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Over the last few weeks, we’ve talked about the different considerations when renting out your common and/or party rooms.  What have we learned?

The first thing to consider is what type of event will be hosted in these rooms and whether alcohol will be served.  If you’ve determined that alcohol will be served, you should ensure that the event organisers obtain the requisite Special Occasion Permit (SOP) from the Alcohol and Gaming Commission of Ontario.

The next thing to consider is whether to rely on your housing corporation’s own insurance and whether to enter into a rental contract that clearly outlines each party’s rights and obligations regarding the rental of your common and/or party room.  While the existence of a contract will not likely absolve you of all liability, it will certainly aid in any defence your insurance company lays out for you.

Risky Business - Spring 2010 Edition

Another option is to require event organisers to purchase their own insurance coverage for their events, commonly known as Special Event Insurance or Social Host Liability Insurance.  For additional information on this type of insurance, visit Elliot Special Risks.

Lastly, it is important to remember that your housing corporation’s insurance policy does not provide coverage to any property or contents belonging to your tenants, guests, event organisers or event attendees.  Event organisers should be made aware of this and it should be spelled out in your rental contract or agreement.  Property belonging to your housing corporation will be covered as long as the property was lost or damaged due to a covered risk.

In our ever-increasingly litigious society, it is important to do everything possible to reduce our exposure to common hazards associated with the shared spaces in our residential buildings.  For more risk management tips, check out our newest edition of Risky Business.

When renting out your common and/or party rooms, one last thing to remember is that any property belonging to your tenants, the event attendees or organizers is not covered by your corporation’s insurance policy.  It is important to make this clear when you are renting these rooms and in any rental contract or agreement.  If; however, anything happens at or during the event that results in loss or damage to property belonging to your housing corporation, your policy will provide coverage as long as the cause of the loss or damage is an “Insured Peril” (aka: a covered risk).

We’ve talked about several different aspects of the risks and issues for you to think about regarding common and/or party room rentals recently and our final installment in our series will recap them all.  In the meantime, refer to parts 1, 2 and 3 for a refresher or for anything you may have missed.

Party Room/Common Room Rentals Series

• Part 1
• Part 2
• Part 3

Last time, we talked about the issues and risks of relying on your corporation’s own insurance coverage when renting out your common/party rooms.  This week we’ll tackle another consideration when renting out these rooms: requiring the event organizers to purchase their own insurance.

Special Event insurance, also known as Social Host Liability insurance, provides coverage for a specific event and its organizers, and often includes general liability and server liquor liability.  If something should happen at or during the event, the injured party can make a claim against the event’s insurance policy, and not your corporation’s policy.

It is important to note that special event liability insurance does not cover the personal property of the event’s organizers or its attendees, nor does your corporation’s insurance provide this coverage.  This is what we’ll talk about in part 4 of our series on common rooms.

For more information about special event insurance, visit Elliot Special Risks

In my last blog entry, I talked about the importance of ensuring that event organizers, who are using building common rooms, obtain the relevant Special Occasion Permit from the Alcohol and Gaming Commission of Ontario, if they are serving alcohol. Today, we’ll look at the liability issues that your corporation could face by allowing events that serve alcohol to take place on your property.

Some questions you need to consider: what happens if a minor consumes alcohol at the event and becomes ill? What if someone leaves the event after consuming alcohol hosted on your premises and gets into a car accident that results in injury or death? The injured party or parties could sue your corporation – even if your only connection to the event is the location.

Protecting yourself with a rental contract
So how do you protect yourself? Make sure you have a plainly written rental contract with unambiguous language that clearly sets out each party’s rights and obligations concerning the rental room. Your contract should include a clause that clearly indicates your corporation is not liable for injuries or damages incurred during the event. A carefully executed contract and a Special Occasion Permit will assist should you find it necessary to defend the corporation against a lawsuit.

