In this video, you’ll learn what to look out for when serving alcohol at meetings and events. You’ll get an understanding of what a group’s risk level is and how it interferes with the hotel’s risk level, the concept of a “social host”, and things you can do to manage risk when serving alcohol at your event.
Experts
Barbara Dunn (representing Groups) Partner at Barnes & Thornburg, LLP
Lisa Sommer Devlin (representing Hotels) Devlin Law Firm, P.C.
Overview
For many organizations the ability to host receptions and dinners and other functions is important to their goals to networking, to socializing etc. And alcohol plays a component in that for many groups.
Group Perspective
It’s important to understand what the group’s risk level is when it comes to service of alcohol and how that risk level interfaces with the hotel’s responsibility as a liquor license holder.
The requirements for licensing vary significantly. But suffice it to say if you’re working with a restaurant on a private event or a hotel or a caterer for an offsite event, certainly, that individual that company needs to have a liquor license in order to serve or sell alcohol.
There is a concept as well known as “Social Host”, a social host in 32 states is actually a sponsor of an event at which alcohol is served. And either someone at that event is served that is under the age of 21 or is over served alcohol, that can trigger not only the liquor license holder to be responsible for that claim or anything bad that happens out of that but also the social host.
The fact of the matter is that serving alcohol and driving and even not driving can cause situations and concern and risk. So, it is important to manage that risk.
There’s a lot of things you can do to manage risk. Certainly, all the practical things that groups can do to make sure someone doesn’t drink too much.
For example: Closing the bar during dinner or having one free ticket and otherwise people have to pay for drinks.
Indemnification can be important. Liquor license holders are trained. They have to have a certain requisite level of insurance to sell. And if the hotel or caterer was negligent and over serving someone or not checking an ID for someone, that could trigger an indemnification obligation on the hotel’s part.
Groups need to think about general liability insurance. Most policies exclude liquor claims coverage. So you will want to discuss with your insurance broker and ask to get that coverage. Typically, that’s known as a rider or an endorsement to get covered for liquor liability claims. And you do want coverage.
Yes, it’s expensive to have a hotel bartender in there to serve alcohol but you’re getting the benefit of their training.
Hotel Perspective
Advice to groups is don’t get involved in the service of alcohol. I mean that’s the secret bottom line. When you’re having an event, you should say that all alcohol will be served by the hotel. The hotel again has the license.
You shouldn’t have alcohol easily available at hospitality events or parties where people can serve themselves.
It used to be very common to have hospitality suites at big events where there would be a bar stocked and people would come and go. Those kinds of things have pretty much gone away because you don’t want to have a no-host bar situation. Both the hotel and the group could be held responsible if people can serve themselves alcohol and then go out and cause some kind of an injury.
Keep in mind that it’s not just claims from people getting over-served and causing injury. You also have the potential problem in hospitality suites or other situations, where other kinds of things can happen like sexual assault.
You should always focus on having alcohol served by someone who has been trained.
The hotel has personnel trained to avoid potential claims and you should put that responsibility on them. Still have the insurance to cover it, but make sure that alcohol is being served by trained personnel.
It just means that they’ve been trained and there’s different kinds of trainings.
The hotel should only be responsible if they were directly involved in causing that person to be overserved.
Another thing to think about is in social events where people want to bring in their own alcohol. There are lots of bad cases out there where somebody gets intoxicated and causes injury and everybody gets sued.
So, the best thing to do is to ensure that you always have alcohol being served by someone who’s been trained and licensed.
In this video, you’ll learn the difference between formal and informal dispute resolution, how to navigate both, what to address in your dispute resolution clause, and more!
Experts
Barbara Dunn (representing Groups) Partner at Barnes & Thornburg, LLP
Lisa Sommer Devlin (representing Hotels) Devlin Law Firm, P.C.
Overview
Dispute resolution is a contract clause that outlines how the parties will resolve their dispute. If there is not a dispute resolution provision in the contract the parties will be required to resolve any disputes in court.
