Insurers and operators alike want to control claims costs as much as possible and help ensure aerial adventure operations are successful. As insurers, we do not want to just “settle” a claim, but in some lawsuits it is the most financially feasible approach. So, why are insurance companies forced to settle during some claims? Especially when the operator may not be at fault?
A legal suit or insurance claim is similar to a game of high-stakes poker. Whichever side (operator vs. participant) has more chips in their stack is the party with more leverage, and likely the party that will prevail at the end of the day. An operator’s stack of chips, if you will, consists of a thorough incident investigation report and other related assets.
The issue we see with many operators is they don’t come to the table with a stack of chips. Unfortunately, they sometimes come empty handed and tell the dealer, “Let’s win this thing!”
Keep in mind, these lawsuits often show up 2-6 years after the incident occurred. This is strategic. In waiting, plaintiffs’ attorneys hope you’ve lost all reports and documentation, and the employees that witnessed the incident are no longer with you. Without this information, you will likely lose the case.
But a good incident report and proper documentation allows you to recall and replay every specific detail many years down the road, providing a tall stack of chips in the event of a lawsuit.
Granite Insurance has seen more than 400 claims in the adventure and entertainment world, and with that comes a lot of lessons learned. To ensure your operation is defendable, avoid the following mistakes, and heed the best practices and recommendations for each.
Mistake: Documenting Lessons Learned and Mistakes Made
We’ve received many emails from insureds similar to the following: “We’ve learned our lesson with this incident. In the future, we will not be letting staff with DUIs drive our vans. We knew the driver had a DUI. However, we trusted them to make good decisions. Never in a million years did we expect them to be drinking while on the job, especially driving participants. Going forward, we will do the following, which we were not doing previously: 1) driver training program, 2) pull background checks, and 3) regular maintenance on our vehicles.” The intentions of the email are great, right? The operator wanted to prove to the insurance company that they had learned from their mistakes to avoid non-renewal or a substantial premium increase.
Here’s the mistake: All emails related to the incident can be discoverable (brought into the lawsuit) if a lawsuit is filed. Once this email is discovered, the other party just gained some substantial poker chips in their favor.
Best practice: Whatever you do, do not have “What could have prevented this accident?” or anything similar as a question on your incident report. The incident report should focus on facts only. No opinions or suggestions.
Recommendation: Discuss the lessons learned in person. Changing your procedures after an incident is perfectly fine to improve the safety of your operations. However, these should be seen as “general changes” not specifically tied to mistakes made during an incident.
Mistake: Handling the Response or Payment of an Incident Internally
When a participant is injured on site, sometimes operators feel the need to pay for small medical bills, ambulance rides, etc., out of their own pocket. Well intentioned, for sure—but no good deed goes unpunished.
By doing this, you are potentially admitting liability and not completing the proper legal steps to ensure this is the only payment the participant will request. In addition, conversations with participants about medical bills, who was at fault in the incident, etc., can become difficult and your team likely is not trained or equipped to handle those legal conversations.
These difficult conversations look better to the participant (and everyone involved) coming from the “mean ol’ insurance company” rather than from your local business where your reputation matters. Also, keep in mind that the insurance company has no obligation to reimburse you for any monies paid out of your pocket.
Best practice: Respond quickly and with the utmost care to an incident. Get treatment for the injured participant, be accommodating to family or friends who are with them, but leave anything legal, financial, and medical to the professionals. This is not time to play “doctor” or “attorney” as you might have in the boardgame “Life” with your kids.
Recommendation: Always file any claim with your insurance company and let them handle it—that’s what you pay them for. Your insurer has the resources to handle these incidents and make sure they are put through the proper legal channels to protect your organization.
Mistake: Not Documenting Small Incidents
“We don’t have an incident report for that injury.” That statement creates a pit in everyone’s stomach, because without an incident report it makes it very difficult to prove what actually happened, especially if a claim is filed multiple years after the incident occurred. Many times, this is because the operator never thought anything would come of it, or they were very busy that day and forgot to complete the incident report later on.
Best practice: Incident reports and witness statements must be completed the day of the incident. Create records on ALL injuries.
Recommendation: For smaller injuries (pinched hand, small cut, etc.) you may want to use a minor injury report. This could be a single-page document that has spaces to list name, date, and details of minor injury—less information than a full incident report.
Mistake: Not Offering EMS or Ambulance
Far too many lawsuits accuse the operator of not caring for the injured participant, and not even offering to call emergency medical services (EMS) when “they could barely breathe.” When an operator is not able to provide evidence that EMS was offered, it portrays the operator as careless and too focused on making money rather than taking care of the participant. Or, at least that’s how the plaintiff attorney will stage the argument.
Best practice: The duty of care owed to the people who visit your site includes following proper incident response procedures. Providing options for medical care should be part of that procedure.
Recommendation: Your incident report should ask, “Was EMS offered? Was it accepted or rejected?”
Mistake: Not Capturing Photos of Equipment or Surroundings
Imagine it’s five years after an incident that you haven’t even thought about it since it occurred, but you were just served with a lawsuit from it. There are allegations of equipment that was improperly installed on the date of the incident, moss that was growing on the landing platform, and boards missing from the landing platform, all of which allegedly made someone slip and break their ankle, causing long-term damage. The claim value is $2.5 million.
You know all of these statements are false, but you can’t prove it because you don’t have photos of the equipment involved during the accident or of the area surrounding the accident. This automatically becomes he said vs. she said. And she always wins. (She is not your company.)
Best practice: Capturing hi-res photos of the incident scene and any of the equipment involved must be part of your incident investigation protocol, and those photos need to accompany the incident report.
Recommendation: Do not capture these photos with the participant in them, but rather after the fact. Electronically store the photos and everything related to the incident: waiver, photos, incident reports, witness statements, daily maintenance checklists, etc. In many electronic incident reporting platforms, such as Jolt, you can require a place for pictures to be uploaded before the report is submitted.
Mistake: Not. Being. Human.
This one is so important. In most cases, people don’t sue because of what happened—they sue because of how they were treated afterwards. Perhaps the injured participant’s questions were answered with: “I can’t discuss any of that with you,” or “due to legal reasons, we can’t comment.” Or, maybe the injured participant was told, “You shouldn’t have done that. No wonder you got hurt.”
There’s this misperception that once an incident happens, you must be tight lipped and use “legal terms” to protect your company. When in reality, it’s most important to just be human, show empathy, and take care of the participant. In general, people realize they made a mistake that led to their injury. In a time of embarrassment, they don’t want to be made to feel outcast or like they’ve been thrown into a legal issue. They want to be taken care of.
Best practice: Be there for the person, and be supportive in your words and actions.
Recommendation: Leave medical response to the professionals (EMS, etc.). Being supportive does not mean you should accept fault or try to explain why/how the injury happened. You CAN say “I’m sorry,” because you truly are sorry that the injury happened. What you CAN’T say is, “I’m sorry. This was my fault.” You cannot admit negligence or fault, but that doesn’t mean that you can’t be caring, responsive, and attentive.
In reality, just one of the aforementioned mistakes can lead to your operation having to pay a sizeable settlement resulting in increased insurance costs in the future. Take the steps to be proactive, and ensure that you have the procedures in place to prevent these common mistakes.
Cameron Annas is the national practice leader for the Adventure & Entertainment group at Granite Insurance. Contact: [email protected].