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FEBRUARY 2014 issue of
Rental Management

Risk Management: You can't pick and choose

“Winter Fun Fest.” Those three words bring to mind snow, sledding, skating and other frosty fun. One school district had an annual event that provided activities completely opposite of those cold weather happenings.

Each year they held their Winter Fun Fest towards the end of January. The annual event usually had a warm-weather theme with tropical decorations and attire for all. Everyone who entered received a lei along with their choice of sunglasses, shells and beach balls to take home.

There were skewers of fruit, Hawaiian pizza and fruit smoothies to drink, each adorned with a tiny umbrella. A local dance studio was contacted and one of their dancers gave hula lessons. Grass skirts were provided for photo ops. Palm trees and volcano murals decorated the walls and floor space. It was a warm-weather wonderland away from the frigid outdoor temperatures.

In keeping with the tropical theme, the organizers always included some type of water activity. This particular year the main attraction was a dunk tank. Teachers took turns in the dunk tank and students lined up to toss a ball and watch their favorite teachers fall into the water. The tank was set up in an interior courtyard where the splashing water would not be a problem and nothing would get damaged.

For an hour and a half everything went as planned. One at a time, teachers would enter the dunk tank, sit down on the seat and wait for the students to finally connect with the paddle that would dump them into the water below. As the Hawaiian Luau was nearing the end, a favorite teacher entered the dunk tank for his turn. Time and again the balls would connect with the paddles and the teacher splashed into the water to the sound of giggles and cheers from the crowd of students surrounding the dunk tank.

No one is exactly sure what happened next. It appears the teacher’s turn was over and as he was exiting the dunk tank he grabbed ahold of the seat to assist him in pulling himself up and out of the tank. The seat gave way and he hit his head.

The school district returned the dunk tank to the rental store without mentioning the teacher’s accident or injuries. Since the rental store employees were not aware anything had happened, they continued to rent the dunk tank for several weeks. No one else was injured or indicated any malfunctions with the machine.

The first notice the rental store owner had of the accident was a letter received from an attorney representing the injured teacher. A lawsuit quickly followed the letter from the attorney. The rental store owner reported the accident to his insurance company and it launched an investigation.

The rental store owner indicated that in a properly functioning dunk tank, the only way the seat would have reacted in that manner is if the seat had not been latched. Whether the seat was latched or not, it is not meant to be used while entering or exiting the dunk tank. Inside the dunk tank there is a bar to assist in entering and leaving the tank. The rental store employees believed they provided an instruction sheet with the dunk tank at the time of rental, but nothing was documented.

The lawsuit alleged that the dunk tank impacted the teacher’s head and/or body causing serious and severe injuries to his head, face, lips, teeth and neck. The lawsuit continued, stating the teacher suffered from headaches and a speech impairment as a result of the accident.

Arbitration was scheduled between the manufacturer, the rental store and the injured teacher. The rental store’s portion of the settlement was $45,000, a fraction of the total.

The insurance company for the rental store enacted the wording in the rental contract that allows it to collect from the renter in the event of an accident, but the rental store did not want the insurance company to pursue the renter. They were afraid it would damage the good relationship they had built up with the school over the years.

Based upon the language in the contract signed by the renter, the insurance company did attempt to collect from the renter the amount it paid out to settle the claim.

Be sure the wording in your contract states exactly how you wish to proceed in the event of an accident. You don’t get to pick and choose after the occurrence how you want to apply the wording in your contract.

Mary Ann Gormly, CERP, is a loss analyst for ARA Insurance, Kansas City, Mo. For more information, call 800-821-6580 or visit ARAinsure.com.




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