Welcome to the 2012 Nebraska Agri/Eco-Tourism Workshop

1. Insurance Break-out Session January 31st, 2012 Presented by Brent Skiles Welcome to the 2012 Nebraska Agri/Eco-Tourism Workshop

2. Topics • Risk Management Process • Agri-Tourism Risks • Coverages Available • Incident Management • Questions

3. 5 Risk Management Steps • Step 1 = Risk Identification • Process of identifying and examining the potential sources of losses faced by your operation • Logical classifications • Property • Human Resources • Liability • Net Income Identification methods • Checklists • Flowcharts • Insurance Policy Analysis • Physical inspection • Financial analysis • Contract Identification and analysis • Policy and procedures review • Loss History review • Experts

4. 5 Risk Management Steps continued… • Step 2 = Risk Analysis • The assessment of the potential impact that various risks can have on your operation • Qualitative Analysis • Risk assessment • Financial assessment • Loss data assessment • Quantitative Analysis • Cost benefit analysis • Costs of risk calculations

5. 5 Risk Management Steps continued… • Step 3 = Risk Control • An action to minimize, at the optimal cost, losses which strike the operation • Pre-loss – 6 techniques of risk control • Avoidance • Loss Prevention • Loss reduction • Exposure segregation (separation or duplication) • Transfer (either Contractual or Physical or both) • Combination of techniques • Post loss techniques • Claims Management • Litigation Management • Disaster Recovery

6. 5 Risk Management Steps continued… • Step 4 = Risk Financing • The acquisition of funds at the least possible cost to pay for the losses which strike your operation • Retention • Funds from within your organization • Active = property deductible • Passive = You know you will have to pay for it but no plan exists • Transfer • Contractual arrangements were losses are financed from outside the organization • Both insurance and non-insurance methods

7. 5 Risk Management Steps continued… • Step 5 = Risk Administration • Implementation and monitoring of your Risk Management Plan • Implementation • Commitment and participation • Communication • Training • Accountability • Monitoring • Indicators and measures • Regular Evaluation • Adjustments and Feedback

8. Property Exposures - Common • Fire exposure is most common • Agri/Eco-Tourism operations are often located in rural areas with limited water supplies • Fire Departments are often volunteer • Housekeeping is critical in preventing fires and other property losses • Smoking on premises should be prohibited or confined to specific areas • Fire Extinguishers should be provided for all structures

9. Property Exposures - Natural • Lightning prone area – Operation should have lightning protection system • High Wind/Hail area – roof construction should be adequate to protect from roof damage. • Wildfire area – make sure appropriate clearing of brush and trees (fuel load) between potential burn area and buildings • Heavy snow areas – make sure buildings are rated for snow load, taken preventative measures to remove snow from roof if possible

10. Property Exposures - Special • Cooking exposures and Camp fire exposures • Heating and Cooking stoves – possibly in cabin or common area • Barbeque grills – either at campsites or common areas • Fire rings • Need to enforce adult supervision • Make sure area surrounding grills and fire rings is free from combustibles • Fire watch patrol at end of evening • Appropriate means to suppress the fire – water source/extinguishers readily available

11. Property Exposures - Maintenance • Property maintenance is key in preventing property losses • Work shops should be neat and well arranged with restricted access to employees only • Flammables (gasoline) should be stored in a non-insured building or in proper storage lockers away from ignition sources. • Limit the number of containers of gasoline on premise • Housekeeping of buildings both inside and out • Clear brush and debris away from buildings • Make sure trash is taken out consistently • Smoke detectors tested regularly • Chimney/stoves flues cleaned annually • Kitchen/grill cleaned regularly to prevent grease build-up

12. General Liability Exposures – Premise • Review to identify potential hazards to the Public/Guests including: • Warning guests of slippery surfaces around showers and restrooms • Road Condition – throughout premise • Uneven walking surfaces • Condition of sidewalks, patios, railing and decks • Speed Limit signs • Warnings for ponds, lakes and/or rivers on premise • Tree trimming and maintenance • Parking/vehicle access • Any attractive nuisances?

13. General Liability Exposures - Activities • Equine Exposure • Trail and Pony Rides • Hay rides • Special risk because of potential for multiple injuries • Utilize common sense • No alcohol allowed onboard • Employee to guest ratio, utilize two over 7 guests • Recreational/Equine Statutes – do they offer enough protection? • Negligence • Waivers of Liability – do you use them? • Eliminate the “you never told me so” claims

14. Claim Examples • Fire burned building to the ground – use of space heater - $268,802 • Guest rented Segway from insured, crashed, injured, claimed improper training as owner told them to sign paper and have fun - $215,429 • Guest fell from ladder while trying to climb into cabin loft, ladder not properly secured - $202,357 • Chimney fire (not cleaned annually) spread from that cabin to 9 others for a total of 10 cabins damaged - $196,624 • Roof collapsed from weight of ice and snow - $187,282 • Guest slipped on uneven concrete at bed & breakfast - $151,000 • Guest (minor) was bitten by owner’s dog - $96,286 • Guest accused owner of not maintaining basketball court properly, he was injured - $70,390

