ASAE Panel Addresses Katrina Impact

Meetings and conventions in New Orleans and the Gulf Coast region that were affected by Hurricane Katrina not only face relocation and rescheduling, but also questions about liability and insurance claims because of these cancellations. Organizers are also wondering how to prepare for such eventualities in the future.

To help them, the American Society of Assn. Executives & the Center presented a Sept. 12 seminar — available by both conference call and at the organizations' headquarters in Washington, D.C. — titled, "The Devastation From Hurricane Katrina: What Does It Mean for Your Upcoming Meeting?"

Jeffrey Tenenbaum, a lawyer who specializes in association issues, said the laws governing major disasters are vague because there have been so few of this scope. Nevertheless, some of the legal precedents set in the aftermath of Sept. 11 and the SARS epidemic probably apply.

All citywide conventions using New Orleans' Ernest N. Morial Convention Center or three or more hotels through March 31, 2006, were canceled. For April and May 2006 meetings that would normally be starting their promotional efforts now, some tough decisions need to be made, Tenenbaum said. This requires a close look at contracts, specifically force majeure clauses.

"The clause used to come into effect when it was impossible for a meeting to be held, but now the standard is impracticability and frustration of purpose," he said.

Factors that can excuse an association from liability if it cancels its meeting include the length of time between the disaster (e.g., the hurricane) and the meeting's date. The closer the dates, the easier for the association to be relieved of responsibility. But much depends on the condition of the city, facility and hotels at the time the meeting is scheduled.

Insurance broker Louis Novick, president of the Novick Group, said event managers should be aware in advance of what their insurance policies cover. In certain circumstances, insurance covers meetings canceled or hindered because of storm damage or flooding. If a meeting is canceled or curtailed, often net revenue losses are covered, but not all expenses.

For example, if the meeting is held later but attendance is diminished, those losses are not covered. On the other hand, prepaid commitments that are not recoverable, such as speakers' fees, can be claimed.

Another insurance broker, Eileen Hoffman, assistant vice president of AON Assn. Services, said that, fortunately, many existing insurance policies for New Orleans meetings don't have hurricane exclusions. She added that it's important to promptly notify insurance brokers and carriers of potential claims, and include a brief description of what happened, along with any rescheduling or cancellation plans.

And what if a meeting is canceled because it's scheduled for a city whose venues are housing evacuees? Such consequential or indirect losses are excluded by insurance coverage, Novick said.

Participants from 195 sites listened to the ASAE presentation via conference call. The program was recorded and is available for $10 at http://www.softconference.com/asae/xtensions/?snItemNumber=7340. Proceeds will go to Hurricane Katrina victims.