Cities and towns often rent parks and recreational facilities to residents for celebrations such as weddings, club meetings or family reunions. The Tenant Users Liability Insurance Program, commonly known as TULIP, can protect both residents and cities from the costs that occur when a special day does not go as planned.
The SC Municipal Insurance and Risk Financing Fund, which is the property and liability insurance program of the Municipal Association of SC, recommends to its member cities and towns that they require renters to have their own liability insurance. However, residents are unlikely to have the $1 million limit of liability insurance that could protect the municipality from a liability claim if a guest were injured or if the property were damaged. To ensure municipal properties are available and in good working order for years to come, cities and towns can direct renters to the Tenant Users Liability Insurance Program. A tenant user is any outside party using municipal facilities.
TULIP is a reasonably priced, short-term policy offered through the National League of Cities. The policy covers bodily injury or property damage arising out of the use of the municipality’s premises by tenant users. It provides individuals and groups with access to low-cost liability insurance coverage while providing up to $1 million for special events held at recreational centers including park facilities, shelters and recreational facility buildings.
Tenant use of recreational facilities is often geared toward children, and so “attractive nuisances” are commonly present at the location. An attractive nuisance is something on the property that draws children in, but threatens them with harm. Examples include swimming pools, trampolines, paths and stairs, landscaping, bleachers and grandstands. Municipalities must take steps to prevent children from gaining access to an attractive nuisance at a facility. Warning or safety signs are helpful but generally will not protect the city or town by themselves. The rental process should include instructions for adults to keep an eye on children.
Some activities are not eligible for the TULIP program. Prospective renters need to complete the application to know if coverage is available for their event. As with all special events planning, completing the application process well in advance of the rental is critical.
Municipalities should develop a facility use procedure and include the TULIP brochure that includes a website address of the city or town’s TULIP provider and the city or town’s Venue ID code. With this information, the tenant user can complete an online application which asks specific questions about the event. They can also pay for the liability insurance policy with a credit card. If a policy is purchased, the policy names the city or town as an additional insured. A designated city staff member will receive by email a copy of the certificate of insurance. The copy serves as proof that the insurance was purchased for the specific date or dates of the event.
Many organizations, including nonprofit organizations or churches, that rent a park or other recreation facility may already have the necessary liability insurance. SCMIRF recommends that the city request proof of the coverage directly from the tenant user organization’s insurance agent. The proof of coverage, or certificate of insurance, should name the city as “additional insured.” The request should be made at the time the reservation is made — if it is weeks or months in advance — and then again the week of the event.
If a city or town allows the use of their facilities, even a wedding at a gazebo, without requiring proof of insurance, then the municipality faces greater risk exposure. The tenant user or their guests could file a claim against the city if they are injured in a fall, for instance, as they are on the city’s property. A general liability claim paid by SCMIRF on the city’s behalf can impact the city’s experience modifier, which is a factor that affects the city’s premiums.
As with all special events, including those sponsored by the city, SCMIRF recommends performing and documenting inspections of the facility and surrounding area before and after an event. Also, make sure that the city’s designated TULIP contact and the SCMIRF claims contact communicate about any claims related to the events or facilities so a claim can be filed with both policies.
For more information about TULIP, contact Robert Collins, underwriting manager at 803.933.1279 or firstname.lastname@example.org.