Golf Association of Philadelphia and Bollinger Club Insurance Programs

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Golf Association of Philadelphia and Bollinger
Club Insurance Programs

• Presidents Council Meeting
• March 15, 2005
• Presented by Tom Walker

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Does your Club have the insurance coverage it
needs to protect it if a disaster strikes?
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Property Coverage

• Buildings Personal Property
• Business Interruption Extra Expense
• Equipment Breakdown/ Boiler Machinery
• Demolition Costs
• Ordinance or Law (increased cost of construction)
• Debris Removal Expense
• Land Improvements
• Personal Property of Members Guests
• Golf Course Playing Surfaces
• Tree Debris Removal Expense
• Maintenance Equipment, Golf Carts, Computers

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Liability Coverage

• General Liability for the Clubs premises
  operations
• Liquor Law Liability
• Business Auto Liability
• Employee Benefits Liability
• Pollution Liability
• Directors Officers Liability
• Umbrella Liability

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Property Coverage
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When insuring Club property (buildings and
contents), it is critical to determine the proper
insurable value.
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Insurance to Value

• Allows for an agreed amount of insurance coverage
• Avoids co-insurance penalties at the time of loss
• Can assist in expediting the claim settlement
  process

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How are insurable values determined?

• Cost estimators such as Marshall Swift
• Agent/Broker recommendation
• Caution These methods are generally not
  sufficient to address the values of most clubs.
  In addition, they should not be relied on for
  older (and/or larger) clubhouses.

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What method is recommended?

• Utilization of a qualified appraisal service
  (such as Industrial Appraisal Company, Pittsburgh
  PA) to determine the replacement cost of
  buildings and contents.
• Annual updates with increases for inflation.
• A full appraisal performed at a minimum of every
  7 years.
• NOTE The appraisal cost is based on square
  footage of buildings and can include contents and
  maintenance equipment.

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Sample Appraisal
Sample Club/NJ Total Exclusions Inclusions
BLDG1-Clubhouse
Building 4,250,510 (264,850) 3,985,660
Architect Fees 297,536 297,536
Telephone System 22,500 22,500
Permanent Fixtures 349,684 349,684
Total Building 4,920,230 (264,850) 4,655,380

Equipment (contents) 663,332 663,332
Office Furniture 37,322 37,322
Office Machinery 22,274 22,274
EDP Equipment 44,214 44,214
Fine Arts/Trophies 11,400 11,400
Total Equipment 778,532 778,532
BLDG 1 Total 5,698,762 (264,850) 5,433,912
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Sample Appraisal (Contd.)
Sample Club/NJ Total Exclusions Inclusions
BLDG 1 Total 5,698,762 (264,850) 5,433,912

BDLG2-Maintenance
Building 900,000 (54,000) 846,000
Architect Fees 61,000
Equipment (contents) 162,000
BLDG 2 Total 1,123,000 (54,000) 1,069.000
Sample Blanket Building Contents Limit 6,502,912
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Statement of Values

• Based on the appraised replacement cost value, a
  statement of values should be completed annually
  by the Club and Agent
• Sign-off by Club GM or officer
• Updated during the policy period if values change

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Business Income
The Net Income that would have been earned had
there been no covered loss PLUS continuing
normal operating expenses, including
payroll. resulting from damage to
buildings/contentsand/or the golf course. A
Business Income worksheet should becompleted
annually.
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Business Income

• Income lost from
• Food beverage
• Initiation fees
• Greens fees
• Golf cart rental
• Membership dues?

• Continuing operating expenses
• Golf course
• Golf shop
• Administrative general
• Real estate taxes
• Payroll taxes
• Benefits

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Extra Expense
Following a covered loss, the cost to minimize
the suspension of business and to enable
continuation of operations. resulting from
damage to buildings/contents and/or the golf
course.
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Extra Expense

• Temporary facilities such as trailers to house
  the kitchen, locker rooms, rest rooms and snack
  bars
• Tents for banquets, weddings and golf outings
• Generators to provide power

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Equipment BreakdownBoiler Machinery

• Coverage should include
• All HVAC equipment, deep well and other pumps,
  refrigeration equipment, motors and water
  heaters.
• Food spoilage and breakdown due to off-premises
  power interruption.
• Coverage limit should equal the blanket building
  contents limit.
• Coverage should be part of the property contract.