Alternatively, the parties have the option of agreeing in their contract to various forms of Dispute Resolution processes.
This could include mediation, in which a third-party mediator is hired by the parties to help them reach agreement on their dispute. It could also include arbitration, which is a private hearing process.
An arbitration is like a “mini trial” with witnesses and exhibits, but instead of the outcome being decided by a judge or jury, the case is decided by an arbitrator or panel of arbitrators. So, by agreeing to arbitrate, a party is giving up some rights it would have in a court case.
In most states, the parties to a court case or arbitration pay their own attorney fees. Some states have laws that allow or even require the judge to award attorney fees to one party or another.
The parties can agree in their contract that the losing party will be required to pay the winning party’s attorney fees. This can be especially important in disputes involving smaller amounts. If the parties are arguing over $50,000 and it costs $30,000 in attorney fees to arbitrate the matter (or $100,000 in fees for a court case) the winning party will not be fully compensated if it is not paid its attorney fees.
Group Perspective
Before agreeing to a particular method of resolving a dispute, groups should consult with their legal counsel to ensure the specified method is in their best interest.
While most disputes arising out of hotel contracts can be resolved with any formal dispute resolution, it can be advantageous to agree on a method of dispute resolution.
A “cooling off” period is a good idea for both the group and the hotel – a period of 30 days, for example – for the parties to work together informally to resolve disputes.
Groups should never withhold payment of undisputed charges after a meeting; instead, they should pay the undisputed charges first and then advise the hotel in writing as to the disputed charges, the basis for the dispute and the proposed resolution of such disputed charges.
Given that most disputes between hotels and groups involve the payment of money, a “prevailing party attorney’s fees” provision (i.e., losing party pays winning party’s attorney’s fees plus their own attorney’s fees) often benefits the hotel more than it does the group but, as noted above, groups should consult with their legal counsel before accepting such a provision.
Hotel Perspective
Many hotel companies use arbitration for its convenience, and costs savings.
Choosing an arbitrator who is a retired judge is like having a court case decided by a judge without a jury, which is commonly done in commercial disputes.
Arbitrations can be resolved much faster than court cases, so the parties are not facing uncertainty about their obligations for an extended period.
Arbitrations are private proceedings, so the parties’ dispute will not be publicized.
While appeal of an arbitration award is very limited, it also does not set a legal precedent, so if the outcome is not favorable, it will not be used against the party in future cases.
Attorney fee recovery encourages settlement, as a party will be more likely to compromise if it may be required to pay its own and the other side’s attorney fees if it loses.
Attorney fee recovery is fair to both parties, and makes the winning party “whole.”
Because of the time and expense of court litigation, many legitimate claims are not pursued because it is not cost effective to do so.
Understanding Insurance Requirements for Hotel Events
In this video, you’ll learn the purpose of insurance for your live events. Why do hotels require vendors to have insurance at your event? What does having an additional insured mean for your event? Why would hotels resist naming groups as additional insured? How to check if your vendors have insurance and what to look out for when reviewing your vendor’s insurance?
Experts
Barbara Dunn (representing Groups) Partner at Barnes & Thornburg, LLP
Lisa Sommer Devlin (representing Hotels) Devlin Law Firm, P.C.
Overview
Insurance is critical for events of almost any type. If an attendee or third party is injured during an event and makes a claim for compensation against the venue or the event sponsor, a liability insurance policy will pay for the lawyer to defend against the claim, the costs of defense, and for any settlement or judgment.
Depending upon the type of injury suffered, the settlement or judgment could be millions of dollars, which the event sponsor would be unable to pay. Insurance protects the event sponsor from that catastrophic liability.
Other types of insurance may compensate the policyholder for business interruption, event cancellation, cyber liability, liquor liability, and loss or damage to property.
Group Perspective
Groups should regularly review their insurance policies to ensure they cover all activities of the Group and are in such amounts sufficient to cover the group’s obligations under contracts and overall risk.