15. Incident Management What to do when something bad happens • First Priority is care of the injured party regardless of fault • Next Steps • Time is of the Essence • Brief period after incident to treat and speak with the injured party • Interview your staff and other guests – complete incident/accident reports • Respond to the media if necessary • Keep one staff member with injured guest • From time of initial response/treatment to evacuation • If you are able, wait for the guest at the doctor’s or hospital • Follow up after initial treatment

16. Incident Management continued… • What do I say? • Be responsive • Show care for both injured guest and other guests • Help your guests feel they are in capable hands • For example “I’ve sent for help. The techniques we practiced in the Red Cross first aid class seem to have stopped the bleeding. I’ll do everything I can to keep you comfortable until more help arrives.” • What don’t I say? • Don’t admit wrongdoing • For example: “you are the third person to fall on that sidewalk this week” • Don’t make value judgments • For example: “well, that was a stupid thing to do” • Don’t profess to be a medical expert • Don’t guarantee a speedy evacuation • You may not have control over the timing and your idea of “soon” may be very different from that of an injured party

17. Incident Management continued… • If possible get pictures • Pictures of the incident site showing the condition of the area – i.e. sidewalk, decking, stairs, playground, etc… • Pictures of the injured party • The Media • If the incident is serious (involves a fatality) expect contact • Assign only one spokesperson to handle all Media related matters • Spokesperson should prepare factual statement • Do not assign blame or admit guilt • If you do not know an answer to a question, say the answer is unknown • If you see or hear incorrect information – correct the information as quickly as possible by providing the media with correct information

18. Incident Management continued… • After the incident • If equipment is involved and could have contributed (tractor, wagon, golf cart, etc…) pull it out of service • If the injury prevented a person from completing their stay or a particular activity, refund the fee they paid • Follow up with the injured party to see how she/he is doing • Consider even giving the injured party a voucher to come stay with you again after she/he recovers • Report the incident, no matter how minor, to your insurance company/agent as soon as possible

19. What type of Insurance is relevant to an Agri-Tourism Business? • Worker’s Compensation • Automobile Liability Coverage • Casualty Insurance - General Liability - Personal Injury - Property Damage - Product Liability - Advertising Injury - Medical Payments Coverage - Employment Practices Liability - Excess/Umbrella Coverage • Property Coverage - Building and Contents - Business Income - Inland Marine

20. I already have Insurance? • If you are running an agricultural operation and already have a farm and ranch policy don’t assume that your new agri or eco tourism operation will automatically be covered by your existing policy. • Ask your agent or Company

21. How to find the right Insurance Company? • Find a Company that understands what your operation actually does. • This way they can properly assess your risk and protect you from the exposures that exist in an Agri-Tourism Operation. • Look outside of Normal Personal Lines Carriers to a Specialist. • Good Financial Backing – AM Best Rating

22. Finding the Right Insurance Company Continued… • Two Types of Carriers - Admitted and Non-Admitted • Good Price…..For the Right Coverage - Make sure you are properly covered – understand what you are buying. - Small Savings could cost a lot when a lawsuit is filed and you have no coverage to protect your operation.

23. What Questions to Ask Our Agents? • Don’t hold back on details about your operation. • Explain all current and planned activities • Does my Agent Understand what I do? • What is their expertise in this class of insurance, have they insured other, similar operations? • Am I fully covered. Not to be confused with Full Coverage! • People tend to use this term full coverage in the insurance business, the reality is that all policies have exclusions.

24. Agent Questions Continued… • Ask for details about the company they are placing your coverage with: - Admitted or Non-Admitted Carrier? - AM Best rating of the Carrier (financial strength)? - How long have they been around? - Do they insure other operations like mine? - What questions are they asking, do they make sense based on your operations? - Are they discussing pricing options with you including ways to share the risk and the cost (higher deductibles, loss control inspections, waivers, controls, etc…) – best protection for your premium dollars.

25. Premium Reduction Methods • Provide accurate, detailed and complete information to your agent/insurance company • Application • Loss History • Waivers • Details of Controls in Place • Website • Underwriters review these closely • Share some risk • Determine the coverages that make sense for your operation (more bang for your premium dollars)

26. Summary • Utilize the 5 risk management steps to make your operation better for your guests and yourself • Some common losses can be prevented or mitigated with basic property maintenance. • Majority of General Liability losses occur because of poor premise condition • Proper incident management is key in obtaining the best possible result out of a bad situation

27. Questions & Contact Information • Questions? • Contact information: Philadelphia Insurance Company Brent Skiles, Assistant Vice President Direct phone: 303-657-5026 Email: bskiles@phlyins.com Website: www.phly.com