OMAG frequently receives inquiries from its member cities and towns concerning liability for special events. Questions arise as to what the city/town is liable for if someone is injured while on the premises of municipal facilities, such as parks, auditoriums, or fairgrounds. Is a member’s liability any different when the municipal facilities are leased to third parties for special events such as firework displays, arts and crafts festivals, rodeos or carnivals? The purpose of this bulletin is to assist members in identifying the various areas of liability created under these circumstances and to provide suggested ways to avoid or shift the risk to others when possible.
Hold Harmless Agreements and Certificates of Insurance
Many municipalities require every group that exclusively uses a public facility, to provide a Certificate of Insurance and Hold Harmless Agreement as a method of protecting it from future claims or lawsuits. In the event the group has an insurance policy, the city or town should require that it be named as an “Additional Insured” under the Certificate of Insurance.
The purpose of this requirement is to make certain that the group has the financial means available to compensate an injured person. If the injured person can recover for his injuries from the group, he is likely to look to the municipality for compensation. If the group has no means of compensating him, then the injured person will look to the municipality for payment.
A Hold Harmless Agreement executed by a group, while helpful, may prove to be of little value if the group has no financial resources to pay for defense costs or a judgment. For this reason, it is important that the group also provide a Certificate of Insurance demonstrating its ability to defend and pay for any injuries. OMAG can provide sample language of a Hold Harmless Agreement on request. (See publication - Hold Harmless Agreements and Certificates of Insurance).
Lease of Municipal Facilities
The municipality may be asked to lease its facilities to a private group so that it can hold its own activities such as a rodeo, stock car race, or a baseball tournament. What duty of care is owed to the participants of these special events? Does it matter whether the private group is for-profit, not-for-profit, incorporated or non-incorporated?
Absent a defective condition in the leased premises existing at the time of the lease and knowledge of that defect by the municipality, the municipality acting as a lessor of he premises is not liable for injuries to third parties.
A municipality can limit its liability exposure by leasing its municipal facilities to private groups when the municipality gives up its control over the premises. The only liability exposure would come from the municipality’s knowledge of a dangerous condition which it failed to make known to the lessee.
The legal status of the private group that leases the facilities form the municipality, whether it be a not-for-profit group, a corporation or association, is irrelevant when it comes to the issue of liability. Liability will attach to a municipality if its negligence can be shown to have directly caused injuries to another. It is important what a municipality adequately insulate itself from liability by using the methods discussed herein.
City and Town Sponsored Special Events
If a person is injured at a special event which the city of town sponsored, they will be looking for someone to pay. Will the city or town be liable or the local service club which promoted the special event? There is no clear answer. The facts of each situation are going to determine who is liable. Whether the city or town is liable will depend upon various factors such as: did it exercise control over the event; did it support the event with public funds or in-kind services by volunteering its employees; did it own, maintain or operate any of the equipment or amusement devices.
Due to inability of service clubs or organizations to get liability insurance coverage today, many municipalities are being asked to take over the special events so that their coverage will be available to pay for any injuries which may occur. In particular, some municipalities have been asked to take over the set-up and discharge of fireworks or the operation of carnival rides. Most municipalities probably have no experience whatsoever in assuming these duties, their associated risks and safety requirements. The fact that a municipality agrees to sponsor a special event is no defense to a damage suit where it can be shown that the municipality was negligent in its involvement. We recommend that our municipalities not accept this added exposure to sponsor special events due to the extraordinary nature of risk involved.
There are several ways in which to protect your municipality from liability when groups or organizations want to use your public facilities. It is suggested that Hold Harmless Agreements and Certificates of Insurance be required of such organizations. Another manner is to lease the premises to the group for its intended purpose.
It is certainly not recommended that municipalities volunteer to sponsor or operate special events in an effort to lend its liability coverage to private organizations which previously held them. Often times, the municipal employees are inadequately trained or experienced to take on the additional responsibilities. If people are injured, the inadequate training of employees may create the violation of a duty of care owed to the injured parties.
The information in this bulletin in intended solely for general informational purposes and should not be construed as or used as a substitute for legal advice or legal opinions with respect to specific situations, since such advice requires an evaluation of precise factual circumstances by an attorney. OMAG does not represent or endorse any group, site or product that may be mentioned in this article.