Groups should require vendors to carry general liability insurance in specified amounts, to provide the group with a certificate evidencing such insurance, and should name the group as an additional insured on such liability insurance policy(ies).
If a group’s meeting will include exhibits, the hotel will often require the group to take responsibility for exhibitor’s actions; as such, the group should ensure all exhibitors carry insurance and agree to indemnify the group and the hotel.
Any of group’s vendors providing services at the hotel should be prepared to show proof of liability insurance to the hotel and, if requested by the hotel, to agree to indemnify the hotel against the vendor’s actions at the hotel.
Liquor liability insurance coverage is important even if the group is not serving liquor at its event – social host liability may make the group liable for liquor-related claims along with the liquor license holder (hotel/venue).
Hotel Perspective
Hotels require customers to provide Certificates of Insurance to prove that the customer does have insurance.
A hotel may “self-insure” for some or all of its potential liabilities, meaning that its insurance does not apply until the loss is above a certain dollar value. The hotel has sufficient assets to pay claims itself and saves insurance premiums for the hotel.
Hotels may ask customers to name the Hotel as an additional insured under the customer’s policy for the dates of the event. This means that the customer’s policy will pay for claims against the Hotel that arise out of the customer’s event.
Hotels resist naming customers as additional insureds. Hotels host thousands of events each year. If the hotel had to add all of its customers as additional insureds, it would be an administrative burden and would increase the Hotel’s insurance premiums.
Hotels resist accepting customer clauses that require particular types and amounts of insurance. The hotel cannot change its insurance for each event that it holds.
Hotels require third parties who come on premises to provide proof of insurance as their actions can result in claims against the hotel. The amount of insurance required depends on the type of activity/service that the third party will be providing for the event.
Hotel Contract Indemnification & Understanding Your Legal Protections
In this video, you’ll learn what indemnification means, you’ll get an understanding of the concept of “mutual indemnification” and how groups can use indemnification as a risk management tool.
Experts
Barbara Dunn (representing Groups) Partner at Barnes & Thornburg, LLP
Lisa Sommer Devlin (representing Hotels) Devlin Law Firm, P.C.
Overview
In its simplest terms, indemnification means that if a claim is made against Party A because of something Party B did, and Party B must pay for the claim against Party A.
Example: Customer in Hotel’s meeting room leaves an un-taped cord on the ground. Attendee trips over the cord and is injured, and sues the Hotel. The hotel would ask the Customer to indemnify it because the claim is the result of the Customer’s actions, not the Hotel’s. Depending on the type of claim, and the state in which the claim is made, the applicable law may already require some type of indemnification. If parties to a contract agree on indemnification obligations, their agreement will generally apply over the applicable law.
Group Perspective
Groups should ensure that an indemnification provision is included in all meeting contracts so that the hotel/vendor will hold the group harmless if the group is sued as a result of the hotel/vendor’s actions.
Indemnification provisions should cover defense costs (“indemnify, defend and hold harmless….”)
The indemnification provision should protect the group from liability caused by the negligence, gross negligence or willful misconduct of the hotel/vendor, its employees, agents or contractors.
Indemnification and insurance go hand in hand: insurance funds the vendor’s commitment to indemnify the group
As with any contract clause, groups should have their attorney review any indemnification provision as one word can make a significant difference in what is/is not covered.
Hotel Perspective
Under the law of some states, the hotel as operator of the premises can be held responsible even if it did not cause the injury, so indemnification by the customer is important.
Even if the law does not make the hotel responsible as the operator, when an injury occurs during an event, the injured party virtually always makes a claim against the hotel, so it is important to have the customer agree to indemnify the hotel.
Claims are rarely made against customers for an injury that is the fault of the hotel, so indemnification of the customer by the hotel is less important.
Hotels resist “mutual” indemnification clauses, as if a claim is made against both hotel and customer, each side will request the other to indemnify, and so the mutual clause cancels the indemnification out.
