FYI:

Managing Special Event Liability

- Michael Hammond

Don't let it rain on your special event! Identify and assess the specific risks that could derail your event, and determine what insurance coverage may be needed. Are you ready to deal with unexpected large crowds, unpredictable weather, alcohol and food service, on- site volunteers, permits, contracts with vendors, certificates of insurance, security details and parking?

Special events risk management requires the careful identification and evaluation of potential mishaps associated with a special event and the use of tools to manage risks appropriately. Purchasing insurance for the special event is one means of transferring the risk in exchange for a fixed premium. However, insurance should not be a substitute for an overall commitment to manage risk.

Identifying and Evaluating Risk: Many special events pose unique risks including facilities selection and management, serving of food and alcohol, entertainment concerns, transportation and parking issues, outdoor hazards, use of volunteers and partnership ventures.

The proper selection of a facility is key to a successful event. The facility should be inspected pre-event, during the event and post event to address any identified risks or hazards. The "Safety Czar" should conduct a thorough inspection of the site.

Nearly all events involve some type of food or arts and crafts sales. Vendors are independent contractors and should be required to sign hold harmless agreements protecting the event organizer. In addition, they should be required to provide a certificate as evidence of their insurance. If the vendor does not carry insurance, you are placed at risk as the event organizer and may be held liable. Someone should be responsible for reviewing all insurance certificates and vendor agreements before every event.

Another factor to consider is parking arrangements. If you plan to provide parking aides, make sure they are well-trained and supervised. Provide them with reflective vests and flashlights if it's an evening event. Also, make certain that lighting in the parking areas is adequate for the safety of attendees and parking aides. If cars will be parked in any area other than a paved and well maintained lot, consider slip and fall hazards due to uneven surfaces.

Outdoor events require special considerations. Will attendees be able to move to an area out of the hot sun? How will you deal with inclement weather including lightning? Are there any special hazards at the location or the adjoining property? Are there ample toilet facilities? Is a first-aid tent centrally located? How will the area be secured and is there access for emergency response?

Risk Sharing Tools: As mentioned previously, the use of available risk sharing tools, such as the purchase of insurance or partial risk transfer through a contract, can minimize the potential liability associated with special events. There are generally two types of situations where insurance should be considered.

Tenant/User Events: Company, organization or individually sponsored special events or activities held on city premises should be considered for appropriate risk transfer. Examples of these events include fairs, carnivals, festivals, concerts, parades and other activities involving vehicles, animals, large crowds, concessionaires, rides or the sale of alcohol. MVRMA recommends the third party event organizer obtain insurance coverage with limits no less than $1,000,000 per occurrence for bodily injury and property damage, including operations, products and completed operations. If the event or activity presents no substantial health or safety risk, the city may waive this requirement.

City Sponsored Events: City sponsored events are generally covered by MVRMA. However, these events pose a threat of loss which, if incurred, would increase the city's loss experience. To avoid that potential, we recommend applying for Special Event Liability Insurance through the MVRMA office. This coverage is a pass through expense and generally has no deductible. It can be expanded to cover co-sponsors and additional insureds, if desired.

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Counselors' Comments

 - Dinsmore & Shohl

Seventh District Rules Intentional Tort Statute Unconstitutional

The Seventh District Court of Appeals has ruled that Ohio's latest version of the employer intentional tort statute (R.C. 2745.01) is unconstitutional. Kaminski v. Metal Products Company, et al. (Ohio App. 7th Dist.), 2008-Ohio-1521. To recover under the statute, an employee is required to show by "clear and convincing evidence" the employer acted with "deliberate intent" to injure. R.C. 2745.01. Although Kaminski is the first Ohio appellate court to address the constitutionality of this latest version of R.C. 2745.01, the Ohio Supreme Court has found previous versions of the statute unconstitutional. The employer in Kaminski has appealed the decision to the Ohio Supreme Court, which is expected to review the case this fall.

As a general rule, an employee's exclusive remedy for on-the-job injuries is afforded by the workers' compensation system. However, in 1982, the Ohio Supreme Court made an exception to this general rule and held that a claimant could maintain a common law action to redress an employer's intentionally inflicted harm. Blankenship v. Cincinnati Milacron Chems. Inc. (1982), 69 Ohio St.2d 608. Following Blankenship, the Supreme Court issued a line of cases which set forth the parameters of the proof required to establish an "intentional tort." Under the common law standard which developed, an employee need only prove by a preponderance of the evidence that the employer required the employee to perform some act knowing that an injury was "substantially certain" to occur. See Fyffe v. Jeno's Inc. (1991), 59 Ohio St.3d 115; Hanna v. Dayton Power & Light Co. (1998), 82 Ohio St.3d. at 487.

