Soundwave Festival: Occurrence, Aggregate and Event Liability
Soundwave Events Ltd is seeking public and products liability cover for a three-day music festival in a council park. Capacity is 12,000 per day. There are two stages, alcohol sales, a pyrotechnic finale, and 40 food stalls. The requested limits are $10m each occurrence and $10m aggregate, with a $250,000 deductible. Last year's event produced 14 medical treatments, a fall from a temporary grandstand reserved at $180,000, and a norovirus outbreak among 30 attendees traced to a food vendor, reserved at $95,000. The security contractor has been criticised for understaffing at another event. The venue has a 10pm noise curfew and a grass slope that becomes slippery in rain. The insurer's underwriting authority is $5m each occurrence; $10m requires senior referral. The broker wants a quick quote because the event starts in six weeks.
1. Assess whether $10m each occurrence and $10m aggregate are adequate for this event. Explain your reasoning.
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The occurrence limit applies to each incident; the aggregate is the most payable in the policy period. Setting both at $10m means one serious incident could exhaust the aggregate, leaving no cover for a second claim over the same three days. A crowd-crush, a pyrotechnic injury and a food-poisoning outbreak are separate occurrences and could aggregate. Given 36,000 attendee-days, alcohol, fireworks and a prior norovirus claim, I would require at least $10m each occurrence and $20m aggregate, or $15m/$30m for a higher-risk profile. The $10m occurrence limit is defensible for a single bodily-injury claim, but the aggregate is not. Referral to senior underwriting is required because the request exceeds $5m authority.
2. Recommend conditions, exclusions and deductible. Justify each.
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Increase the deductible to $500,000 because the prior claims show frequency as well as severity. Impose a pyrotechnics sub-limit of $2m, or exclude pyrotechnics unless a certified operator provides a method statement and liability confirmation. Require a licensed alcohol-service plan, a minimum security ratio such as one steward per 100 attendees, and a crowd-management plan approved by the local authority. Require temporary-structure certificates for the grandstand and stages. Add a food-vendor approval warranty and a products sub-limit of $2m for communicable disease, given the norovirus loss. Require an adverse-weather and slip-risk plan for the grass slope. These conditions target the identified loss drivers rather than applying a generic event exclusion.
3. How should the prior claims affect rating, and what information do you need from the security contractor?
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The prior claims total $275,000 and indicate frequency, so a flat renewal is not justified. Apply an experience modification of 1.15 to 1.25, or increase premium by 20-30%, and reflect the higher deductible. The grandstand fall signals structural and supervision risk; the norovirus claim signals vendor-management risk. From the security contractor, request staffing numbers per shift, supervisor experience, licensing, radio and incident-reporting procedures, training records, public-liability insurance, and details of the understaffing criticism at the other event. Also ask for the contractor's method for managing queues, alcohol-related disorder and evacuation. Without those answers, a warranty on minimum staffing is difficult to enforce.