A golfer shouting “fore!” is a warning to others that trouble could be on its way – usually an errant ball headed in the wrong direction. For an agency looking to procure coverage for a golf course, there are several warning signs and red flags to look “fore” prior to placing these risks.
There are roughly 35,000 golf courses in the world, 45% of which are in the U.S., with Florida having more than any other state. E&O experience tells us that both Mother Nature and mankind can wreak havoc on these expensive pieces of real estate, which are often underinsured. For an insurance agent, knowing the various types of exposures that require insurance and to what limit can help minimize or even avoid E&O claims.
Damage to golf courses can be caused by flood, hail, ice, wind and even vandalism. Even so, an agent who is experienced in the placement of golf course coverage – something not many can say — may wonder, ‘How much can it cost to replace a few trees and replant some grass?’ The answer, it turns out, is ‘quite a lot’. Recent hurricanes along the Gulf Coast as well as heavy flooding in the Northeast have caused extensive damage to entire golf courses, properties that average 75 acres, with some up to double that size. On that scale, the loss of trees, shrubs, grasses, sand in sand traps and landscaping can amount to millions of dollars in replacement costs – plus debris removal — after a severe flood or storm.
An agent ought to know the specifics of each golf course. Are the trees large and established or young and easily replaceable? What is the value of the shrubbery and landscaping? What grass types are there in the fairways, rough and greens? Is the sand in the traps from a local supplier or is it an expensive, imported ‘high-angular’ product? What type of irrigation system is in place or not in place? Knowing the make-up and value of the course is a must. In addition, knowing the climate, weather patterns and geographic location is essential in properly assessing exposure. Is the course in a coastal area? A flood plain? An earthquake region?
Some carriers specialize in coverage for golf courses (private, public and semi-public,) country clubs and resorts. For the course itself, “Tee-to-Green Coverage” insures tee boxes, fairways, greens and other golf course property, including sprinkler systems, ball washers, signage, benches, cart paths, fountains, etc.
Structures including clubhouses, golf cart sheds, restaurants, lounges, pro shops, and other amenities present their own set of exposures: Commercial Property, Commercial General Liability, Liquor Liability, Auto, Crime and Inland Marine (golf carts, mowers, etc.) Golf course insurance packages can include these coverages as well as coverage for Directors & Officers liability, Business Income Loss, Employment Practices Liability Insurance, and Pollution coverage (arising from the runoff, etc., of the use of pesticide and herbicides).
The need for stand-alone flood and (where appropriate) wind policies should be evaluated and discussed in detail with the proprietor. Exploring umbrella and excess flood coverages is very important, as well. In fact, special attention should be paid by an agent in the assessment of potential exposure for each of these risks.
And yet, it is not uncommon for golf course policies to have just a $1 million limit, which would be woefully inadequate to cover damage sustained as the result of a massive natural event or catastrophic injury to a patron. Good luck finding a club to get you out of that sand trap.
This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice.
About the author
Julie Carter is an assistant vice president, claims specialist with Swiss Re Corporate Solutions and works out of the office in Kansas City, Missouri. Insurance products underwritten by Westport Insurance Corporation, Kansas City, Missouri, a member of Swiss Re Corporate Solutions.