, well, first of all, the typical and certainly the programmes that we provide, the standard limits are $1 million per occurrence, $2 million in aggregate. So any one claim, the limit would be a million dollars to defend-- sometimes, when you talk abroad, most event insurance policies, the defence is considered within the limit. So legal fees that are paid out chip away at that or erode that million dollars. That's typical in the event insurance space. But sometimes, in the broader general liability world, defence costs can be outside the limit. So if you have $100,000 in legal expenses, you still have a million dollars sitting there to cover a potential judgement against you, for instance. So that's something that insurer parties need to ask your agents well, they need to know about. For our event insurance purposes, sometimes there are deductibles within liability policies. Our programmes do not have a deductible on the liability piece, so they would kick in right away, you've got a million dollars of coverage for any one claim, $2 million if you have more than one claim. If you have a claim that costs $1.1 million, you're gonna be on the hook for$100,000 because we've eroded the entire limit. You don't see that very often. It has to be something really bad for that to occur. But there are times when now 1 million, 2 million is not enough and, almost every time that occurs, it's because of a venue that requires higher limits of our event organisers. And we can, within reason, accommodate those higher limits. Sometimes, we see a venue or a municipality or whatever the case may require unreasonable limits - that occurs sometimes - where it's just unreasonable. They're asking for way too much coverage and it costs too much money for our insurance to accommodate that request or it's just not possible within the marketplace. And at those times, we're always willing and able to go to bat for our clients, call up the city, the municipality, the venue, and say, "Listen, guys. Do you want this event or not? Because what you're asking is just unreasonable of them." Oftentimes, we're successful in those efforts. Sometimes, we're not. And if we're not, then the event has to decide to go elsewhere, pay more-- go elsewhere for insurance, pay more for insurance, or go elsewhere for the event, say,"This is ridiculous. We're going to go down the street and find a different venue."

Panos: 41:40

Can you explain-- before we move on to all these different factors that affect cost and things that may make a race ineligible, can you explain this concept of the additional insured parties and how that comes into the policy?

Nathan: 41:52

Yeah, yeah. Just like I was explaining earlier about the porta potty that took to the air, there are legitimate reasons why people would require our insured, our event organiser to name a third party as an additional insured on the policy that we provide. Okay? And most often, it's the venue, or the municipality, or the landowner or whatever. Those are legitimate requests and the programmes that we offer provide unlimited additional insurance as long as it's contractually required. So if the event organiser is under contract with a venue and the venue in that contract requires that they be named as an additional insured to the policy we provide, we can do that, whether there's one request or a dozen requests. As long it's the legitimate contractual requirements we can provide that at no additional costs. There's an initial additional insurance cost that's just part of the overall premium that they pay upfront. And within that, an initial fee that they pay, we can provide whatever the number is without additional costs. So yeah, that's done every day. And what that does is if the venue or the municipality gets named in a lawsuit that's related to the event that our insured put on, our policy would kick in and help defend them in that instance.

Panos: 43:38

Right. So let's say you put on a race in a school or something and then there's an incident, and there is a claim against the school, which was the venue for this. If they were to have been named as additional insured parties on your policy, they would be protected, they would have coverage under the event organiser's policy.

Nathan: 44:02

Yes or no. So we would step in, yes. We would provide coverage, yes. But one specific incident comes to mind when we had an insured party who was a marathon. A large event and it was a marathon took place in a collegiate football stadium. That's where the finish line was. And there were a lot of spectators. It's a really big deal. And that facility had a known trip hazard - like a concrete curb, if you will - within the pathway where all the traffic comes and goes in and out of that facility and it's more than they had-- it was painted yellow, etc. And somebody got hurt. A woman tripped on that and fell and had some substantial injuries. We had named that venue, that college, as an additional insured on our policy and we did step in and provided some coverage. I don't know the outcome of that claim because once claims take place, oftentimes, we're not really involved in the process as it unfolds down the road, but I do know the initial discussion was surrounding, "Listen, that was a known trip hazard. It was a permanent part of the structure of the facility. It was concrete. It was not something that our insured event organiser had any control over at all." And even though we stepped in and provide some initial coverage, there was some head scratching going on, and some legitimate questions as to whether our insured should be responsible for that. It's a structural thing that has to do with the university. My guess is that, ultimately, we provide some initial coverage. We certainly defended our event organiser but whether we extended coverage for the college for very long, I doubt we did. I hope we do because, in my mind, we probably shouldn't. The college's coverage should have stepped in. So again, it depends. That's again an example of the greyness of this subject.

