Insurance policies are compensation contracts. The insurer undertakes responsibility for certain damages that may be caused to the insured. Liability policies insure claims for personal or property damage due to the insured`s negligence. Organizations can generate revenue (and develop goodwill with the public) by allowing the use of their property for special events such as weddings, conferences and leisure or sports events. Sometimes supporters of an organization are willing to make their properties available for a special event such as a fundraiser or other celebration sponsored by the organization. Parties to a reservation or other agreement regarding a particular event, be it landowners or organizers, are well advised to carefully define responsibilities and review risk management rules with insurance agencies. example. Eagle View Inc., a non-profit organization, is attempting to lease a section of Eagle View Mountain for bird-watching activities. The owner of the land welcomes the proceeds of the lease, but insists on a compensation scheme. Eagle View has a liability policy with a cap of $500,000. It is prepared to commit to obtaining exemptions from its members and maintaining its existing insurance coverage, but cannot afford to pay higher premiums for higher coverage. Eagle View`s policy is not to jeopardize its charitable foundation through contractual obligations.
The landowner and Eagle View agreed to limit the compensation plan to the revenue available for defence and payment of the claim under Eagle View`s liability insurance. The compensated party may attempt to include losses resulting from non-compliance with applicable law in the determination of compensation. Losses resulting from non-compliance are not covered by liability insurance. However, this compensation provision may be appropriate depending on which party controls the premises, the obligation to maintain the premises and the responsibility for non-compliance with applicable laws. VFC Partners has made it clear that language must be carefully checked with respect to key environmental liability risks and that it must be used specifically for the explicit allocation of these costs. At the beginning of a transaction, the parties should conduct a thorough analysis of available and appropriate environmental coverage.