Spring is here.

Spring is here in the Rockies. You can always tell; there are only a couple of ski areas still open and the first motor home of the season is slowly grinding its way up the mountains. At this time the marketing of the winter starts to turn into equipment cleaning and employee training for the summer. Spring is also the time when decisions start to be made.

The decisions involve how your summer recreation business is going to operate for the season. Those decisions always involve a balancing: cost versus benefit. Many times those decisions have an impact or are impacted by risk management and insurance issues. In those situations, your attorney and insurance company can provide you with advice, although only your attorney’s advice is going to be conflict free.

As a lawyer, it is my job to provide you with information from purely a legal position so you can make those decisions. It is not my job or any attorney’s job, to make those decisions for you. The information an attorney provides to his client is always at one end of the operational spectrum; the perfect, no lawsuit end. An attorney can’t give you answers that would put you in a position where you may be sued. We can only give you the best advice we have. You can ask about any middle ground, we will answer your questions if possible and direct you back to safe, lawsuit free side of the balance.

An attorney can tell you his or her best guess on what would happen if you did not operate at the highest level of operations. However, that is scary for an attorney. Yet, we know that you must balance that decision between no lawsuits and a profitable operation. Sometimes, you must run your business knowing that someone may be injured and someone make file a claim.

At that point you must always make 3 steps in your risk management process. (1) You must deal with any accident appropriately. (2) You must follow your risk management plan. (3) And you must hope your release and/or other documentation will keep the incident from becoming a problem.

There are three areas that are always at issue for every business that each has an effect on risk management.

Employee Training: All too often employee training is cut back or eliminated in an effort to save money. It costs money to train employees; it costs more money to have employees not making you money. However employee training is critical in all aspects of your business. Well trained employees are less likely to develop or create a risk management problem. Well trained employees handle problems better and with less friction if a problem does arise. Well trained employees require less management, and well trained employees look good in accident reports and you look better if they are on the witness stand.

Equipment Maintenance: There is nothing worse than having equipment fail, except having the failure be the cause of an accident. Equipment maintenance is must do on your spring checklist. Start with equipment that would be termed safety equipment. Lifejackets, climbing ropes, harnesses, tack, helmets and any other equipment that would be classified by someone as necessary for the safety of the activity. There is no defense to a claim that you allowed guests to participate in your program with unsafe equipment that is required to keep the guests safe. Follow up with each piece of equipment. It might be a great time to create an equipment maintenance plan to track equipment, equipment failure, repair and replacement.

Vehicles: Automobile claims and the ensuing claims check are part of US society. I worked for an insurance company who automatically mailed anyone in an accident $500 if they said they were “shook up.” Combine that with the state and federal laws dealing with transporting people and a vehicle that does not meet safety requirements is a big check waiting to be mailed. Make sure the vehicle not only runs, but stops, and meets all state and federal (if necessary) safety requirements. Take this opportunity to clean your vehicles. Customers appreciate a clean ride to and from the activity. Here again, this may be the time to develop a vehicle maintenance plan in conjunction with a professional to track equipment, equipment failure, repair and replacement.

There are thousands of ways to spend your money and you are constantly balancing how that money is spent. In the past there was a tendency to rely on insurance to balance the safety end of the business and risk management plan; accident occurs call the claims number. However as shown by the last 2 years, insurance premiums can skyrocket, even if claims do not, and worse insurance policies can just disappear from the marketplace. For several industries the last 24 months was not one of paying more for insurance but desperately trying to find any insurance policy. The cost of an insurance policy is affected by dozens of factors, your claims history is one of those factors, the more that you can do to keep your claims from happening and from becoming a check will help to keep those costs from rising quickly.

Your insurance budget used to be large, but not the 2000 pound eating machine it has recently become. That balancing act now requires a larger commitment to spending more money to try and keep the eating machine from eating more, blowing your budget past the breaking point.

These decisions cannot be made by your attorney. Those decisions are made in consultation with your attorney to make the decisions based on all of the factors for your business. Your attorney does understand those issues and hates giving you advice that requires you to walk a thin or gray line between profitability and bankruptcy, but that is your attorney’s job. Your job is to take the information and based on your parameters and your budget to use it as best you can.

Have a great season.