Panos: 46:23

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Nathan: 48:17

Well, first and foremost, the programmes that we provide to your members and others are rated based on the number of participants. So that's the first factor. Then, beyond the number of participants, there's a minimum premium, very inexpensive. It's like, I want to say $125 to start with. And then it goes up from there based on the number of participants. Beyond the total number of things that can increase the cost or the type of events is the distance. Once you exceed the marathon distance, it becomes more pricey. So Ultras are a little more, etc. Whether the run takes place throughout the night, that can increase cost. You touched upon whether there are obstacles. We may or may not want to insure obstacles, so we might decline all together. And if we do insure it, it will certainly cost more because it does increase the exposure or the potential for accidents, for injuries. Those are all aspects that might increase the cost. Whether you serve alcohol, depends on the type of event you're hosting, whether you give one beer via ticket at the end of the event where they can go get a beer and someone else is providing that alcohol - you might have a local brewery sponsoring the event that's they're doing the pouring of the alcohol that providing the alcohol - under that instance, we would provide what's considered hosts liquor where we provide coverage to our event organiser because they're hosting the event but someone else is really responsible for the liquor. That's not necessarily going to impact the cost much. But if you're providing a bar at the end of the event and you're providing the liquor, then you're going to have to buy something called liquor liability, which is enhanced coverage for providing that alcohol, and that's going to be an additional cost. And depending on what that looks like and how you're organising your event - we may dig deeper - you may decide we don't want to cover that event. We had an event recently that it came to our attention that they were providing alcohol on the course. So every mile or so, you got to chug a beer or something. That's not necessarily what we're looking to insure. So depending on what you're doing out there and the structure of your event, it may cost more, it may be deemed that you're uninsurable together as far as we're concerned. We might politely ask you to look elsewhere for that coverage. We're not necessarily looking to insure pub crawls for an example.

Panos: 50:59

Okay, that makes sense. That makes sense. Which takes us very neatly into the very interesting area of liability waivers. In the race directors group we have on Facebook, Race Directors Hub, there are often questions around liability waivers. And I think there's a general confusion about waivers in the industry. There's people who would tell you 100% that they're not worth the paper they're written on or, like, the bytes they're written on - these days being electronic, and other people who say, "Oh, you absolutely need them. Yes, they will provide solid protection, etc." Where does the truth lie in all this? Is it one of those"Depends" grey type of things? What's the role of a waiver in terms of the policy that you're taking out?

Nathan: 51:52

Well, all I can speak to is the way we view waivers. Again, I cannot provide legal advice. But from our perspective, the answer is yes, you absolutely need a waiver with the caveat that you need a waiver if you want to buy coverage from us. So we require that you get waivers signed by 100% of all of your participants. That's a requirement for insurance coverage. We do not ask to see proof of those waivers but we do require that they be signed. I spoke and I hosted a discussion at a client conference recently- it was for the Cross Country Ski Areas Association - and I cohosted that discussion with a local attorney in the area who is very well-versed on this topic. So I learned a little bit in that process and one of his advice was, yes, you absolutely 100% need waivers signed. And not only do those waivers need to be written and provided by an attorney but they need to be written and provided by an attorney in the jurisdiction where the event has been held - very, very important distinction in my mind. So, if you're a large event operator and you host a dozen events throughout the country, you probably need to speak to a dozen attorneys and a dozen different states and make sure that whatever unique laws on the books for that jurisdiction be considered when those waivers are being written.

Panos: 53:31

Okay. So I guess then, for the policies to require that and for your legal co panellists there to suggest that yeah, you need to get those things, I'm guessing that is because they actually stand up in court or they have to have some kind of value or utility in court. Right?

Nathan: 53:53

In my opinion - that's all I'm offering here - they will certainly be introduced in court and pointed to and if there's a jury sitting there, that jury might say, "Well, yeah, listen to the wording of that document that this person signed. They're well aware of the risk that they were undertaking." Whether that holds up or not, that's not for me to determine, but it's certainly one more aspect that can be introduced and discussed within litigation.

