Risk Management

Group 7:
Lori Ramos
June Roel Rojo
Hannah Sardua
Learning Outcomes

1 explain the reasons for 2 describe the basic component of 3 clarify the other clauses or
complying with existing laws and an event management agreement components of an event contract,
regulations; or contract

4 discuss other event management 5 describe the synergistic 6 explain the risk management
agreements; relationship of contracts, permits, procedures; and
and licenses;

7 discuss the risk control measures.

According to Dr. Peter Tarlow, risk management and safety expert, all
events carry two risks: (1) the risk of a negative occurrence both on-site
and off-site and (2) the negative publicity that comes from this negative
occurrence. Whenever people are brought together, there is an element of
risk.

Compliance with Existing Laws and Regulation

1 To protect one's legal interests

2 To abide by ethical practices

3 To ensure the safety and security of the event stakeholders

4 To protect one's financial investment

Protecting One's Legal Interests
Preparing contracts, permits, and licenses that are required and complying with other legal requirements will ensure that the
event may proceed without interruption. Contracts or agreements may range from a simple letter or memorandum of
understanding to complex documents with long riders or attachments.

Adherence to Ethical Practices

One of the requirements of a profession is to follow a code of ethical conduct. Because event management
has emerged as a modern profession, a code of ethics has been developed by the International Special
Events Society (ISES). Several related industry organizations such as the Meeting Professionals
International have similar codes. A code of ethics shows what is standard and customary in both a
profession and a geographic area.
Ensuring the Safety and Security of Event Stakeholders
A safe event environment is one that is protected from future harm. The event manager is responsible for constructing a safe,
secure environment and sustaining it during the course of an event. The event manager should not transfer the responsibility to
others. The event manager has a legal and ethical responsibility to event stakeholders to design and maintain a safe and secure
event environment.
Protecting One's Financial Investment
Practicing thorough legal, ethical, and risk management proactive measures may help the event produce greater revenues.
Lapses in legal, ethical, and risk management judgment may cause not only loss of property, life, and money but also loss of
the event's good name.
Basic Components of an Event Management Agreement
The event management contract shows the agreement between two or more parties regarding their mutual
interests as specified in the agreement. A binding contract must contain the following basic components:
the parties, the offer, consideration, and acceptance.

Parties Offer Consideration Acceptance

The names of the parties must The offer is the service or The consideration clause When both parties accept an
be clearly identified. The product given by one party to defines what one party will offer, they execute or sign the
agreement must be described another. The event manager provide the other upon the agreement confirming that
as being between these may offer consulting services acceptance of an offer. they understand and agree to
parties and the names that are to a client, or a vendor may comply with the terms and
used in the agreement must offer products to an event conditions of the agreement.
be defined. The typical event manager. The offer should list
management agreements are all services that an event
between the event manager professional offers to provide.
and his or her client or Any miscommunication may
between the event manager lead to costly litigation in the
and his or her vendor. future.
Other Components
In addition to the key components, event management agreements usually include other clauses or components.

Terms 1
The terms clause defines how and when the funds will be paid
to the person making the offer. If the event manager offers
consulting services, he or she may request a deposit in the 2 Cancellation
amount of the first and last month's retainer and then require Events are always subject to cancellation. Thus, it is important
that the client submit monthly payments of a certain amount to provide for this contingency legally with a detailed
on a certain date every month. These terms define the financial cancellation clause. The cancellation clause usually defines
conditions under which the agreement is valid. under what circumstances either party may cancel, how
notification must be provided, and what penalties may be
Force Majeure (Act of God) 3 required in the event of cancellation.
In the force majeure clause, both parties agree on which
circumstances, deemed to be beyond their control, will allow
an event to be canceled without penalty to either party. These
occurrences may include hurricanes, earthquakes, floods, 4 Arbitration
volcanic eruptions, tornadoes, wars, famines, or other It is a common practice to include in event management
disasters. agreements an arbitration clause in place of a legal judgment
Billing 5 when both parties fail to agree The use of arbitration may save
both parties substantial costs over traditional litigation.
Because many events involve entertainers, the agreement must
define how entertainers will be listed in advertising and in the
program.
Additional Contract Clauses
Time is of the Essence
6 The time-is-of-the-essence clause instructs both parties that the agreement is valid only if it is signed within a prescribed period of time. This clause is usually
inserted to protect the person making the offer from loss of income due to late execution by the buyer.