In response to the Supreme Court decisions, the Ohio General Assembly made several unsuccessful attempts to codify what constitutes an employee intentional tort, and to impose a heightened burden of proof on injured employees. First, in 1986, the Ohio legislature passed former R.C. 4121.80, which relegated intentional tort claims to the realm of workers' compensation, where an injured worker was allowed to seek damages, but where a jury trial or judicial determination of damages was specifically foreclosed. The Ohio Supreme Court found former R.C. 4121.80 unconstitutional because it exceeded and conflicted with the legislative authority granted to the General Assembly. Brady v. Safety-Kleen Corp. (1991), 61 Ohio St.3d 624.

Thereafter, in 1993, the General Assembly passed a second intentional tort statute, which came in the form of R.C. 2745.01. However, like R.C. 4121.80 before it, the Ohio Supreme Court declared R.C. 2745.01 unconstitutional. Ohio AFL-CIO v. Voinovich (1994), 69 Ohio St.3d 225. This time the statute was found unconstitutional because the method by which it was enacted violated the one-subject rule of the Ohio Constitution. Id. Undeterred, the Ohio legislature issued a revised version of R.C. 2745.01 in 1995. Again, the Ohio Supreme Court found this revised version unconstitutional, reasoning that because R.C. 2745.01 imposed excessive standards (deliberate and intentional act), with a heightened burden of proof (clear and convincing evidence), it was clearly not a law that furthered the comfort, health, safety and general welfare of all employees. Johnson v. BP Chems., Inc. (1999), 85 Ohio St.3d 298, citing Brady, 61 Ohio St.3d 624.

Finally, the General Assembly enacted this latest version of R.C. 2745.01 in 2005. In ruling that this new statute is again unconstitutional, the Seventh District Court of Appeals set forth little in the way of its own analysis. Rather, the Kaminski court simply reasoned that "[g]iven the [Ohio Supreme] Court's past holdings regarding R.C. 2745.01's predecessors, it is reasonable to conclude that the General Assembly's latest attempt at codifying the intentional tort law is unconstitutional as well." Kaminski, 2008-Ohio-1521.

Currently, the Kaminski decision is binding only in Ohio's Seventh District, but other districts are free to rely on Kaminski if they so choose. In that regard, while the Supreme Court's history relative to Ohio's intentional tort statutes is a matter of concern for Ohio employers, the more recent trend of the Ohio Supreme Court has been to uphold the constitutionality of legislative attempts at tort reform. See Arbino v. Johnson & Johnson, 2007-Ohio-6948 (upholding the constitutionality of a state law limiting the amount of pain and suffering damages a person can collect in certain tort lawsuits). See also, Groch v. General Motors Corporation, 2008-Ohio-546 (upholding the constitutionality of the ten year statute of repose in product liability claims). As such, there is hope that other Ohio courts will not be persuaded by the Seventh District, and that the Ohio Supreme Court will grant the Kaminski employer's appeal and uphold the constitutionality of the legislature's most recent attempt at tort reform relative to employee intentional torts.

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The Claims File

- Craig Blair

In early August, I will be contacting each member to schedule the annual claims audit. At these meetings, I will discuss pending issues, answer claim questions, review claim files and provide an indication of how each member's loss experience may impact its 2009 PCF.

For many of you, my arrival will coincide with preparation of your upcoming budget, so your 2009 PCF will be foremost in your mind. For new Trustees, it's important to remember how the PCF is influenced by each member's loss experience. There are seven factors or exposures used in the PCF calculation, with the four-year average annual losses weighted three times. Losses, whether they go up or down, will have the greatest impact on your city's contribution to MVRMA.

The claims audit, which is a means for determining member compliance with the Claim Reporting Policy (Page 5:01:01 of the MVRMA Handbook), will generally take about 30 minutes. To be better prepared for these meetings, the city representative should have available all incident reports and claim files for the last year.

At these meetings, I will be happy to provide the status of any ongoing claim or litigation and provide any information discovered subsequent to the initial report.

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Loss Control Lowdown

Arc Flash Hazards

-Starr Markworth

Every year, more than 2,000 workers are treated in burn centers with severe arc flash injuries. The flash is immediate, but the results can cause severe injuries that last months, years--even a lifetime. In some cases, they may cause death.

What is an arc flash hazard? Think of an arc flash as a short circuit through the air. In an arc flash incident, an enormous amount of concentrated radiant energy explodes outward from electrical equipment. The explosion creates pressure waves that can damage a person's hearing, a high-intensity flash that can damage eyesight and a superheated ball of gas that can severely burn a worker's body and melt metal.

Where do arc flash hazards occur? A hazardous arc flash can occur in any electrical device, regardless of voltage, in which the energy is high enough to sustain an arc. Potential places where this can happen include: panel boards and switchboards, motor control centers, metal clad switch gear, transformers, motor starters and drive cabinets, fused disconnects and any place that can have equipment failure.

Who is at risk? Some of the employees at risk include mechanics, electricians and HVAC personnel. The most dangerous tasks include removing or installing circuit breakers or fuses, working on control circuits with energized parts exposed, racking circuit breakers in and out of switch gear, applying safety grounds, removing panel covers and low voltage testing and diagnostics.

