Insurance Considerations for Youth Camps
July 19, 2011
Joe Risser CPCU, ARM-P
Risk Management Design
San Luis Obispo
Insurance should always be the solution of last resort for managing risk. It is far more important to prevent, control, and reduce potential losses to protect the campers, staff, camp and operators/owners.
A camp program should be based upon industry principles and practices, compliant with applicable regulations and laws and meeting or exceeding standards of reasonable and appropriate professional care. Development of a comprehensive and cost beneficial insurance program should be based upon thorough description of the camp program (campers, staffing, activities, facilities, location, policies and procedures, etc.) to the insurance agent/broker.
Insurance for a camp operated by college or university department or program may be provided all or in part by the institution. It is critical that the activities and exposures of the camp are reviewed in detail with the campus Risk Manager not only to ensure that the camp is conducted according to campus policies and procedures, but also to identify gaps and obtain insurance which the campus may not have in place.
Many colleges and universities (departments, programs, student organizations, etc) choose to lease or license the use of facilities and services to camps operated by other agencies — be they commercial or nonprofit (Cheerleaders, Boy Scouts, Science, Athletic, or Church camps). These may be campus ‘hosted’ camps or simply rental agreements. Arrangements for these relationships should be through written contract. The contract should include both an indemnification in favor of the college or university as approved by the Contracts/Procurement or Legal Office, and insurance requirements approved by the Risk Manager.
For either your own (institutional) insurance or the insurance you require of others using your facilities, you must understand the limits of coverage per accident/claim/occurrence and in the aggregate (total claims in a year) for the policies as well as the conditions, exclusions, sub-limits and valuation of property. Critical for liability insurance is that costs of defense must be in addition to the limits of coverage and that the insured has a controlling role in managing defense and/or settlement of claims.
Liability Insurance — Your Program
- General — Insurer defends and pays on your behalf to others, such costs of repair/replacement of property and costs of medical care for injury, disability, death and associated damages for which you are legally responsible.
- Sexual Abuse — Insurer defends and pays on your behalf to others, damages to others for which you are legally responsible related to hiring, training or supervisory practices resulting in sexual misconduct.
- Child Abduction — Insurer pays for expenses incurred attempting recovery, support and medical and/or psychiatric care for child and family.
- Automobile – Insurer defends and pays on your behalf to others, such costs of repair/replacement of property and costs of medical care for injury, disability, death and associated damages related to ownership and operation of vehicles.
- Workers’ Compensation & Employer’s Liability — Insurer provides payments as required by statute for employees’ work related injuries that may include medical services, hospitalization, lifetime support, rehabilitation, etc. This coverage is usually required by law for any employer and may be a wise choice for Volunteers as well.
- Directors’ and Officers’* – Insurer defends and pays on behalf of directors and officers of the Camp for damages related to business and management decisions which are not covered by General Liability Insurance.
- Employment Practices – Insurer defends and pays on your behalf damages related to charges of sexual harassment in the workplace, wrongful termination, employment discrimination for which your are legally responsible.
- Professional – Insurer defends and pays on your behalf damages resulting from lack of appropriate professional care, such as medical malpractice (camp doctor or nurses) or other professional level services (psychological counseling, education) that is not covered by General Liability Insurance.
- Umbrella — Insurer pays catastrophic damages for which you are responsible that exceed the limits of primary liability policies (general and automobile) and may offer additional coverage.
Accident Medical Coverage — Campers and Visitors to Camp
Insurer pays for direct medical services related to accidental injury (and some illnesses) related to the Camp experience. Policy may have $0 deductible and a limit of $10,000 – $30,000. This coverage may also be structured as secondary and/or catastrophic coverage that pays for medical services beyond the medical coverage of a camper’s parents, for example $35,000 – $1,000,000. (This is a no fault coverage and can sometimes go a long way in preventing parents from suing for medical costs of a camp injury.)
Property Insurance — Your Property & Interruption of Camp Operations
- Property* – Insurer pay for the repair or replacement of real property (buildings) that is destroyed by named causes (or by any cause except……… e.g. earthquakes). May also pay for temporary facilities while the repairs/replacement is taking place.
- Boiler and Machinery* – Insurer pays for repair/replacement of boilers and other critical machinery (generators) and can include immediate replacement until repair/replacement is completed as well as damages to other facilities and equipment.
- Inland Marine — Insurer pays for repair/replacement of specific equipment and some types of property (canoes, sound equipment, golf carts) at fixed value.
- Crime — Insurer pays for losses from dishonest acts of employees handling cash, supplies, equipment, and merchandise. Can also cover theft or burglary of money.
- Business Income Interruption — Insurer pays for losses related to sudden and unexpected closure of camp — loss of a primary building, forest fire, hurricane, tornado, etc.
- Key Employee Replacement- Insurer pays for the temporary hire and recruitment of key staff member in order that the camp program can continue with the minimum of interruption following death or incapacity of key employee.
*If you are the “Owner/Operator” of the camp these may be especially important areas to include in a comprehensive insurance program.
How much Insurance?
(This question needs to be answered by your institutional Risk Manager.)
How much can you afford to pay out of your operating budget for injuries or damages for which you may be responsible for during a year? For how many claims in a year can you pay that amount — so the total for the year could be $xx? This may be a ballpark idea as to what deductible you want for your insurance policies.
In considering the limits of insurance that should be obtained, you should first consider: what is the value of all of your property, equipment, materials, and supplies for your camp program? Add that number to the amount of your total operating budget for a year (including salaries and camper fees, grants, contracts, etc.) plus the value of all endowments or other non-operating funds. That is the amount of money you are protecting, as well as the program it provides.
The second consideration includes: what are the possible costs of a significant legal claim filed against your camp and or you personally? (Legal fees for defense lawyers, Investigator’s fees, Court fees, Mediation fees, etc.) What if there were two or three claims in a year? Where would you get the money to pay these expenses? If the court should rule that you are responsible and award damages to the claimant including their legal fees, how much might that be ?
It may seem counter intuitive to work hard to prevent accidents, injuries and damage if you have insurance to “pay for the losses”. However, no amount of money can restore someone to pre-accident condition, the impact on the campus community of a serious injury or death and/or loss of significant facility can be devastating and long term. Most important:
There is no insurance for loss of reputation!
“Camp Insurance 101” – Ian Gardner, American Camp Association
“Answers to 10 Important Insurance Questions” – Nancy Sheffler, Frost’s Summer Camp Guide
“Camp Insurance Information Form” K&K Insurance — available as example