The vast majority of all injury claims are settled without going to trial, so no final determination of fault or responsibility is made. As a result, the hotel and the customer each end up paying their own costs of defense and share of the settlement without indemnifying the other.
How to Approach Force Majeure in Your Hotel Event Contracts
In this video, you’ll learn about the key things to remember about force majeure, the main elements of what makes your event a force majeure. What if Force Majeure can be claimed but the group chooses to have the event anyway? Prior to claiming Force Majeure- what needs to happen? Understand what needs to change in your force majeure clause from a hotel’s and from a group’s perspective.
Experts
Barbara Dunn (representing Groups) Partner at Barnes & Thornburg, LLP
Lisa Sommer Devlin (representing Hotels) Devlin Law Firm, P.C.
Overview
The law will excuse parties to a contract from their obligations if performance becomes impossible due to unanticipated circumstances beyond the parties’ control, whether or not there is a clause in the contract on the issue.
Contracting parties may also be excused if the contract could still technically be performed, but there is no purpose in doing so, which is known as “Commercial Frustration.”
Example of Commercial Frustration: is an event scheduled for Person A to give a speech. Person A is hospitalized. The event could still technically take place, but there is no reason to do so because Person A cannot be there. While the law will excuse performance in appropriate circumstances, such as when performance of the contract is “impossible,” it is very common for parties to a contract to include a clause that outlines the circumstances when performance will be excused. If the parties agree on a lesser standard for excused performance, such as “commercially impracticable,” that lesser standard will control instead of the general law. It is important to draft all terms in the clause carefully so that there will not be disputes between the parties as to whether the requirements of the clause have been met.
Group Perspective
It is important that the Force Majeure clause address the two requirements necessary in order to for a party to invoke the protections of the clause:
that a Force Majeure event occurred and
that the Force Majeure event impacted the party’s ability to perform the contract according to the standard stated in the clause, e.g., illegal, impossible or commercially impracticable.
Groups should ensure that the first requirement of the clause includes a “grocery list” of Force Majeure events such as Acts of God, weather, etc. And, because neither party can anticipate all Force Majeure events, the list should include a “catch all” statement at the beginning or the end of the list such as, “including, but not limited to,” or “or any other cause beyond the parties’ control.
If the Force Majeure event qualifies as an item on the “grocery list”, then the party must establish that the Force Majeure event meets the standard of impact. As noted above, commercially impracticable is the preferred standard for groups such that it can establish that the purpose of the meeting cannot be fulfilled (i.e., frustrated) because of the impact of the Force Majeure event.
Commercially impracticable is the preferred standard for groups such that it can establish that the purpose of the meeting cannot be fulfilled (i.e., frustrated) because of the impact of the Force Majeure event.
Groups should consider the possibility that, despite the Force Majeure event, it may choose to perform the contract at a reduced level.
The clause can address such a possibility and provide that the group can perform the contract at the reduced level and that the hotel would waive or proportionately reduce attrition fees for rooms and for food and beverage.
Hotel Perspective
The more terms that are put into a Force Majeure clause, the more opportunity the customer has to cancel the event without having to pay damages to the hotel. Therefore, hotels resist broad clauses.
All terms in the clause should be clearly defined. “Terrorism” can mean many things, and can happen anywhere. “Terrorist act in the city where Hotel is located” has more clarity.
The legal standards for excused performance are generally “illegal, impossible or commercially impracticable (another term for frustration of purpose),” therefore hotels will resist lesser undefined standards like “inadvisable” or “material impact.”
“Disease outbreak” or “pandemics” happen regularly, such as annual influenza, or measles, and do not prevent events from going forward. In light of COVID-19, hotels will resist those terms, but may consider terms relating to government imposed restrictions on travel or event size.
Political issues, like a state adopting a law that is objectionable to the customer, are not a Force Majeure under the law. Hotels will resist clauses that allow customers to cancel without payment for political reasons.