In August 2007, the NFPA 70E guidelines went into effect and have subsequently been adopted by OSHA as the electrical standard. On August 15, 2008, the grace period will expire, and all organizations must be in compliance.

What are the NFPA 70E Guidelines? An employer is required to conduct an arc flash hazard analysis of the workplace, implement qualified and general worker safety training based on the arc flash hazard analysis results, establish shock and flash protection boundaries, provide protective clothing and personal protective equipment that meet ANSI standards and put warning labels on equipment.

MVRMA has recently purchased a DVD on Arc Flash Awareness, and a Hot Topic training session will be held in the near future. Watch for our announcement.

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Brokers Beat

Installation of Photovoltaic Panel Systems (PVPs)

As you might be aware, solar panel system vendors, such as Chevron/Viron Energy Solutions, are approaching municipal entities about renewable energy partnerships. These vendors are typically looking for empty rooftop space to install photovoltaic panel systems (PVPs) for on-site energy generation. Other than the obvious return-on-investment questions, the following are risk management concerns that should be considered when evaluating the installation of PVPs.

1. Retain a qualified licensed electrical engineer to represent the public entity's interests for constructability, maintain-ability, safety and access control. Ensure that PVPs, system components and conductors are installed and tested per NEC (NFPA 70) and state-specific building code standards.

2. Ensure any on-site battery storage systems are properly enclosed and secured to prevent unauthorized access. "Danger-Battery Area - Safety Goggles Required" warning signs should be installed at entrances. For battery room ventilation, follow NFPA 76 and American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) 62 consensus standards.

3. Design, installation and maintenance of PVPs should generally be according to The California Energy Commission's A Guide to Photovoltaic (PV) System Design and Installation http://www.energy.ca.gov/reports/2001-09-04 _500-01-020.PDF, considered to be the best practice standard for PVP systems.

4. Retain a licensed structural engineer to evaluate the roof and structural support system to ensure it can handle the increased load of the proposed PVP systems.

5. Ensure any rooftop or exterior structure penetrations are properly sealed to prevent water intrusion.

6. Install proper fall arrest roof anchors that meet American National Standards (ANSI) requirements during the PVP installation project. This ensures that future maintenance and cleaning of the PVPs can be safety conducted. Permanently installed roof anchors allow safe hook up of lanyards and fall arrest systems that are available to contractors or district employees accessing the roof. One source is http://www.millerfallprotection.com/fall-protection-products/roofing-products/permanent-roof-anchors.

7. Ensure that AC and DC inverters have permanent ANSI-type warning signs installed.

8. Ensure that rooftop support uprights and building components that can be scaled by children or others are guarded to prevent unauthorized rooftop access. Roof hatch access must be restricted to trained contractors or staff. One reference for guidance to restrict school building rooftop access is located at http://www.sd33.bc.ca/docs/hsm/4300.pdf. While this is not a municipal publication, it still has applicability to restricting rooftop access.

9. Discuss with MVRMA staff the appropriate risk transfer mechanisms for any contractors involved with potential PVP installation and/or operations and maintenance projects. Ensure that contractors have appropriate general liability "completed operations" language in the additional insured coverage.

The installation of PVPs has more exposure than initially meets the eye. We hope our suggestions will help you properly manage the increased risk associated with these panels.

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2007 Safety Award Winners Announced

The Safety Awards Program recognizes MVRMA members and individual departments with low losses.

The Overall Winner is the city with the lowest losses per full time employee. For 2007, the Overall Winner is the City of Bellbrook with 38 full-time employees and zero losses. The Runner-up is the City of Madeira with 24 full-time employees and zero losses.

Departmental winners are also determined by the lowest losses per full time employee. This year, there were multiple zero loss departments in each category, so the department with the most full time employees was named the winner. However, all zero loss departments will receive individual certificates for their employees and the option of a celebration or $250 to be used for training. The Departmental Winners for 2007 are:

Police - Piqua

Fire - Troy

Water & Wastewater - Vandalia

Parks & Recreation - Troy

Streets & Refuse - Montgomery

Plaques will be presented to all department winners later this summer.

The following departments are being recognized for experiencing three or more consecutive zero loss years:

Police - Bellbrook, Indian Hill & Madeira (3 years)

Fire - Bellbrook (3 years)

Water & Wastewater - Vandalia (14 years), Wyoming (4 years), Bellbrook & Indian Hill (3 years)

Parks & Recreation - Madeira (13 years), Montgomery (7 years), Wilmington & Wyoming (5 years), Indian Hill (4 years), Bellbrook, Springdale & Tipp City (3 years)

Standard of Excellence Winners, those cities with 50% less than the expected average dollar losses per employee ($100 or less), were presented plaques at our June 16 Board Meeting. The recipients of those plaques were the cities of Bellbrook, Blue Ash, Indian Hill, Kettering, Madeira, Miamisburg, Montgomery, Piqua, Springdale and West Carrollton.

Congratulations to all of the 2007 winners!

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From the Board Room...