Panos: 54:27

Do you know of any examples by experience where waivers would have been presented at court and try the court and we may have some precedent of how they hold up?

Nathan: 54:37

Not immediately come to mind. I'm sure I can provide some instances. But you might also want to really consider that a lot of litigation was probably avoided altogether because someone signed a waiver.

Panos: 54:55

Okay, that's interesting.

Nathan: 54:56

If you're of the mind that you might want to sue somebody and you read the document that you signed saying,"I understand the risk in the activity that I'm participating in," that might make me reconsider whether I'll hire an attorney and go down that path altogether.

Panos: 55:16

Okay, that's very interesting. Yeah. Because of course, legal procedures also have their costs. So you're saying that basically having the waiver is a good cheap defence-- yeah, it's a deterrent, as you said. Yeah, exactly. So basically, people would think twice, having signed a waiver, which is--

Nathan: 55:34

They should. They're giving their word. They're stating that they understand what they're doing and that there's risk involved in what they're doing. If they happen to trip in a pothole on the course that's a 10k course and it's a municipality, it's public streets, and they trip over a curb, there's different mindsets, different people out there, different personalities. Someone might decide that the event organisers should be held liable for that and someone might decide, "You know what? I was running a race - 10 kilometres - and there were obstacles out there. There's things that happen and, yeah, I signed this waiver and I'm not going to point fingers. It was my responsibility."

Panos: 56:19

Okay, great. Now, next thing I want to look at, and I have to say that this is probably, for me, the most fascinating aspect. When I was doing my research, this was the area where I personally had the most questions, which is around the claims process itself. So basically, what I was wondering is, okay, you have the policy, there is an incident - let's say, the one you mentioned about the tent collapsing and someone getting injured - they sue me, the event organiser. I have to go out, hire a lawyer, defend my case to all kinds of stuff. How does that work in terms of the policy? Like, do I basically take the lawyer bills and pass it on to the insurance company? Or do I have to pay them out of pocket and then I need to file a claim against my policy to get reimbursed? Because these amounts can run into really, really large amounts of money. So even if I do get exonerated at the end, do I run the risk of running out of money before I get there?

Nathan: 57:24

Good question. Again, we're talking in very broad strokes today, so I can't say. Policies are written in all different ways and I can't speak to every policy out there. In our experience and the programmes we offer for event liability, you ask, "What's the process?" Well, first and foremost, you document everything. If you have a situation arise at your event, we highly recommend that you begin immediately documenting everything, taking pictures, recording when appropriate, audio recording when appropriate. You simply document the situation in its entirety. Every aspect of the situation that you can document, you document. You spoke to that situation that we recently had where a tent fell and a claim subsequently occurred. You know what they did, Panos. They threw that tent away. It was gone. That's evidence that may potentially be introduced in litigation. You do not throw things away. You preserve evidence. Anything related to that instance needs to be preserved and documented. First and foremost, you pick up the phone and you call us or the insurance carrier on the policy and there's a claim form that asks your name, your policy number, the event date, the event name, all the details, and you have to provide that immediately. And you do that before there's an actual claim. You do that when you have a hint that there might be a claim, when there was a situation that occurred. Black and white, there's not a claim to file until there's a lawsuit on a liability policy. There's nothing there until there's a lawsuit, until you're being accused of something. But we still want to be notified because we can help you in the early stages of an incident and hopefully solve the incident without any kind of claim or accusations. Again, for one, there is a medical aspect to event insurance and we would very quickly step up if someone's injured at an event and help cover their medical expenses to help resolve the situation right up front. That would be our goal. So you always notify us as quickly as possible, with as much detail as possible, beginning with the form that we provide. And then you just document everything. You asked about payment of?

Panos: 1:00:12

Yeah. I'm thinking about the cash flow dynamics here. So I go out, I hire a lawyer to defend myself. Do I send the lawyer invoice to the insurance company and don't pay anything out of pocket? I'm thinking of like-- the only other experience I have that might be similar to this is private health insurance. And with private health insurance, at least over here in Europe with most policies, what happens is you pay and then you get reimbursed which, of course, when we're talking about legal fees, it can create, like, a big cash flow issue, right?

