Under general principles of corporate law, an organization is liable for the acts and omissions of its employees and agents while they are acting within the scope of their duties, but it is normally not liable for the acts of independent contractors and other third parties not under its general supervision and control. But what many organizations do not realize is that they may have inadvertently agreed to be contractually liable at a conference for the actions of parties who are totally beyond their control and not covered by their liability insurance policy. That's why it pays to carefully read and understand the fine print in conference contracts.
Liability TrapsThere are two common ways that organizations can assume contractual liability at conferences. First, some hotel contracts will have a clause that says that the organization sponsoring a conference at the hotel agrees to be legally liable for injuries or property damage caused not only by its own employees but also by any exhibitors, even if the sponsor exercises no meaningful ability to control the actions of those exhibitors.
Second, nearly all convention center rental contracts have an onerous clause that makes the organization renting the convention center liable for injuries or property damage caused by literally anyone entering the building. For example, one major city's convention center has a clause that reads as follows:
[Leasing party] shall indemnify, hold harmless, and defend [the convention center and the city] from any and all liabilities, damages, actions, costs, losses, claims, and expenses (including reasonable attorney's fees) arising out of, caused by, or resulting from any act, omission, negligence, fault, or violation of law associated with the use or occupancy of the facility by the Leasing Party, its employees, agents, contractors, patrons, guests, exhibitors, licensees, invitees, or any other person entering the facility with the implied or express permission of the lessee. As you can see from the underlined language above, the entity leasing a convention center is agreeing to accept legal liability for the acts of a huge laundry list of people over which it often has absolutely no control. The phrase "any other person entering . . . with implied . . . permission" is so broad as to include practically anyone else who is able to gain access to the convention center.
Reducing Legal LiabilityThe most obvious way to reduce or eliminate legal liability is to delete (or at least tone down) any liability clauses in the contracts you sign. The hotel or convention center will, of course, initially try to tell you that they cannot budge on the liability clause. But if you are willing to walk away from the deal, the facility will often sing a different tune.
If you are unable to eliminate the clause, then there are at least three things you can still do to reduce legal exposure. First, make all exhibitors, contractors, and attendees at the conference sign an agreement in which they are obligated to indemnify your organization for any injuries or property damage arising from their own actions. This language can be inserted into exhibitor agreements and also into any registration form signed by attendees. However, if the person has no money with which to pay the indemnity claim, the person may be "judgment-proof," and the indemnity clause may not do you much good.
Second, consider putting reasonable restrictions on activities that may cause undue injury. For example, in the absence of a physician's statement indicating otherwise, you can probably restrict disabled patrons to normal electric scooters or similar devices that have a much slower speed than the increasingly popular Segway. Even then, if you see exceedingly dangerous handling of an authorized mobility device, you may be justified in barring that person from the remainder of the conference in order to protect your organization from liability. Reducing the number of events at which a sponsoring organization serves alcohol will also go a long way to reducing liability exposure.
Finally, check with your insurance broker to see if it is possible to get reasonably priced insurance that is broad enough to protect and defend the organization if it becomes contractually liable for exhibitors, guests, and other third parties beyond its control. Many insurance companies are going to be hesitant to insure against such a broad and unknown risk, but it is still worth looking into.
Ben Tesdahl, Esq., is an attorney concentrating in nonprofit, corporate, tax, and contract law, including meeting and convention law. He is with the law firm of Powers, Pyles, Sutter & Verville, P.C. in Washington D.C. He can be reached at (202) 466-6550 or at [email protected].