MASTER VENUE PROGRAM

NEW AND IMPROVED FOR '96

As SMG begins 1996, we open another fiscal period with higher profit goals for our enterprise. In supporting this growth in profitability, SMG is announcing a New and Improved version of the Master Venue - PROFIT CENTER - Program.

New in 1996 will be a negotiable pricing option for large attendance events, excess limits up to $10 million, cancellation coverage and participants' liability option for competitions.

The Master Venue Program represents another customer service benefit of booking with SMG, by providing a readily available vehicle for assisting our clients in obtaining basic financial protection for their events.

For this program to be presented and reviewed in the appropriate marketing context and time period, we are requesting that the enclosed pre-printed flyers be automatically included in the facility marketing package sent to the client following the initial contact and discussions of availability and facility services.

By including the flyer at this point in negotiations, the basic legal requirement of insurance is raised early enough for the cost to be considered by the client. This would also prevent the insurance requirements of the lease agreement from becoming a confrontational issue at or closer to the event date.

When the first costing proposal detailing the SMG facility services is submitted to the client, we are requesting that the MVP pricing for the event be included for client consideration and budgeting. At this point, Event Managers and Event Coordinators could contact either the SMG Risk Management Department or Near North Insurance brokers as the servicing party for pricing of any options required beyond the basic one million at 24 cents ($.24) per admission.

When presenting the New and Improved version of the SMG Master Venue Program, certain of the following points may be helpful in addressing some of the client concerns in purchasing the program:

• This is an actual insurance policy purchased from TIG (formerly TransAmerica Insurance Company), a top rated carrier in the United States.
   

• While the limit of the policy is $1 million per loss, this amount would be available for every claim should more than one incident or claimant be involved. In insurance jargon, this is a policy with NO aggregate limit.
   

• Higher limits up to $10 million per event are now available, on request, for increased hazard events based on a published rate schedule.
   

• The policy terms and conditions fully comply with the insurance requirements in the lease agreement, including additional insured, state licensing and financial rating requisites, and would support a portion of the financial obligations assumed by the Client/Lessee under the indemnification article.
   

• All claims are handled by the insurance carrier locally on behalf of the Client/Lessee, the Municipal Partner, and SMG.
   

• Owing to the long lead time in negotiating the majority of events, we would suggest the MVP option be offered and reviewed with the Client/Lessee during the initial contacts and then offered again within a year of the event date, as the rating structure is secured for the annual policy period.
   

• The policy does not have a deductible amount; therefore, the costs related to claims against the event for injuries to attendees or contractors would be paid by the insurance policy, without any monetary contribution by the Lessee, including hiring a defense attorney and adjuster, should the claim be serious enough.

As most traditional insurance policies are written with a deductible that is often related to the size of the organization, the MVP option would in most cases be less than a single deductible and considerable less should multiple claims arise.

In the case of the larger corporate Lessees of your facilities, a Self-Insured Retention (deductible) is often employed by the Client, as a cost-saving technique. These SIR's often range between $100,000 to $1 million per claim for General/Public Liability Insurance, while smaller organizations could have minimum deductibles of $1,000 to $5,000 per claim, which normally are not reflected on the Certificate of Insurance.

As a result of the risk financing decisions made by the Client/Lessee in selecting their deductible levels, the financial protection afforded the Lessee by the MVP purchase would reduce some of the financial uncertainty related to uninsured claims costs due to these functioning deductibles.

In those organizations with high deductibles and a profit-center cost allocation system, the costs of claims below the deductible are often charges back to the operating unit that incurred the expenses. In this case, the Client/Lessee at the SMG facility could be responsible for unanticipated event costs. While it is possible for the Client/Lessee to budget for the known additional MVP premiums, (as part of the overall event expenses), it is not possible to budget possible claims expenses due to the event. This could be a singular attractive point to a meeting organizer who is looking to preserve the integrity of the event planning budget from unexpected claims expenses, which could take years of litigation to resolve. The MVP provides a "buy it and forget it option" for our Client/Lessees and owners.

The MVP provides SMG and our facilities with considerable operational advantages:

• Another profit center opportunity to support SMG profit objectives.

• Customer service benefit.

• Client/Facility event insurance integrity guaranteed by virtue of a program designed by SMG for the unique exposures of facility management.

• Provides SMG with additional purchasing power in negotiating venue insurance programs.

Because this program serves the dual goals of profitability and SMG professional management image, SMG remains committed to offering, supporting and improving the Master Venue Program for our Clients as another added value of an SMG managed venue.

< back to top