Nathan: 1:00:53

It can get very large very quickly. So yeah, I understand the question. Relating back to what I just said about notifying us immediately, we will help in that situation where, hopefully, you don't start adding up legal fees, etc prior to these discussions. So we will be involved before there's an actual claim or an attorney to be hired. The insurance carrier and their claim adjusters and their claims teams will step into the situation and help the insured party but you have different coverage line items here. So when you ask about reimbursement or if the insurance company pays the bills, it depends, again. If it's accident, medical, if someone breaks a leg, whatever the case may be, they get injured, they go to the hospital, in those situations, most participant accident policies are-- like you mentioned in the UK or wherever, it's a reimbursement model on the medical side. So you will start to get those bills in the mail. Oftentimes, the insurance carrier doesn't require proof of payment, but they need to see the bills that you get. You provide those bills. You might pay them. You may wait till you get reimbursed, whatever, or get the check in the mail and then pay them. Timing could vary. But in the accident medical world, typically, it is a reimbursement-type model. On the liability side, speaking of legal fees, it started to add up. Typically, the insurance carrier is notified ahead of time, hopefully, and they step in - and they have far more experience in event liability claims than any one of the event organiser out there, hopefully - and they would potentially even assign counsel. Like they would help you pick an attorney, help identify the attorney in that jurisdiction that would be most helpful in a very rare situation with the insurance company ever paying the insured. So typically, there is no out-of-pocket expense for the insured. The insurance company steps in to work with legal counsel. Most insurance companies are not going to require that they pick the legal counsel but they will work with you on that, and then they will work with legal counsel on those legal fees.

Panos: 1:03:42

Okay, perfectly clear. I thought it was an important aspect of this to touch on because - having the policy is one thing, potentially running the risk of being bankrupted even when you're sort of in the clear simply because of the timing of things - it's something that I think will put a lot of people's minds at ease, provided, as you say, that they go about it the right way, which is document things, reach out even preemptively to the insurance company so they can help you with your claims along the way and maybe, in some cases, even assigned counsel.

Nathan: 1:04:20

The only time you could potentially be bankrupted by a lawsuit if you're an event organiser-- I don't want to say only because, again, there are all kinds of nuances out there. But if you choose not to buy a liability policy and you are self-insuring, you are playing Russian roulette and you very well could end up losing a lot in your life. So not only are you required to carry liability insurance by the venues, etc, but you should never host an event without an event liability insurance policy for this reason alone. You should not be put in financial peril if you have a properly written liability insurance policy.

Panos: 1:05:09

Yeah, absolutely. I completely agree. I mean, there so many things. It's not like race directors sleep well at night even with insurance policy- there are so many things to think about. So, you definitely don't want to be jeopardising your life after race day by taking on this kind of risk. Definitely, definitely not. Particularly since we're talking- and I think people who have been insured through both your programme and other programmes would know that - liability insurance is really, really affordable. I mean, we're talking, for most events, it's like, as you say, minimum premium of, like, 100 and something bucks. And then, for most events, given the size of most events, we're talking about, like, a few hundred dollars. It's a cost that you should be able to afford. If not, you should be baking it into your entry fee or your budget or your economics. It's an absolute sort of no-brainer in terms of expenses. You don't want to be cutting corners or cutting costs on that.

Nathan: 1:06:07

Absolutely. It should be the foundation of your event, the very first thing you get.

Panos: 1:06:11

Absolutely, absolutely, I totally agree. Now, one thing, of course, that we also used to get lots and lots of discussion in our group about - bless all these days because there are not that many virtual events around- is virtual event insurance. And we also have very strong views on that from people. There's the group of people that are like, "Oh, it's virtual. There's nothing to insure." And there's, of course, the other group of people, mostly Americans, I should say, who are very, very well versed in lawsuits that are like, "Oh, no. You definitely want to be insured even if you put on a virtual event." So again, I don't want to spend too much time on this because there are not that many virtual events around these days, but give us your take on virtual event liability insurance. Do people need it?

Nathan: 1:06:59

Yeah, it's a quick answer. If you're hosting your event in the United States, virtual or live and in-person, you need event liability insurance, and the people that would question that, they have not been sued. Anyone can sue anyone for any reason, whether it's legitimate or not and you're gonna have to defend yourself, and that's why you need to spend a few hundred bucks, which would be the equivalent of half an hour of an attorney's time to buy you an event liability policy.

