Outdoor Recreation accounts are usually considered “concessionaires” or “permittees,” meaning they work on property that is owned by the government. Typically these permits come from the US Forest service or the National Park Service in the form of administrative properties intended to turn a profit. There are smaller operators as well.

There are several unique insurance challenges that come with outdoor recreation accounts, as their concessionaire status and special relationship with the government results in a complicated interaction between public and organizational safety and government intervention.

Meeting Key Performance Indicators

For concessionaires, the government has a set of indicators they look for that allows them to maintain a contract. These KPI’s are as follows:

  • Public Reviews. When deciding whether to contract with an organization, the government looks at the institution’s public regard–does the public feel safe around them, how to respond to public criticism, and do visitors have positive regard for them.
  • Accident Prevalence. How many accidents has the organization recorded in the last 5-10 years. A high frequency of accidents indicates a contract may be problematic.
  • Public Safety. What public safety initiatives and policies does the organization have a history of implementing? No record of public safety represents too great a liability for the government.
  • Resume. Does the person or organization have the qualifications to deliver a safe operation? It’s hard for a new operator to break into the industry, but this is in the interest of public safety and bottom line for expenses.

Liability and Public Admission

Outdoor recreation operators face unique liability concerns since they see a large volume of traffic. The efforts the operator is taking to reduce their liability is the insurer’s #1 concern.

Here’s some liability nightmares we’ve seen in the past:

  • A tree falling on a campers tent, making them a quadra-peligic. The government and organization are sued for negligence for not having the tree removed before it was a problem.
  • A drowning occurs in a lake. Regardless of the cause (maybe it was a heart attack, for example), the government and organization is sued for “not having proper signage”.

Specious or not, these lawsuits can drag on for a long time, causing the organization, government, and insurance company millions of dollars. Insurance can more confidently work with concessionaires who take demonstrable steps to mitigate these liability concerns.

Climate Change Issues

Climate change presents a unique liability challenge for outdoor recreation operators. The following are some examples:

  • Waterborne activities. Whether it’s a full blown marina or a resort that offers water sports, changing water levels can greatly affect the organization’s ability to operate safely and effectively. A drought, for example, prevents such activities. Likewise, flooding affects the safety of visitors and damages profits.
  • The Sequoia National Forest has been hit hard by an invasive species of bark beetle. This leads to an increase in dead trees, which in turn helped fuel a forest fire more severe than normal. Visitors had to be helicoptered out to save their lives, which presents a massive cost to the organization and their insurers.

Policies are still developing, but we’re getting better at deciding how to insure these concessionaires in light of these challenges.

To get additional insight on how to navigate challenges facing outdoor recreation operators, contact Interwest Insurance Services.

Valerie Albert
Author: Valerie Albert

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