Do your commercial clients feel "sponsor chill"?

A court weighs in on whether your corporate clients have an obligation to ensure that an association event they are sponsoring carries "adequate" insurance coverage.

Corporate sponsors of association events are not responsible for ensuring that the associations have purchased enough insurance limits to cover personal injuries that happen during the events, an Ontario court has ruled.

This may be one less risk brokers will have to worry about when advising corporate clients about the risks associated with event planning. A recent Marsh Canada report outlines a variety of other factors for brokers to consider.
The Ontario Court of Appeal recently upheld a motion court decision that had dismissed a lawsuit against Rogers Communications Inc., Umbro Inc. and the Bank of Montreal (BMO). 
The decision essentially confirmed that Rogers, Umbro and BMO, as corporate sponsors of the Ontario Soccer Association (OSA), did not have a legal duty to ensure that the OSA had acquired an “adequate” amount of accident insurance for a soccer player seriously injured during an OSA indoor soccer match.
“From a practical perspective, imposing this type of duty upon corporate sponsors would be unduly onerous and impractical, as corporate sponsors typically do not have sufficient information or ability to conduct the type of risk assessment for determining what amount of insurance for what types of risks would be appropriate in connection with any of a wide range of events and activities which they may be sponsoring,” said Peter Pliszka and Andrew Baerg of Fasken Martineau.   


“The imposition of such a duty and its consequent potential for legal exposure to the corporation would foreseeably lead to ‘sponsor chill,’ as many corporations might become reluctant to provide sponsorship funding to various charitable and recreational organizations and events, to the detriment of society as a whole.”  
The plaintiff in the case suffered a spinal cord injury during an OSA indoor soccer match. OSA had obtained a policy of accident insurance for its members and the amount payable under that policy was $40,000. 
The plaintiff sued OSA, alleging that the insurance coverage was “inadequate.” He also sued the corporate sponsors, saying they owed a duty of care to make inquiries of the OSA to ensure “adequate” insurance coverage was in place.
Coincidentally, following the court’s decision, Marsh Canada issued a special report on events management. The Marsh report is not connected to the case in any way, but it does touch on risks associated with any major event planning. 
“Not-for-profit organizations rely heavily on special events for fundraising,” the report says. “As such, it is important to note that the event organizers are responsible for the safety of event attendees — and that short-term liability coverage exists to protect organizers — even when the event is a small one.”
According to Marsh, event planners will want some kind of customized insurance approach for their particular event. Special attention should be paid if:
children or minors attend.
hazardous activities are involved.
gambling takes place.
large crowds are anticipated.
alcohol will be served.

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