IN 1996, ST. LOUIS-BASED MARITZ INC. organized an incentive program in Arizona during which two attendees died in a hot-air balloon crash.
“That was a very traumatic incident,” says John Risberg, senior vice president, managing counsel, and chief administrative officer at Maritz. “Obviously, an event like that crystallizes things, brings them into sharper relief. It causes you to take a critical look at and review your program.”
In particular, Risberg says, Maritz has placed renewed emphasis on examining the qualifications — the experience and safety record, for example — of its suppliers. “We were doing it prior [to the crash] and continue to do so,” Risberg says. “An incident like that … drives home the importance of attending to that aspect of our business.”
Nontraditional group events such as ballooning, white-water rafting, off-road driving, bobsledding, and even surfing are becoming more common as incentive planners look for activities that guarantee more memories than a day on a golf course or a ride on a bus. But with the desire for adventure come the accompanying risks, and planners need to keep those risks in mind when booking activities.
Every Reasonable Step
When hiring a supplier — whether it's a company providing white-water rafting trips or one that holds kayak tours — it's critical that the company “is of quality,” says Al Alonik, a travel lawyer from San Francisco who testified against Maritz in the court case that followed the hot-air balloon accident. A planner should inspect the supplier and document the reasons why the supplier was hired. If the supplier is hired because of price, Alonik says, “They [planners] could be asking for more risk than they should be taking on.”
After taking every “reasonably possible” step to qualify incentive suppliers and subsuppliers, says Risberg, it is also crucial to confirm their insurance status.
LeConte Moore, managing director of Marsh Inc., a risk and insurance services company, echoes those concerns. “My advice to a corporate planner is to make sure that the company [the supplier] is adequately insured,” Moore says. Ask to see the indemnity clause and an insurance certificate, he says, and if the company cannot provide it within 48 hours, “find someone who can provide it that quickly.”
“Many clients ask us to divulge our insurance policies,” says Claudia Wehring, regional director of sales, Southern California, for PRA, a destination marketing company with offices in California and other states. “Smart clients should ask for that information.”
How much insurance is enough? Moore says $1 million is a “fairly standard” limit, and that companies carrying amounts closer to $100,000 could set off alarm bells that the company in question “is not too sophisticated.
“It's rare that you [a supplier] can't get the insurance,” he adds. “The client might just not want to pay [what it takes to get it].”
Insurance not only protects organizers for the serious cases, says Rodney Gould, a Framingham, Mass. — based lawyer who represented Maritz during the balloon-crash case. “It's also so that you don't go bankrupt paying for the silly ones.
“Travelers can sue for anything,” he adds. “I've seen them sue because it rains in Cancun and because they speak Spanish in Santa Domingo.”
The Big Print
Waiver and release forms have become standard tools for companies providing risk-related activities. Alonik provides a form on his Web site that he refers to as a “heavy duty” notice. Large print items, the use of bold lettering, and phrases such as “I specifically assume,” and “I acknowledge” make for a stronger liability release, he says.
“The format is one that uses a combination of repetitive warnings, bold letter warnings, and an acknowledgement that ‘I know it's crazy, but I still want to do it,’” Alonik explains.
Wehring says her company usually requires attendees to sign two waivers — one for PRA and the other for the supplier being used. They are not signed ahead of time so that attendees explicitly understand the connection between the waiver and the activity they are about to participate in.
Occasionally someone will balk at signing the release. It could be a case, Wehring says, of a planner not wanting to bother a company CEO with the hassle of signing waivers on a daily basis. Or a planner may rationalize that he or she is organizing “a high-caliber incentive program, with an overall experience of them [attendees] being treated like the important people they are,” she says. “And signing waivers is not part of that experience.” But she gets the participants to sign nevertheless.
While some of these potentially risky activities are built into incentive programs, others are one-off events designed asexercises or afternoon perks.
Greg Armstrong, co-owner of All Outdoors California Whitewater Rafting in Walnut Creek, Calif., says his company tries to communicate to participants, particularly those engaged in a teambuilding exercise, not to push anybody too far.
“Everybody does get pushed,” Armstrong says, adding that that is the purpose behind a teambuilding event, “but there is a line that needs to be drawn.” In most cases, he says, the problems occur on the more challenging rivers — where a participant is most often out of his or her depth. It's at that point, Armstrong says, that his people can make adjustments, such as using larger rafts, to ensure that every participant is secure.
The Olympic Regional Development Authority in Lake Placid, N.Y., offers corporate clients such as IBM, Kodak, and Burger King the opportunity to engage in Olympic-style competitions such as bobsledding and luge. According to Jeff Potter, director of corporate development, these kinds of activities take people “out of their comfort zone and put them in a mind-set they can take back and use in the business world.”
Like Armstrong, Potter says the perceived risks are greater than the actual ones.
“You can hurl down an icy shoot on a bobsled at 60 mph,” Potter says. “It can be done safely, and the thrill is still there.”
Accidents Will Happen
Eventually, no matter how many precautions organizers take, accidents will happen. “One woman fell out of a bus and broke her wrist,” recalls Wehring. “Another one slipped at a wild animal park and broke her kneecap.”
“No one can assure safety,” says Risberg, although he adds that organizers must exercise reasonable efforts to provide a safe experience for attendees.
If planners are determined to plan events with even the smallest element of risk, says Moore, they need to make sure that the risks to the company are minimized. “Before you sign the deal and pay the money,” Moore says, “involve your risk management department and have them talk you through all the issues.”
While white-water rafting, bobsledding, and kayaking may seem like manageable bets for corporate events, some activities may be too extreme.
“We have a small group of activities that we just flat out say we don't recommend them, and we won't include them,” says John Risberg, senior vice president, managing counsel and chief administrative officer of Maritz Inc. Maritz will steer clear of activities such as bungee jumping and hang gliding, and other “very extreme types of activities,” he says.
Claudia Wehring, regional director of sales, Southern California, for PRA, had one client who was adamant about taking attendees hang gliding. “We declined,” she says. “We told them we wouldn't coordinate the activity. If it's too risky, we let the client deal with it.” In this case, Wehring says, the client ended up booking a hang-gliding event on its own.