Panos: 1:07:37

And that, I guess, extends beyond the fact that you may be putting on events for profit. So this would also apply if I'm putting on a virtual event from out of a nonprofit organisation, because I can see why you may need insurance for a for-profit. People would say,"Oh, you're on the hook because you're making money out of this, so I can sue you." Even if you're not making money out of this, you would still need a policy like this for your virtual event.

Nathan: 1:08:05

Well, again, the short answer is anyone can sue anyone for any reason. So yeah, if you're hosting an event, you're telling someone to go do something, to participate in your virtual event, it can be argued that you're putting them out there and, when they get hurt, they can sue you. Whether that's legitimate or not, the courts will determine, but guess what? You're gonna be paying those legal fees.

Panos: 1:08:27

Interesting. I know it's difficult for some people - myself included - up until I started talking to you about this, wrapping their heads around the whole thing of like,"Why would I get sued if I just say, 'Go out, run 5K, and we'll send you a medal.'" But as you say, you can get sued for all kinds of things. And in some cases, I have to say, because there were some examples you sent over that I had a look into, some of them are legitimate, very nuanced, very subtle arguments. They're not like people making things out of thin air, right? I mean, sometimes, even for a virtual event, you'd be surprised how it may come back and bite you and how someone may have grounds to sue you even for a virtual event.

Nathan: 1:09:12

Yeah, yeah. Once a case enters the courtroom, there's a lot of twists and turns. There are some famous ones here in the US and there's one unfolding on live news channels as we speak, and who knows what direction that case will take?

Panos: 1:09:30

Indeed, indeed, we've crossed the hour mark. So I don't want to spend too much time on my final topic, but I think it's really important to also provide people with a little bit of information around that, which is cancellation insurance, right?

Nathan: 1:09:42

Yep. Yep.

Panos: 1:09:43

Well, it used to be the talk of the town back with COVID. We did a whole episode on that. In fact, as I said, podcast episode number one here on Head Start on event cancellation insurance, COVID, what happens to my event under COVID and all of that? Of course, cancellation insurance is still very, very relevant in many cases where you have wildfires, earthquakes, all kinds of things. Terrorism, of course, is one of the things you may have to cancel for. Can you give us a quick description of the cancellation insurance product and, basically, what kind of contingencies and causes are covered under that - under, like, a typical cancellation policy?

Nathan: 1:10:22

Yeah. The big three are kind of adverse weather, natural disasters. So adverse weather - thunderstorms. Typical day-to-day stuff. Natural disasters, like you mentioned, forest fires, flooding, things of that nature. And terrorism, which everyone understands. We see probably more event cancellation claims today than ever because, for whatever reason, there's a lot of natural disasters out there. Whether you believe it's climate change related or not, they're occurring and they're occurring at an increased level than what we've ever seen before. Here in the US, we will have multiple years of drought in the western US which stresses our forest out and causes forest fires, and you might have a fire in California and there might be a cancellation in New York State because of that fire depending on the jet stream we saw last summer. Air quality is a real thing and a real reason for events to be cancelled. That's been one of our largest claim drivers in the last few years and it may not be your direct proximity to that fire, you may not be close to it. You may be half a country away. But depending on the way the wind is blowing, you might have an unsafe situation on race day related to a fire that's hundreds of miles away. We've seen it happen multiple times. There are a lot of hurricane cancellations. Probably our number one cancellations are still just the random thunderstorm, lightning on race day and it's just unsafe. So any number of situations can cause a cancellation. I always tell the story, we had an event-- I'm not going to get into the details because it takes too long, but we had an event with cancellation coverage from us for the very first time and this event was like a 30-40 year event. It happened year in, year out, never cancelled like clockwork. They never had insurance before. They questioned the need for it. They bought it from us. First year, let me think-- I gotta think this through. First year, they had almost no claim because of terrorism. There was an individual in their home community mailing bombs - letters and mailboxes that were exploding - and they were concerned that they might have to cancel because of that. Thankfully, the person was caught before the event and there was not a problem. That was year one. Year two, they had a million-dollar claim because of a thunderstorm, lightning on the course. They had a claim. Year three. COVID year, they had bought their policy in the window of time where we were still providing communicable disease coverage for free. It didn't even cost them anything more. Year three, they cancelled their event because of COVID. We paid another million-dollar claim. This is an event that has been hosted for 30 or 40 years without a problem. Three years in a row, they almost had to claim. They did have a claim in two of the three that we paid. So you never know. You never know.

