Pope Francis’ two-day visit to Philadelphia this weekend, which will close the Holy Father’s six-day apostolic journey to the U.S., has a special event policy in place with W.R. Berkley Corp. and OneBeacon Insurance as lead underwriters, according to a firm that helped broker the coverage.
DeWitt Stern Group, a New York-based broker and a subsidiary of Risk Strategies Company in Boston, said it has been working on the coverage together with Porter & Curtis LLC, a Media, Pennsylvania-based broker for the Philadelphia Archdiocese.
There are five insurance companies, including lead insurers W.R. Berkley Corp. and OneBeacon Insurance, that are underwriting this coverage. The premium was in the range of “a couple hundred thousand dollars,” with the coverage limit in “tens of millions of dollars,” according to executives with knowledge of the coverage.
LeConte Moore, managing director of DeWitt Stern Group’s Entertainment and Media Division, said he was first contacted by Bill Curtis, a principal at Porter & Curtis, a year ago to work on covering this risk.
“Porter & Curtis is a specialist with archdioceses, Catholic schools and churches. That’s their specialty whereas my specialty is doing event. Curtis said, ‘I am a specialist for unique needs for archdioceses but I don’t know how to do these events like you do. Can we partner and do this together?’ So we agreed to do work on this together a year ago,” said Moore, whose clients have included rock stars, princesses and the Presidential Inauguration committees for four U.S. presidents.
In Philadelphia, the Pope will attend the Roman Catholic World Meeting of Families 2015 conference. Dewitt Stern said the policy covers everything from an irreplaceable historical lectern once used by President Abraham Lincoln to deliver The Gettysburg Address in 1863 to Philadelphia’s Benjamin Franklin Parkway event Sunday, where the Pope will say Mass before an anticipated 250,000-plus people. The special event insurance would cover events during Pope’s two-day visit to Philadelphia as well as affiliated events by the World Meeting of Families, a Roman Catholic group that helped organize the papal visit.
The policy also covers “load-ins” including preparations for the events such as “television cables being run and altars being built and the bleachers being built and all the port-a-potties being delivered.”
“Sometimes you might have to put the policy in effect two or three months ahead of time even though the major event is the big concern. Things can happen and things do happen probably more frequently during what we refer to as the load-in,” he said.
The papal visit to Philadelphia is “a very large event, probably larger than anyone I have worked on over 30 years,” said Conte, who had previously launched and led Marsh & McLennan’s Entertainment Practice for 20 years before joining DeWitt Stern in 2004.
The Pope’s visit is similar, however, to Bill Clinton’s inauguration when he was first president, said Conte. “The reason is, the Presidential Inaugural Committee, which throws a party for the president once he is elected, is not a government body. So they raised a lot of money and had a party for the president,” he added.
Clinton had a big event at the National Mall in Washington, D.C., and had a huge party, he said, and there were no real boundaries as to where the event or the risk stopped and started. “So these events for two days in Philadelphia are very much like that, because there is no perimeter as to where the underwriters may get pulled into a claim or not,” said Conte.
During the Pope’s visit to Philadelphia, a claim could come from “anybody coming to the event, anybody associated with the event,” Conte also added. “If I am not even coming to the event and if I fall over some wires or television cables that are around, I could claim that my injuries were caused by the negligence of the Roman Catholic World Meeting of Families and try to present my claim. That’s what makes this risk more concerning perhaps for underwriters than others,” he said.
Conte also noted that there is a monoline terrorism policy purchased, so the U.S. liability underwriters are not writing that coverage. He added that while terrorism is always a concern, there is more security at this event than anything he’s ever seen. “For obvious reasons, the U.S. does not want something to happen on their soil and that’s another reason why the underwriters think this is a good risk because you got as much security as you possible can here,” he said.
Underwriting Special Events
Conte said that while most U.S. insurers shy away from underwriting special event coverages, it can be very profitable for those that have developed expertise in this area.
“The majority of insurers in the country don’t want to insure special events and the reason is because it’s a one-shot deal. They get one chance to make money and the risk is over,” he explained. “It’s not like most other types of insurance, which are annual policies and if you have a bad experience, hopefully you get the renewal, you get the increased premiums and you develop a partnership — whether it is with loss control or in other areas with the client. You develop that and you hope for a long-term relationship.”
But with a special event, Conte said, it’s one shot: “You can’t make an amendment for the next time in loss control.”
The ones that do it, such as W.R. Berkley Corp., the American International Group and OneBeacon to name a few, understand the business, he said. “They understand that they only got one shot at this. They make it a specialty of what they do, and it runs for most of them very profitably because they write a lot of the businesses and spread their risks out,” said Conte. “Many of these risks have minimal losses. The special event business, while it looks on the outside quite scary, can be — and typically is — very profitable for insurance companies that know how to underwrite it.”
However, he added, “you can’t just dip your toe in the water in this business because if you write only one risk and if it goes wrong — it could be just one simple trip-and-fall — depending on where it is and who it is, it could be over $100,000 and the premium isn’t going to be that.”
Conte also clarified that writing these special event risks profitably does not mean “putting a whole bunch of exclusions on the policy.”
“Many underwriters try to put exclusions on the policy that we would negotiate off,” he said. “For example, they would exclude collapse of temporary structures, any injuries from fireworks, any collapse of bleachers, things like that and you have to negotiate those exclusions off the policy. If you are going to protect your client, at the least get the defense costs if something tragic happens.”