Venue Contract Liability Extension
For many years now, Aon has been counselling our clients to be extremely vigilant about the terms and conditions of venue contracts. This is because many of these contracts seek to alter the common law position by compelling their hirers to bear responsibility, particularly for injury or damage, that goes beyond the scope of the insurance protection the hirer has historically been able to source.
To explain, standard Public & Products Liability Insurance policies are essentially triggered by claims for which the policyholder is negligent (i.e.: where the policyholder is at fault or is to blame), as you would expect would be the case.
However, many venue contracts impose upon their hirers a much greater responsibility than this for claims where someone else may be at fault, for example visitors, delegates, contractors and, in some cases, even the venue itself, during the period of the venue hire. This creates what is called a “contractual liability”, that is a liability that does not exist naturally under common law, but has been created purely by virtue of the contract itself. Such a liability has, until now, been largely uninsurable.
The answer in the past has been to try and negotiate these clauses out of the contract. However, Aon has come to realise that many venues are no longer prepared to delete or modify them. Therefore, in order to protect the interests of our clients, we are providing an automatic extension to our Conference/Exhibition Insurance policy. This extension is designed to offer the protection our clients need in the scenario we have illustrated above.
The value of this extension should not be under-estimated. Purchasing a standard insurance policy via an alternative provider and then getting caught out by one of these contracts could cost you millions of dollars.
In closing, however, it is important to stress two things. Firstly, as a matter of principle at least, you should continue to challenge any clauses that you perceive to be unfair in the venue contracts. Secondly, whilst this extension has been introduced to address the most common problem of venue contracts, it does not apply to contracts you may sign with outside service providers and equipment hire companies etc. Aon continues to stand ready to assist you with the review of these contracts.
For more information please contact Philip Sunshine at Aon Risk Services Limited on
02 9253 7000 or email philip.sunshine@aon.com.au.