In 1968, riots broke out in the streets of Chicago during the Democratic National Convention, highlighting the political turmoil of the time--and also, according to some writers of special events coverage, the dangers of insuring a national political convention. Such concerns are much on the minds of Republican and Democratic Party leaders preparing for their presidential nominating conventions in less than a month.

While many unique events and circumstances--including the Vietnam War and multiple assassinations of high-profile figures--contributed to the unrest within the country leading up to the 1968 convention, some insurance experts pointed out that events concerning politics in general, especially on a national scale, can elicit passionate responses from people unlike most other types of special events.

Both the Republican National Committee and Democratic National Committee refused to comment on their insurance purchasing decisions, or even reveal who was providing coverage for their respective conventions, let alone outline their security and risk management strategies.

But a few in the industry who provide special events coverage gave insight into some of the potential risks and challenges that insurers may face when covering such events.

A national political convention will bring to the fore strong opinions on issues such as war, social issues and choosing the next potential president, noted Letha Heaton, vice president of marketing at Markel.

Such events, she said, draw "fairly impassioned" audiences. "By its very nature, [a political convention] invites divisive and differing viewpoints that can create conflict," she explained.

Both Ken Laderoute, vice president of underwriting at Burns & Wilcox, and Gerry Seidl, who handles contract special risk at Markel Southwest Underwriters, pointed to the 1968 Chicago convention as an example of a worst-case scenario should those impassioned political feelings boil over.

"The nature of politics just creates emotion and protest," Mr. Laderoute observed.

The protests, in particular, were referenced as situations that make national conventions unfavorable risks in many insurers' minds. Asked whether coverage for a convention could possibly extend to the actions of protestors, Mr. Seidl said, "That's the big question."

He noted there will be demonstration permits involved, and with those permits, there will be additional insureds and increased exposure to consider "You're going to get named," he said, referring to the insurer handling the convention.

Many of the assault-and-battery issues that may arise should a protest get out of hand could be excluded from a general liability policy, according to Mr. Seidl, but he added that the process to enforce such exclusions could be costly. And the situation gets even more complicated when considering additional insureds such as the city's police department or the city itself.

"You get into all these additional insureds--whenever [the DNC or RNC] want to get a permit...to do anything, they have to name everybody as additional insureds," Mr. Seidl said. "Now a lot of it is assault-and-battery type stuff, and we can exclude that, but you still have to go in and typically defend these people until you can get yourself out of it."

Mr. Seidl laid out a potential exposure scenario: "Let's just say that you have 100 people injured, and 75 of them get attorneys--and 60 of those 75 file suit." He said that an insurer can enforce its exclusions in court, "but you can spend $20,000 to $25,000 on each case trying to have the policy wording actually apply."

While large cities in general may concern insurers, the particular city hosting the event likely does not present any additional risks as far as the potential for protests to turn violent, according to Mr. Laderoute.

But Mr. Seidl said the location can be a factor when the insurer goes to court, and he noted that judges in cities such as Miami or Los Angeles are generally less inclined to side with insurers when there is a coverage dispute.

Regarding the locations of this year's conventions--St. Paul-Minneapolis for the Republicans, and Denver for the Democrats--Mr. Seidl observed: "What I've seen so far, it looks like the one in Denver is expecting perhaps more trouble than the one in Minneapolis." He said this probably does not have to do with the location itself, but rather with the political climate.

Another issue that may cause problems for the DNC and RNC is securing coverage for terrorism.

"I would definitely not want to offer it," Mr. Seidl said, noting the increased risk from a high-profile political event like a national convention. The political conventions will probably attempt to secure such coverage, he added, but insurers may ultimately be unwilling to provide it.

Potentially complicating insurance matters on the Democratic side is the decision to move Sen. Barack Obama's convention acceptance speech from the indoor Pepsi Arena to the larger, outdoor Invesco Field.

"Now you've thrown, certainly, an added exposure into the mix," said Mr. Seidl, explaining that the added exposure has more to do with the increased attendance rather than the switch from an indoor arena to an outdoor stadium.

Mr. Laderoute said that, generally, indoor venues are better for insurance purposes because of easier crowd control, but he added that because Invesco Field is a stadium, it should be well secured.

From a security standpoint, he said the Obama nomination acceptance speech will probably be handled similar to a sporting event.

He also said the convention's insurer should get more premium because of the change in venue, since the insurance rate is usually based on a head count.

Like Mr. Seidl, Mr. Laderoute noted that more people also mean greater exposure.

Speaking to how insurers could possibly limit their exposure, both Mr. Laderoute and Mr. Seidl said it is difficult to pull off because of the nature of the risk.

Mr. Laderoute said there is "a lot more exposure for spectator injury or general public injury at a political convention than any other type of convention that is more orderly than what we would see at political conventions."

As an example, he compared a political convention to the Specialty Equipment Marketing Association convention that will be held in November in Las Vegas.

The SEMA show, he said, will not be open to the public, and attendees will be auto installers and retailers who will show up to look at exhibitions or buy items.

There will be nothing in the way of protests or demonstrations, Mr. Laderoute noted, and he described the event as "low-key, orderly, at-your-own pace."

One measure that an insurer may want to take when covering a political convention, suggested Mr. Laderoute, is to look at contractual arrangements.

"What kind of indemnification agreements do [the conventions] have to sign with the owners of the arena or stadium as far as slip-and-fall and trip-and-fall type claims in the facility as a result of the condition of the facility?" He added, "You could end up being liable for anything that happens, even though there's no negligence on the part of the convention itself."

Mr. Seidl said that an insurer would want to start protecting itself by excluding wrongful acts, but he noted this could be difficult if the police department is named as an additional insured.

If a situation gets out of control, and there is police action, "is it really assault and battery, or is it just the police department doing their normal function?" he said.

He noted that the police in Denver are already debating how to handle protests.

News reports support this observation, with many stories detailing how police are observing protest Web sites to look for signs of trouble, and answering media inquiries about which methods of force may be used should protests turn violent.

Special Reports /

Political Conventions Pose Major Risks For Parties, Candidates And Insurers

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