Indemnification is becoming the risk management mantra for ski area shops that rent helmets. But many areas “haven’t organized their procedures to meet the program requirements,” said ski industry defense attorney Paul Rosenlund. Helmet rentals represent a new service, and shops are still learning how to incorporate them into their operations. Case in point: Only slightly more than half of Boeri’s client shops completed the necessary paperwork to obtain coverage. That illustrates the difficulty shops have had in implementing new practices.
Several suppliers have introduced conditional indemnification programs since Boeri’s program debuted last fall. Leedom, Ovo and others followed during the season; Burton and W Helmets have announced programs this spring. The proliferation is sure to continue, and with it, confusion over these programs.
The Programs
Most indemnification programs are modeled on what the binding companies have done, but tailored for helmet rental. “We’ve established a relatively commonsense protocol,” said Jeff Raverby, Boeri’s VP sales. “There are a lot of steps, but you just have to follow them. The shop is basically building a case file. That gives us the ability to defend them.” This concept applies to indemnification programs generally.
But there are differences—some big, some small—between programs, and shops should consider these differences when choosing a helmet source. For instance, Boeri’s plan offers the option of online certification of rental techs, whereas Ovo’s plan offers in-shop rep training and programs customized to the shop’s situation. Since such details vary from supplier to supplier, it’s important to understand what is and is not included.
Raverby cautioned shops to read the fine print and be sure that they are getting the coverage they expect. Ovo’s Pete Fickheisen pointed out several issues shops should investigate to make sure employees can perform each step of the protocol. Find out how and where records are kept—at the area, or sent to the supplier?—and determine how to handle them. Since fit is a key factor in helmet performance, make sure the procedures help your employees get it right. And how do you inform and instruct the customer to make sure they understand the benefits and limitations of the product? These details should be spelled out clearly, Fickheisen said.
Common Misconceptions
John Logan, senior vice president of Sullivan & Curtis, a risk management and insurance brokerage firm, said that the lack of compliance with indemnification protocols stems in part from a couple of basic misconceptions about just what conditional indemnification is.
First, he said, many areas don’t understand that being listed as an “additional insured” on a supplier’s product liability policy protects only against product defects, and does not indemnify the shop against claims that the shop failed to follow proper procedure.
Second, he said, “Many areas don’t realize that indemnification is ‘conditional.’” That is, it applies on the condition that the rental shop precisely follows the procedures specified by the supplier. There is general agreement that this past season, many shops did not meet this test.
While there is a general similarity between indemnification programs for bindings and helmets, Logan said, there is also a large exception: the type of risk involved. Bindings involve a greater frequency of claims, with a (relatively) low level of financial exposure. Helmet rentals involve a low frequency of claims—in fact, no major suits have been filed, as far as is generally known—but head injuries are more likely to be severe, with significant financial exposure. This makes shop practices a critical aspect of any helmet indemnification program.
Ultimately, choosing a rental helmet supplier depends on more than the quality of the product itself, Logan suggested. Shops must also determine how well the supplier’s indemnification protocol suits the shop’s rental practices, and how effectively the staff will be trained in those practices. And finally, all employees must follow the practices to the letter.