Panos: 1:13:41

Well, indeed. I mean, that's the whole point of insurance, right? I mean, it's Russian Roulette and you really don't want to be on the receiving end if something goes wrong with that.

Nathan: 1:13:51

Yeah, pre-COVID, Panos, I would say that the daily argument that we would have from event organisers about not buying it up, "I've been doing this for 20 years. I've never filed a claim," then COVID came along, every event out there got cancelled. And during that timeframe, I truly anticipated laws being established in various states that were going to require event cancellation because people were not getting their money back for events that they registered for legitimate reasons. The event organiser didn't have the money. The expenses have been paid out. But I thought that because it was such a hot button at that time, people were gonna require refunds to be paid out. Right? Well, now we're post-COVID and everything's rosy again, it's almost like people have forgotten the situation. But if you're a well-established event organiser in today's society with social media and the fallout from having to cancel and not give refunds, most event organisers today, none of them can say they've never cancelled before. They've all had to deal with it and the well-established, well-run events are now buying event cancellation coverage because it's more important. I should say it's more expensive than ever but there are options today for events, no matter what the size to provide coverage.

Panos: 1:15:17

Yeah, absolutely. And in terms of the amounts that are covered by a cancellation policy, what would be covered under that? Would it be just the registration fee that gets returned to the participants? Would it be other out-of-pocket expenses that I may have made during the planning of the event? Like is it the gross, the net? What exactly gets reimbursed?

Nathan: 1:15:43

So these policies can be written any number of ways. You kind of tell us what you want covered, we go to market for you and have a policy designed that way if we can find a carrier willing to do it. Most of our policies are either we have a programme that only covers refunds. So that's one option, where you can buy coverage, buy protection, that if you have to cancel due to a covered peril, we give everyone their money back and that's it. The event organiser walks away as if the event is taking place. So that's option one. Option two is a more customised policy that an event organiser comes to us and says,"Here's what we need covered," and we go to the market and we talk to our insurance carriers and try to customise something for them. Most of the time, if it's a standalone policy that an event organiser buys, they either choose to cover their expenses or their revenue, typically, whatever is the largest number. If it's revenue, it can be registration fees, that's the biggest component plus maybe sponsorship dollars if it's a really large event and they have large sponsors. And sometimes, if it gets cancelled right before the event takes place, we may not have to refund the sponsors 100% dollar for dollar because they've been promoted for months leading up to the events, so some of the value has already been recognised. So that's where our claim adjuster would step in, and work with the parties to determine what's fair.

Panos: 1:17:27

Okay. But I just want to clarify something here about the policy. I think I know the answer to this one. But let's say I have a cancellation insurance policy and, in many cases, in order for a race to take place, there needs to be - particularly with trail races - like, a tonne of different permits that I need to take out, and in many cases, race is open for registrations before these permits are obtained in the hope that these permits-- and more than hopefully that these permits will be obtained by race day. But sometimes, they don't actually come through. So if I have to cancel an event because, let's say, national parks or a municipality or something denies a permit, would that be covered under a cancellation policy or not?

Nathan: 1:18:19

No, that's not typically a covered peril. Most of the covered reasons pertain to safety concerns on race day. It has to be a real safety concern. We don't cover general administrative issues that might arise or poor promotion of them and you didn't sell as many entries as you wanted and, therefore, you're going to lose money and you cancel. Sorry, that's your risk of doing business. That's not an insurable exposure from our vantage point.

Panos: 1:18:55

Okay, what about postponements? Would I be covered if, instead of cancelling an event, I just postpone it? And of course, there are associated costs with deferrals, deferred entries, refunds, part refunds, and all of that stuff.

Nathan: 1:19:06

Yeah, potentially. So the programme that is really popular that we offer that only provides refunds for registration fees does not specifically cover postponement, it only covers cancellation. So in that situation, no. There's actually a clause that says you cannot reschedule your event within 90 days. It has to be cancelled. However, if you actually purchase a standalone policy then, most of the time, those are very broad and they do help cover the expense related to postponement. So an insurance company, obviously, is a for-profit entity and they want to help you find the most economical path forward. If there is an option for postponement and that is more economical for you and for them, they will assist you in that. But oftentimes, the race calendar is full, there's not an open date, etc, and there's just no way to reschedule, so you have to cancel. It just depends.

