09/14/2022
Facilities Use Risk Transfer
Public entities often lease, rent, or make available their facilities and parks. Examples could include renting out gymnasiums or ball fields for sports recreation leagues, leasing meeting room space to youth organizations, special events, fundraisers, or long-term leases of offices and classrooms for special education programs in schools.
When doing so it is essential to ensure that proper and consistent risk transfer procedures are in place to help protect your entity from damages and to transfer the risk back to the user of the facility or park. The user is most likely to cause and prevent damages and therefore should be held responsible should an incident occur.
This guide is intended to help outline the steps needed to prevent or limit exposure to your entity regarding public use of facilities.
Steps to a successful risk transfer program
- Develop a standard lease agreement
- Work with your counsel to develop a standard lease agreement that includes the Certificate of Insurance and Hold Harmless provisions outlined above. This agreement should be reviewed by counsel at least annually to ensure it meets any recent changes in the law.
- Facilities Use Coordinator
- Determine which department or employee/s will be responsible for coordinating the short-term leasing process. It is recommended that this process be centralized so that insurance requirements, waivers, etc., are collected consistently. Counsel should review all new long-term contracts.
- Create a standard facility use request form
- Using a standard form for all facility use requests, it helps the coordinator to create a consistent process that all potential users must follow. This helps to ensure that there are no surprises or unplanned events. The form should include the name of the individual or organization responsible for supervising the event, how many people will be using the space, what the space will be used for, etc. You can also outline the insurance requirements on the form so that the user is aware ahead of time.
- Evaluate existing procedures
- Make a list of each facility, ball field, park space, etc. where you currently lease, rent or make available that space for public use. Include one-time use situations and long-term leases. If you are a larger entity with many spaces available for use, then consider creating a list by department.
- Make changes as needed
- By creating a list of all current users you can then determine where you gaps in protection may exist and remedy them moving forward. For those users who do not meet your requirements, consider asking them to up their limits or add you as an additional insured as needed.
- Exceptions
- In the event that your entity decides that the user of the space does not pose any significant risk or the user cannot provide insurance, you should proceed carefully. Only the City/Town Manager or Superintendent should have the authority to allow users of your space without insurance protections in place.
- Communicate your policy
- Make sure all departments understand the facility’s use process. Ask them to refer any questions or requests for use to the Facilities Use Coordinator.
- Maintain a master list
- Be sure to maintain a list of all agreements, request forms, and copies of insurance in a file so that it can be accessed in the event of a lawsuit. Keep the records for your statute of limitations period plus one year.
