Golf courses and country clubs have several significant exposures, according to Bob Battaglia, product manager at Philadelphia Insurance Companies. “Most facilities have large buildings, which along with the golf course grounds and outdoor equipment are exposed to damage from natural perils, be it wind, hail, fire, flooding, or lightning. Another exposure is vandalism that can result in damage to the golf course, buildings, and equipment. On the liability side, players and others may be injured when a golf cart overturns.”

Michael C. DeMarco, executive vice president, Preferred Club Program at Venture Programs, Inc., agrees and adds loss of revenue on the property side as well as liquor liability, food-related illnesses, drownings, and abuse and molestation as liability exposures that can also adversely impact a club’s operations if not properly controlled.

According to Joseph J. Dolce, executive vice president, national accounts at Venture Programs, Inc., other important liability concerns are “PGA/LPGA events and the liability that comes along with multiple vendors/contractors who take part in preparing the course, along with tens of thousands of people on the course during the event.”

Public and private courses' exposures are similar but there are distinct differences. Mr. Dolce says, “One major difference is that with private clubs there is less of a tendency for members to want to bring a claim against the club because they are part of the community. At public courses, the clientele may have less of an affinity toward the club and may be more likely to bring a claim or suit. In addition, the number of rounds played at private clubs tends to be far lower than at a public course and this reduces the probability of golf-related claims.”

Mr. Battaglia says, “Private clubs generally have more control over their exposures. They do a better job of making sure that the facility is secure and that the premises are well maintained and esthetically pleasing.”

However, Mr. DeMarco points out that private clubs may have exposures that public courses do not. He says, “There is more of a need for directors and officers/EPLI coverage to protect both the club and its board members. In addition, private clubs tend to have more PGA/LPGA events at their facilities."

Severity is Mr. Battalglia’s primary concern. “Golf courses are large properties subject to a variety of natural perils, and that’s where catastrophic loss can come into play. The club building's construction is a factor. Lightning can also be a significant cause of property damage and injury. It can strike trees and people as well as underground sprinkler systems and other structures.. Ideally, there should be audible alarms to warn players of danger and direct them to safety.”

Mr. DeMarco says that, in the past year, “The greatest frequency/severity of loss experienced from a property perspective this year would be weather related claims throughout the entire country.”

“Slips and falls continue to be the most frequent cause of loss from a GL perspective,” says Mr. Dolce. “Severity is always present in liquor-related deaths/accidents or drowning.” He adds that abuse and molestation claims are also significant exposures, especially when the background checks on persons who work with children are inadequate.

All of our experts agree that loss runs are a primary underwriting tool for golf clubs and courses. Another key consideration is the quality and commitment of the management to safety. Construction, course design and protection class are very important factors. Mr. Battaglia says that another key consideration is golf cart storage, especially if the carts are gas powered. He prefers that they be stored in a separate building. If they are stored in the main building, he believes there should be a firewall between the storage area and the rest of the building.

Coverage is normally provided on a package basis. Most markets that provide this coverage offer coverage for the greens, tees, and most standard golf course property and inland marine exposures. In addition, they cover the liability exposures as well as the various amenities, such as pools, tennis courts, restaurants, and pro shops. Liquor liability, special events, pollution, and premises environmental liability coverage is also available. Directors and officers and umbrella coverage is needed to complete most private courses' insurance programs.

Our experts could not offer specific exclusions for agents to avoid, but they all recommended that coverage specific to golf courses be purchased. Mr. DeMarco explains, “Each golf course has its own hot button. In recognition of this, it is critical that the agent or broker understand the client’s needs, make them clear throughout the submission process, and properly address them during the underwriting phase.”

Mr. Dolce points out that there are differences among the many golf course programs available. He states that Venture Programs’ Preferred Club Program offers coverage for the peril of weight of ice or snow for trees and courses. It also offers coverage for property damage due to flood/water on the course itself.

Pricing continues to be fairly soft. Mr. Battaglia says, “Indications are that a number of carriers are concerned with their 2010 results especially on the property side , but that doesn’t seem to be affecting the market at this point.."

The recession has had a significant impact on golf courses. According to Mr. Battaglia, “Some clubs have been sold or were acquired by golf club management companies. We have also seen some bankruptcies.   It is likely that there were too many clubs even in the good times, so the demand wasn’t there which placed a strain on revenue. . The recession simply exacerbated the problem.”

Mr. Dolce says, “We continue to see courses going out of business, but far less than at this time a year ago. We see clubs choosing to use the services and expertise of golf management firms to run their operations before deciding to close or sell them. The idea here is that, through economies of scale, the golf management firm can run the operations more efficiently and return the course to profitability by using the firm’s national vendor relationships.”

Other initiatives are being undertaken to keep clubs operating. Mr. DeMarco says, “Long-time private courses are opening their doors to the public in an effort to increase the number of rounds played. We also hear about creative marketing efforts/incentive being offered to guests to entice them to play at a particular course more often.”

Successful entrepreneurs in the golf industry are responding to the recession like successful entrepreneurs in every industry. They are cutting expenses where appropriate and making their operations more attractive to their existing clients while seeking out new ones.

Could writing golf courses provide a new client base for your agency? Mr. Dolce offers the following advice: “It is impossible for an agent or broker who is handling a club for the first time to know all of the exposures and coverages. That is why it is critical for agents and brokers to choose their partners wisely when it comes to placing coverage on their client’s behalf.”