Unfortunately, these documents likely won’t be enough to fully absolve you of liability. A better option is to require that the event organizers purchase their own insurance coverage. This is called Special Event insurance or Social Host Liability insurance and that’s what we’ll talk about next time.

Many of you have common rooms and/or party rooms for your tenants’ social events or community meetings. But did you know that there are insurance considerations associated with the use of these rooms? Here are a few things you should know.

There are two ways to insure these events. The first is to rely on your own insurance. The second is to require the event’s organizers to provide their own insurance coverage.

Should you choose the former, there are two important considerations from an insurance perspective: the availability of alcohol at these events and who is responsible for property belonging to the events’ organizers and attendees.

Today, I will talk about the first of those considerations, which is whether or not alcohol will be served at or during the event. If alcohol is being served, the organizers will be required to obtain a Special Occasion Permit (SOP). There are three classes of SOPs; a Sale SOP, a No Sale SOP and an Auctions SOP. Details of these permits and application forms may be found on the Alcohol and Gaming Commission of Ontario’s website.

To protect yourself from liability, you should ensure the event organizers have applied and obtained the relevant permit and should take a copy for your records.

Next time, I will talk about liability and insurance concerns surrounding alcohol-included events.

Although Ontario’s ban on hand-held devices while driving became effective on October 26, 2009, there was a three-month transition period during which the government and the police focused on educating motorists about the ban rather than imposing fines. This has now ended and police started to issue tickets on February 1, 2010.

What does this mean to you?

While the use of hand-held cell phones and communications devices is banned, hands-free devices are still permitted. What does this mean to you? If you allow your employees to use hand-held devices while driving, you could be held vicariously liable in the event of an accident. This means that a Court could rule that you must pay damages resulting from your employee’s distracted driving.

The best way to protect yourself as an employer is to create and implement a clear and concise policy regarding the use of hand-held electronic devices, and to enforce it consistently across your organization. For information on the Government of Ontario’s ban on hand-held devices, you may refer to their website: www.ontario.ca. For more risk management tips, watch for our Risky Business newsletter.

In November 2009, the Ontario Court of Appeals decided that landlords cannot require tenants to complete snow removal tasks as a condition of their leases.

The situation began when a tenant commenced a legal action against a respondent landlord for damages after she slipped and fell on the premises. The tenant claims that she slipped on ice on the walkway leading to her basement apartment. But in his defence, the landlord argues that the tenant is “responsible for keeping their walkway and stairway clean (including snow removal)” based on the Condition of Lease.

Well, Ontario Court of Appeals made a decision on the case, Montgomery v. Van. The Court found that landlords cannot require tenants to complete snow removal tasks as a condition of their leases as it violates the Tenant Protection Act. The Residential Tenancies Act Regulation 517/06 seems to impose similar maintenance obligations on landlords. If landlords want them to clear their own walkways, driveways, etc., they must enter into a separate contract with the tenants for snow removal.

Feel free to leave a question or comment below regarding this court decision.

It’s a good time to remind ourselves of some important winter maintenance tips now that the holidays are over.  Here are some basic tips you can use that will help you keep your property safe for your tenants and visitors:

1. Trim trees and remove dead branches to prevent injuries to residents and visitors and/or damage to surrounding properties from falling branches.
2. Check gutters regularly; clear them of debris so melting snow & ice can flow freely.
3. Maintain steps and handrails.  Repair broken stairs and railings as soon as you become aware of them.
4. Check pipes and wrap them with heating tape.  Check for cracks and leaks; repair minor pipe damage immediately to prevent more severe damage from occurring from neglect.
5. Inspect sidewalks, driveways and entryways regularly and keep them free from snow and ice.  Have a supply of salt and/or sand readily available and apply whenever conditions require it.  This is important even if you have hired a winter maintenance contractor to do this for you.  Maintain a written record of your inspections and applications of surface treatment material.

For more information, you can check out Safety and the Holiday Season.