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Additional Property Coverages

• Demolition Costs the cost to demolish undamaged
  portions of the building(s).
• Increased Costs of Construction due to an
  ordinance or law
• An elevator is required to comply with ADA
• Updated fire codes require a new sprinkler system
• Debris Removal Expense
• Tree Debris Removal Expense

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Types of Real Property

• Land Improvements
• In addition to buildings, the insurance
  definition of Real Property includes
• Bridges, towers, pipes, dams, exterior light
  fixtures poles, in-ground sprinkler systems and
  equipment, tennis courts, satellite dishes and
  antennas, fences, bulkheads, pilings, piers,
  wharves, retaining walls, roadways, walks,
  patios, other paved surfaces, outdoor signs,
  lightning detection/warning systems and pools.

Land Improvements In addition to buildings, the
insurance definition of Real Property
includes Bridges, towers, pipes, dams, exterior
light fixtures poles, in-ground sprinkler
systems and equipment, tennis courts, satellite
dishes and antennas, fences, bulkheads, pilings,
piers, wharves, retaining walls, roadways, walks,
patios, other paved surfaces, outdoor signs,
lightning detection/warning systems and pools.
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Additional types of Property

• Personal property of members and guests in the
  clubs care, custody and control
• Golf course greens and grounds
• Tees, driving ranges, cut fairways, greens,
  bunkers, cut and maintained roughs and other cut
  and maintained playing surfaces
• Coverage at a minimum should include perils of
  lightning, aircraft, vehicles, vandalism,
  windstorm and hail.

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Maintenance Equipment and Golf Carts

• A schedule of equipment including manufacturer,
  model and replacement value should be kept on
  file and updated annually.
• Coverage provided should be on a replacement cost
  basis.
• Coverage should automatically include newly
  acquired equipment, which is bought, leased,
  rented or borrowed.

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Computers, Valuable Papers andAccounts Receivable

• Keep a schedule of computers on file and update
  it annually.
• Keep valuable records and data in afire-proof
  safe.
• Make frequent back-ups of data and store
  duplicates off premises.

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Liability Coverage
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General Liability

• Coverage you are legally obligated to paydue
  to bodily injury or property damage caused by an
  occurrence and arising out of the ownership,
  maintenance or use of your premises and
  operations.
• Minimum recommended limits 1,000,000 per
  occurrence and 3,000,000 aggregate

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General Liability

• Personal Advertising Liability1,000,000
  minimum limit
• Covers libel, slander, defamation of character
• Medical Expense 15,000 minimum limit
• Provides coverage for injuries to members and
  athletic participants
• Supplemental Accident coverage
• Incidental Medical Malpractice
• Provides coverage for use of AEDs

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General Liability

• Extend coverage to employees, club members,
  volunteer workers, golf and tennis professionals
• Extend coverage on an excess basis to
  non-employee golf cart operators
• Include coverage for errant golf balls

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Liquor Law Liability

• Minimum recommended limits 1,000,000 per
  occurrence and 1,000,000 aggregate
• Maintain a strong Club policy on service of
  alcoholic beverages
• Require mandatory TIPS Training for all servers
  and sellers of alcoholic beverages

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Business Auto Liability

• Minimum recommended limit 1,000,000
• Hired non-owned autos
• Garagekeepers Legal Liability for valet parking
• Request MVRs on all drivers of Club vehicles.

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Employee Benefits Liability

• Protects against legal liability in the
  administration of the Clubs employee benefits
  programs including group life, accident health,
  profit sharing, pension plans, workers
  compensation and disability insurance.
• Minimum recommended limit of 1,000,000

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Pollution Liability

• Covers the liability exposure resulting from
  application of pesticides herbicides to the
  golf course.
• Minimum recommended limits 2,000,000
• Include off-premises clean-up
• Above and below ground storage tanks pose
  additional exposures

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Directors Officers Liability

• Limits of 5,000,000 or higher
• Umbrella to cover excess of DO limits
• Defense costs in addition to the limit of
  liability
• Coverage should include membership
  discrimination.
• Full Prior Acts coverage

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Directors Officers Liability

• Named Insured to include
• Past, present future directors, officers and
  trustees
• Committee members
• Employees
• Volunteers

• DO Employment Practices Liability provides
  coverage for
• Wrongful termination
• Discrimination
• Sexual or workplace harassment
• Mental anguish
• Emotional distress
• Breach of contract

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Umbrella Liability

• Limits of at least 5,000,000
• Provides excess liability coverage over and
  above
• General Liability
• Employee Benefits Liability
• Auto Liability
• Liquor Liability
• Employers Liability
• Directors Officers Liability

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Industry Changes

• Board Governance
• Agent/Broker Duties
• Understanding Market Cycles