Assignment
7 Agreements should contain clauses indicating that the contract may not be assigned to other parties. For example, if Mary Santos has executed the agreement on
behalf of XYZ Company, the agreement may not be transferred to Santos's successor if Mary Santos leaves the XYZ Company.

Insurance
8
Agreements usually detail the type and limits of insurance that must be in force by both parties as well as a requirement that each party co-insure the other.

Hold Harmless and Indemnification

9
In the event of negligence by either party, the negligent party agrees to hold the other party harmless and to defend (indemnify) them against harm.

Reputation
10
Some event managers include a specific clause that recognizes the importance of the purchaser's reputation and states that the event manager will exert his or her
best efforts to protect the purchaser's reputation during the event.

The Complete Agreement

11
The complete agreement is the final clause which states that the agreement constitutes the full understanding of both parties.
Other Agreements
There are other management agreements aside from the main event agreement. These are:
Hotel contract Non-compete
an agreement
agreement
Exhibitors between the hotel an agreement in Purchase order
contract and the which an an order to a
Employment an agreement organization employee agrees Sponsorship
seller to supply
agreement between the holding an event not to engage in a products or agreement
an agreement in exhibitors and to furnish rooms, contract in a services. an agreement
which an the sponsor of an function space, particular between a
employee agrees exhibit to rent a and food and industry for a sponsor and an
to particular booth at the beverages certain period of event organizer
Consulting terms of exhibit. services for a time after the Vendor
in which the agreement
agreement employment. particular event conclusion of event organizer
an agreement in or several events. employment. agrees to give an agreement
which one party. marketing between the
usually the event services to the seller and the
manager, agrees sponsor for event manager to
to give specific payment. supply particular
consulting
4 5 services or
services to 3 6 products for an
another party. event
2 7

1 8
Permits and Licenses

Synergistic Relationship
Meaning of Licenses
The event manager must comprehend the
Meaning of Permits
A license is issued by a government agency importance of contracts, permits, and licenses
Permits are issued by local governments. or by a private association It allows the event in organizing modern events. Contract
They allow the event manager to hold event manager to hold a particular activity. There is permits and licenses have legal, ethical, and
activities. A permit is issued only after the a slight difference between a permit and a risk management effects. To produce positive
necessary documents have been submitted license. There are strict requirements for results, event managers should cooperate with
and the necessary payment has been made. obtaining a license than those required for the concerned agencies.
obtaining a permit. Permits and licenses must
be acquired for several events. The bigger the
event, the more permits and licenses must be
acquired.
Risk Management Procedures
When people gather together for celebration, reunion, and business or education purposes, there is a corresponding risk of losing life or
property. Several accidents have happened at events. The effects of these disastrous happenings are increased expense, loss of money, and loss
of business. Experts in risk management have established basic rules to manage risks during events. These are:

Distribute the risk

obtaining various sources of revenue for an event including many sponsors can reduce the risk
1 of failure to generate the needed revenue.

Devise backups and alternatives

2 alternative plans should be ready to be put into place.

Transfer the risk

for risks that cannot be avoided and for which the event manager should not be held
3 liable, the event manager should review and check whether they are the
responsibility of someone else, as in the case of a delegate slipping on a wet floor in
the restroom. Suppliers in events are required to share in the liability for the event.

Avoid or diminish the risk

4 each circumstance should be assessed for possible risks. These risks
should be determined and avoided.
Risk Control Measures
The following are the risk control measures:

Elimination plans 1
for example, removal of dangerous children's equipment.
2 Substitution plans
for example, replacing slippery tiles in the restroom with non-
slippery tiles.

Isolation plans 3
for example, isolating dangerous or noisy equipment.
4 Engineering controls
for example, using fences to prevent access to busy roads

Administrative controls 5
for example, using warning signs, trained staff, and well-
developed procedures
6 Contingency plans
for example, evacuation as a contingency plan in case the risk
cannot be completely avoided
THANK YOU!!!