Panos: 1:20:12

Interesting. And in terms of cost, last question on this, you did say that, generally, cancellation policies - and I think it makes sense - are more expensive than liability policies. But the cost is coming down.

Nathan: 1:20:26

No. That was kind of a misstatement possibly on my end. The cost is going up but there are more options than ever for event organisers to build it into the cost of their event, where they may not necessarily have to write a check for it or budget for it in advance. But if you're buying your own standalone policy which is what the largest events or you may be required to do by a venue or whatever, if you're buying your own policy that's customised or very broad and coverage, for the most part, those are more expensive than they were a few years ago for obvious reasons. The cost of coverage has only gone up along with everything else in this world with inflation, etc.

Panos: 1:21:12

Right, yeah. But beyond inflation, it's mostly around the fact that the incidents have increased due to more severe weather and all kinds of stuff.

Nathan: 1:21:23

Absolutely. And even though COVID is, thankfully, far in the rearview mirror, insurance companies are still dealing with the economic fallout of millions and millions and potentially billions of dollars that were paid out during this timeframe. So, this is a relatively small marketplace - number of insurance companies that provide event cancellation. And if you have a very large marquee event such as maybe the Olympic Games or something, there might be a billion dollars of coverage or something that's related to an event. In that situation, you're not going to have one insurance company covering that. They're all going to share in the cost. And if there's a claim of that magnitude, they're all dealing with losses, and those losses are on their books for a while. And therefore the entire industry is adjusting rates to deal with that fallout. So even though it's something unrelated to you, a world away, it still is related to you in a general marketplace that everyone's kind of sharing risk.

Panos: 1:22:32

Yeah. And for people who want to know more about all of that stuff, they should go back and listen to our first episode on the whole cancellation insurance during COVID situation- lots of anecdotes in there, the things you mentioned about carriers getting into trouble and how the whole industry works. So if you want to learn more about that side of things, do go back and listen. It's the very first episode of the podcast. Nathan, I think we've covered a huge amount of ground here and lots of very, very helpful information for our listeners. How can people get in touch with you if they have further questions on any of the things we may have discussed - they want to discuss their option around cancellation liability, other types of insurance?

Nathan: 1:23:14

Simply go to our website, NicholasHillGroup.com. If you are a member of Race Director HQ, we have a dedicated page for you where you can learn about the different event liability and event cancellation policies that we've made available that are custom priced and designed for you and we would love to assist you. Unlike a lot of organisations, we love to talk. You can call us. Our numbersare right on our website. You will either get us directly or, if we're on the phone, you will get our voicemail but we promise to call you back. And yeah, we invite you to call. It's probably my largest pet peeve in my life when I cannot reach somebody by phone when I have a question. So we try not to operate in that manner. Call us anytime.

Panos: 1:24:03

Absolutely, absolutely. I know lots of our members and other people - not only our members because you do offer your products through other organisations as well. They are very, very keen on the service you guys provide and we're all very thankful that you came into the industry and you're offering these products at a pretty competitive price and helping more races and more race directors sleep better at night. So thank you very much for coming on to the podcast once again with this very informative discussion. Thank you very much to everyone listening in. And we'll see you go on our next podcast.

Nathan: 1:24:41

Thank you, Panos. It's our honour to have the opportunity to provide a service to you and your members and the event organisers out there in the world. So thanks for the opportunity.

Panos: 1:24:56

I hope you enjoyed today's episode on race insurance with Nicholas Hill Group partner, Nathan Nicholas. You can find more resources on anything and everything related to race directing on our website RaceDirectorsHQ.com. You can also share your thoughts about some of the things discussed in today's episode or anything else in our Facebook group, Race Directors Hub. Many thanks again to our awesome podcast sponsor, RunSignup and Brooksee for sponsoring today's episode. If you'd like to learn more about these two amazing companies, head to runsignup.com, where you'll find just about everything you could possibly need to set up your race for success, including industry-leading registration tools, a professional free race website, free email marketing tools, and tonnes more. And don't forget to check out Brooksee's new innovative Laurel timing technology, giving you real-time tracking of participants and a Virtual Command Centre for your race, by visiting brooksee.com/headstart where you can also get a massive 50% off your first booking. Until our next episode, take care and keep putting on amazing races.