By Rob Mulhern, senior vice president, PreferredClub

Over the past several years, golf and country clubs have lookedto boost falling revenue by adding extra amenities, from waterparks and children's activities to new food and beverage events.Although these amenities can offset the financial impact ofdeclining membership and fewer rounds on the golf course, they alsocarry additional risks.

Without proper guidance, clubs may face losses that outweigh anygains they see in revenue. Agents and brokers should help theirclubs assess these risks, educate them in proper risk managementand update insurance policies when appropriate.

Read on to learn more about the amenities:

1. Children's activities

Some clubs are appealing to members who have children byoffering babysitting services, day camps, junior golf camps orsimilar amenities. Unfortunately, children's activities carry theliability risks that go beyond serious injury or even death. Therisk of physical and sexual abuse exists wherever adults are caringfor children and can not only result in extremely large claims, butalso damage a club's reputation.

Risk management practices should be implemented to avoid abuseand molestation and reduce the severity of claims:

• All staff members who work with children must get recommendedbackground checks
• Clubs should institute a “two-adult rule” for these activitiesso no child is ever alone with a staff member, as well as properchild-to-adult ratios
• Define for staff what constitutes acceptable interaction with aminor and provide training
• Implement reporting procedures that protect victims and ensureany incident is reported properly.

If offering children's activities, clubs also need abuse andmolestation coverage. If the club is offering stand-alonechildren's activities for the first time, they may lack thiscoverage or have insufficient limits. Even meritless claims can becostly to defend and take months to resolve, so proper coverage isessential.

2. Splash pads and water parks

Pools have long been a huge exposure at clubs, but new featureslike splash pads, lazy rivers and slides hold a different set ofdangers, including increased risk of slips, falls and infectiousdisease. Risk management practices and insurance coverage need tobe updated to account for these amenities:

• Drains must comply with federally mandated Virginia Graeme Baker Pool and Spa Safety Act
• Diving boards, slides and other pool equipment should beseparated from the rest of the pool, meet the manufacturer's depthrequirements and always be monitored by lifeguards
• Traffic in and out of water parks and pools should becontrolled with self-latching gates
• Cryptosporidium (aparasite) is a concern in splash pads, so water quality must betested and monitored regularly. Advise clubs considering a splashpad to avoid the types that re-circulate water.
• Lifeguards should be available, but when they are not,“use-at-your-own-risk” language must be prominently displayed; whenthe pool is closed, it should be locked for children's safety
• Rescue equipment should be readily available and wellmaintained.

Finally, the club's coverage should be sufficient for new wateramenities—limits may need to be increased. Plus, agents shoulddiscuss with the carrier any changes being considered to ensure thenew exposures can be properly covered.

3. Alcohol-based activities

Food and beverage services with alcohol have always been a majorcomponent of club revenue, but many clubs now are adding specialdinners, family nights and other events that feature alcohol ormake alcohol available more often. When alcohol becomes moreprevalent, a club's training and risk management practices shouldbe assessed and improved, if necessary.

Of course, the best risk management tactic is to reducealcohol-based activities, but many clubs depend on alcohol salesfor revenue and to attract guests. Creating a safe environment forguests to enjoy alcohol is key. Clubs should have writtenprocedures, cut-off guidelines and a call-a-cab program forintoxicated members, as well as training for valets.

Many clubs also benefit from an established training program,such as Training for InterventionProcedures (TIPS). Every staff member involved in alcohol salesshould be trained.

If a club increases alcohol sales or changes when and wherealcohol is served, their insurance coverage may also need tochange. As with the water- and children-related risks, assesscurrent coverage to ensure limits are high enough.

Risk transfer

Some clubs secure new amenities, including food, beverage andchildcare, through contractors. In these cases, risk transfertactics are important to ensure the club is not held liable for theerrors of a contractor. Contracts should clearly state who isresponsible for what by including “hold harmless” and “indemnity”wording that favors the club. Plus, the club should be listed asadditional insured, and the contractor's policy must respond on aprimary, non-contributory basis.

Golf and country clubs will continue to add amenities inresponse to changing tastes and economic pressures. For agents andbrokers, it pays to be proactive in advising them about their risksand insurance options. By anticipating their needs, you can build along-term relationship that benefits both parties.