The holiday season is here! To help you have a festive season and prevent accidents related to holiday decorating, here are some helpful tips for you and your tenants:

• Use only non-flammable decorations (i.e. CSA-approved lights and electrical decorations).
• Make sure to keep lights, ornaments, tinsel and other tasty-looking decorations off the floor and out of reach of children or pets.
• If you’re putting up a real tree to decorate your foyer or other common areas, make sure you keep it watered.
• Check your holiday lights – they should not be hot to the touch. Also check your electrical outlets and circuits. They should not have any broken ground plugs, frayed wiring, broken sockets, cuts, nicks or gaps in insulation.
• Don’t overload your electric outlets and circuits by using multiple plugs, circuit extenders/splitters or multiple extension cords.
• Candles should be placed on a fireproof base or in holders that cannot be easily knocked down or reached by children and pets.
• Keep a working fire extinguisher handy and familiarize yourself and your staff with its use.
• Make sure emergency exits are clearly marked.

Make sure to share these tips with your tenants and have a safe and happy holiday season.

With the 2009-2010 insurance renewal term finally completed, I thought I would talk about the things affecting insurance premiums: losses, economic environment, legislation and the size of an organization.

The first item to consider is loss history.  An organization with a high loss ratio (Ratio = Losses/Premium) is more likely to see a premium increase than one with a low loss ratio.  Generally, your premium will not increase if you incur one loss because you are purchasing insurance for that one catastrophic loss.  This is one reason having a sound risk management program is essential to any organization, not just non-profits.  A successful risk management program will result in a reduction of your overall insurance premiums.  However, insurance premiums are based on a number of other criteria, not just on one’s loss history.

This brings me to my second point, which is economic environment.  You may have heard of “soft” and “hard” markets.  Insurance companies make most of their money from their investments and public investments into their companies, so a soft market is dependent on the buoyancy of the stock market.  During a soft market, insurers are eager to write new business and so they compete to write new accounts, they offer relatively low premiums and they are inspired to identify new coverages and products to meet the needs of our sector.  By contrast, when the economic cycle is on a downturn, generally we move into a harder market.  A hard market brings higher premiums, more restrictive coverages and lower limits.  To generate revenue lost on their investments, insurers increase premiums to make up for the shortfall.  Some coverages may cease to be available or they are severely restricted, limits are reduced and exclusions are imposed.  It is not uncommon for some types of businesses to be unable to find reasonable insurance arrangements.

Legislation is another factor in considering insurance premiums.  Insurance is highly regulated in Canada, with each province and territory having its own insurance legislation.  Insurers are restricted to certain types of investments only and must adhere to strict government regulations when operating their businesses.  For example, insurers in Ontario are not allowed to invest in stock that is deemed to be too risky.  They must maintain cash reserves equal to the amount of business they write at any given time so that they are able to pay for any and all claims to which they may be exposed.  Legislation in Ontario is constantly changing as claims that are brought before the courts are decided and become precedents.  Auto insurers are legislated to provide a minimum amount of liability insurance for all vehicle owners in Ontario in addition to minimum accident benefits.  As precedents are set and reforms to existing legislation are made, insurance rates are affected both positively and negatively.

My final point is about the size of one’s organization.  Insurers consider the physical size of the organization’s structure, the number of employees, the scope of the organization’s business and the number of locations and the environment surrounding these locations. The larger the organization, the larger the spread of risk which helps reduce the rate of insurance and in turn reduces the insurance premium.  That is why group programs are effective when obtaining terms from insurance companies.  The volatility of the marketplace is one of several reasons why purchasing insurance as a group affords a certain level of protection during uncertain times.  A group such as SHSC allows us to consider alternatives to the normal insurance marketplace to meet the needs of our sector.

This is basic summary of a much more complex process. Hopefully, it will give you a basic understanding of how the insurance industry works.  Remember you can access valuable insurance and risk management information in our newsletter, Risky Business.  Check it out under Useful Forms & Newsletters in the Insurance section of our website.