Evaluating Personal Injury Claims and Insurance Policies Covering Live Events

By Carla Varriale-Barker and Courtney Dunn

The rise in demand for in-person events post-pandemic has meant a corresponding increase in personal injury actions against venues. Consequently, venue-owner and operator clients would be wise to regularly evaluate their insurance policies (particularly general liability insurance policies) to ensure adequate coverage.
Consider this: a venue hosts a concert attended by tens of thousands of “business invitees”, but the showstopper isn’t what’s expected. It’s not the encore, the fireworks, or the crowd going wild. Instead, pyrotechnics have gone awry, a mosh pit has gone wrong or a brawl has commenced in the parking lot. In an instant, the event has taken a turn, and the venue is faced with potential legal actions and fees, and putting its liability insurance carrier on notice of a claim or claims.
A negligence claim against an entertainment venue involves unique considerations. There are unique defenses and considerations that are not issues in other premises liability actions. For example, venues utilize admission tickets with unique exculpatory language and the potential application of the doctrine of primary assumption of risk. These are potential dispositive defenses that a reasonably prudent venue owner or operator should be aware of.
In New York, for example, exculpatory language — whether it appears on the back of an admission ticket or on a venue’s website — may provide a defense against personal injury actions arising from circumstances other than the venue’s own negligence. Exculpatory language may take the form of disclaimers or contract clauses agreed upon before an accident occurs, indicating that attendees must accept these terms to enjoy the event.
While they may not protect the venue from claims related to all types of incidents, the exculpatory provisions serve as a risk management tool for injuries allegedly arising from actions of other concertgoers, venue employees or the use of special effects.
Exculpatory language seeks to balance the risks assumed by the attendee with the venue’s potential negligence. Enforcement of such language has evolved, but two key considerations remain: the language must be conspicuous and must unequivocally describe the type of conduct it covers. Courts view “hidden” language that is not conspicuous or vague statements that attendees “voluntarily assume all risks” with skepticism.
For online ticket purchases, exculpatory language is often presented through “clickwrap” agreements. Unlike traditional waivers requiring a signature, clickwrap agreements necessitate some action on the part of the attendee, such as clicking a box to confirm that the attendee read, understood and accepted the terms. The reasoning behind this requirement is that a court will determine whether the signor made a representation of his or her intent to enter into the agreement he or she has been presented.
Courts typically favor these agreements when attendees explicitly consent to the terms, the language is unambiguous and prominent (think bold and underlined), and the exculpatory language does not contravene public policy. The enforceability of such agreements depends on the specific language used and the circumstances surrounding the attendees’ claims.
As for the doctrine of primary assumption of risk, if a participant in a recreational activity understands the inherent risks involved and still chooses to proceed, the attendee consents to the inherent and obvious risks of injury. The acceptance of those risks eliminates the venue’s duty of care, effectively barring potential negligence claims.
Like the exculpatory language discussed in this article, the assumption-of-risk doctrine will not defeat general negligence claims related to venue maintenance or security issues, but it may offer a dispositive defense to matters that involve an inherent risk associated with the activity, such as dancing, and applies to risks that are not concealed or are unreasonably enhanced. Otherwise, it will be in the court’s hands to determine whether a duty of care existed in the first place and a jury will determine whether any actions or inactions of the venue breached a duty of care and contributed to the accident.
Each entity involved in producing an event — whether a venue, security team or vendor — should assess the amount of their coverage and any governing contracts that might shift responsibility for the defense of a negligence action and create a right to contractual indemnification as well as insurance coverage.
A venue owner and operator should ensure it maintains copies of additional insured endorsements and copies of any liabilities of the applicable liability policies because a Certificate of Insurance is informational only; it is not sufficient to confer any rights, yet there is a common misconception that it does.
Under New York law, an insurer’s duty to defend its insured is triggered when allegations in a complaint suggest a reasonable possibility of recovery under the policy. Even if only a portion of the claim is potentially covered, the insurer may be obligated to defend the entire action. This broad scope can create significant indemnification obligations. To activate these obligations under relevant liability insurance policies, the tendering party must recognize risk-transfer opportunities associated with its policies and vendor/venue contracts.
Contracts should be reviewed for a clear delineation of responsibility; for example, “reciprocal indemnity” clauses in an agreement also reap more confusion than anticipated. The indemnification language should address the respective responsibilities for the intended activities at the venue and address who is responsible for attorney’s fees and court costs.
To maximize indemnification opportunities, the proposing party should send a tender letter as soon as a claim arises. The rationale is straightforward: most costs incurred after the tender request are recoverable, meaning a portion of defense costs spent on behalf of the tendering party can be reimbursed by the entity accepting the defense.
Promptly issuing a tender letter ensures that subsequent expenses are categorized as “post-tender.” In the event a venue owner/operator determines that another entity, such as a vendor or a performer, owes it a defense action or indemnification but receives no response, remedies are available. If a tender recipient’s insurer fails to reply to a tender request within 30 days, certain defenses regarding coverage may be waived.
Pursuant to New York Insurance Law (NYIL) §3420(d)(2): “If under a liability policy issued or delivered in this state, an insurer shall disclaim liability or deny coverage for death or bodily injury arising out of a motor vehicle accident or any other type of accident occurring within this state, it shall give written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant.”
An insurer’s explanation for the delay in disclaiming is insufficient as a matter of law where the basis for denying coverage was or should have been readily apparent before the onset of delay.
With an increase in attendees at concerts and sporting events and the ever-present desire to steer clear of an inflated verdict, venues should familiarize themselves with steps that can protect them from the moment the curtain goes up.
To sum up, a periodic review of any exculpatory language (whether set forth on a website, the back of tickets or electronically) is essential for fine-tuning the types of risks contemplated and guarded against. Likewise, reviews of contract language, particularly insurance procurement and indemnification language, are essential to the ability to shift responsibility in the event of a negligence action.
Finally, general liability and other insurance policies should be assessed in conjunction with brokers and counsel to ensure that the coverage is adequate and complete.