Insuring Your World - Fall 2003 Vol. 7

	Is the Party Over? Once upon a time the annual office holiday party was unlikely to make the list when risk management was on the agenda. But times have changed, and alcohol-related liability has expanded dramatically over the past two decades. The numbers and types of civil suits against alcohol providers and others who are deemed responsible for the intoxicated has increased significantly across Canada, particularly in Ontario, Alberta and British Columbia. The scope of alcohol-related liability is far broader in Canada than in the US, and liability is not limited to bars and other commercial establishments. Claims have been brought against universities, service clubs, government alcohol outlets, private and business social hosts, common carriers, police, and other sponsors of alcohol-related events, including employers hosting business functions. The bottom line is, any organization that serves alcohol to its employees or to others, or permits employees or others to consume alcohol on its own or rented premises, is deemed by law to have a responsibility toward its guests. The courts have stated that the responsibility (duty of care) increases where there is a special relationship such as employer/employee. The duty of care specifies that one must not serve so much alcohol that it could lead to someone becoming drunk. It also states that, should someone become intoxicated, the duty of care extends to ensuring that the impaired person does not cause harm to him/herself or others. It also extends to the situation where intoxication occurs on the premises though alcohol was not actually served. As a business social host, you are obligated to monitor and supervise the service and consumption of alcohol during an event to prevent or limit intoxication. Even if alcohol is permitted but not served at an event, as an employer you are under the same obligation. So, is the office party really over? No, but you do need to protect your business and your employees by following these important guidelines: 1. Be Ready for Anything If you are planning a business event where alcohol will be present, make plans to appropriately deal with any alcohol-related problems that arise, or could reasonably be expected to arise. This could include providing taxi chits, discounted hotel room rates, volunteer Designated Drivers, etc. 2. Tell Them and Tell Them Again Ensure that employees are aware that alcohol will be served at the event and that they are expected to drink responsibly. Offer attractive alternatives (such as special room rates) that might encourage employees to leave their vehicles at home. Provide messaging at the event regarding alcohol consumption, (perhaps a discreet sign or notice at the bar), as a reminder to limit alcohol consumption. 3. Food, Food and More Food Ensure that food is served throughout the event. Avoid excessively salty and sugary foods and provide plenty of non-alcoholic beverage alternatives. 4. Manage Risk DON’T underestimate the potential legal consequences, criminal and civil, should your insurance be insufficient to cover damages associated with alcohol consumption at the event. Talk to your Lackner McLennan commercial insurance professional to review your commercial insurance coverage and determine whether your event warrants additional, temporary insurance coverage. More and more exclusions are being developed and there is often insufficient insurance for the claim if an incident results in serious injury. Know what is covered – and what isn't. 5. Make it Part of the FUN Strategies for preventing intoxication don't need to spoil the fun. Place everyone's car keys into a bowl at the beginning of the event. Then, have a designated non-drinker observe guests while they look for their keys – how easily they identify them can be a good indication of whether or not they are under the influence of alcohol. And offer a prize for the quickest pick!
	Reducing Insurance Costs If you think reducing insurance costs for your business is ‘Mission Impossible’, think again. There may be ways to reduce your premiums, with help from Lackner McLennan. Property Value In the wake of a catastrophic event such as fire, your building would need to be rebuilt. However, since the value of your property includes the land, remember that only the cost to rebuild the building should be insured. It’s also important to base the assessment on current rebuilding costs: these may have increased over time, but are just as likely to have decreased due to changes in technology or materials. A building appraisal by a certified Building Appraiser is recommended. Building vs Contents In most cases, the rate to insure a building and the rate to insure its contents varies significantly, due to the ease with which the contents of the building could be removed. If expensive equipment, (manufacturing or packaging, for example), is permanently fixed to the floor, walls or roof - and thus too difficult for thieves to remove quickly - it may be possible to get a reduced rate and thereby reduce applicable premiums. Deductible Increasing the deductible on a larger building or fleet of vehicles could, in a relatively short time, result in sufficient savings to cover the cost of the higher deductible in the unlikely event that a loss is incurred. Safety Programs In some industries insurance costs can be reduced by having employees participate in voluntary training or safety programs – this may also reduce Workers Compensation premiums. In addition, in the case of fleets of vehicles, driver/operator safety programs and certification opportunities may also provide an opportunity to reduce insurance costs. Data Storage Keeping computer backups off site reduces or eliminates the need to have data and media coverage. At Lackner McLennan, for example, we have three levels of data backup and storage to ensure data integrity and to safeguard our clients’ information. Updated Business Profile Changing economic climates affect your business in many ways, and possibly could include lower insurance premiums. If you have decreased the number of employees, sold equipment or reduced inventories, your premiums may actually be lower than you think. Consider these options and contact Lackner McLennan to update your business profile and review your unique commercial insurance requirements.
	Rudely Interrupted Most people wouldn't consider opening a business without buying insurance against fire, theft or other damage. But many small to medium-size business owners don't consider that the aftermath of such an event could be a situation where their business is temporarily inoperable. That means lost time and lost business - and the need to meet financial obligations, regardless. Business interruption coverage can be added to a commercial property insurance policy or included in a commercial package policy. This insurance compensates for lost income if your company must vacate its premises due to damage covered under your property insurance policy, such as a fire. Business interruption insurance covers the profits the business would have earned, based on its financial records, had the disaster not occurred. The policy also covers operating expenses like electricity that continue though business activity has come to a halt. It can take more time than many people anticipate for a business to resume operations, and that makes business interruption coverage an absolute necessity. The price of such a policy is determined based on the risk of a fire, theft or other disaster impacting the business premises. For example, the premium would likely be higher for a restaurant than a business services office, because of the greater risk of fire, and because the business service company is likely able to operate out of another location if necessary. There are several forms of business interruption coverage available. These can be in the form of Gross Earnings, Profits or Actual Loss Sustained. The choice of business interruption insurance should be based on the unique needs of your business, so talk to your Lackner McLennan Commercial Insurance specialist to review your specific requirements. With many extensions available such as power interruption or damage at suppliers or customers premises, it is possible to create a customized package that minimizes risks and cost while maximizing protection for your business.