Golfers take to the greens to have fun, enjoy the outdoors, be challenged, bond with friends, network with colleagues and seek refuge from daily stresses. The sport is so popular, in fact, that there are nearly 8,800 golf courses and country club businesses in the US,1 and about 25.6 million Americans played the sport on a golf course in 2022.2

While public golf courses are open to anyone, private facilities are membership based and offer numerous amenities such as a driving range, clubhouse, pro shop, health center and dining facilities. Some private clubs also allow members to rent their facilities for private events such as weddings, bridal showers, holiday-themed parties and other celebrations. In addition, some clubs have day camps that offer golf, swimming and tennis lessons. With all of those variables, it's important to ensure proper insurance coverages are in place.

Indoor and Outdoor Property Risks for Golf and Country Clubs

With extensive properties and many activities taking place at golf and country clubs, combined with an influx of constant foot traffic, risks are widespread, explains Peter Small, area senior vice president at RPS Bollinger Sports & Leisure.

"Outdoor property includes tees, greens and fairways that can be damaged by felled trees after a big storm," says Small. "In fact, damage to outdoor property is the number-one claim we see. A winter storm, for example, could easily knock down 20 to 30 trees and damage several portions of a golf course. Those trees have to be removed and the greens and fairways rebuilt."

There's also property damage to structures to consider — from storm damage to fire and other hazards. In 2022, the historic Oakland Hills Country Club in Detroit burned to the ground, causing more than $80 million in damages. Construction work being performed on one side of the building caused the fire — workers used a propane torch to install rubberized flashing, and smoke began coming out from the wall. The fire spread between the walls, with flames ripping through the roof at the multi-story clubhouse.

"Often, these clubs are wood frame and burn very quickly," says Small. "In addition, while the contractor is responsible for the fire and will pay a portion of the claim assuming the right contractual agreements are in place, generally speaking, the golf club's insurance carrier will ultimately also pay due to the extent of the loss."

In addition to scrutinizing third-party contracts, Small emphasizes the importance of golf and country clubs making sure buildings are insured to value.

"Ensure appraisals are up to date to determine the actual replacement cost value to rebuild and avoid under-insurance," says Small. "Also, many clubs were built 60, 70 and even 80 or more years ago, so even with updates and renovations made over the years, be sure to take into account the increased cost of construction to meet current building codes."

Small also warns that clients shouldn't rely on blanket limits on their Property policy to be sufficient coverage for a loss.

"While the clubhouse building value typically represents the lion's share of the club's property values, if the building is under-insured even by 10 to 15%, there may not be any blanket limits left to tap into should there be a complete loss. In addition, if more than one building is impacted or destroyed by the same event, the blanket limit can be exhausted quickly."

Liability Exposures All Around for Golf and Country Clubs

High foot traffic at private and public courses brings the potential for slips and falls outside, in the lobby, pro shop, restaurant, event space and other areas.

"For example, one claim involved a woman attending a golf club wedding. She missed a step while heading to the restroom, fell and broke her nose. The club was found negligent and paid several hundred thousand dollars to cover medical costs, lost wages and mental anguish," Small explains.

Clubs that serve alcohol also face liquor liability exposures.

"If someone is overserved at the club's restaurant or bar, drives and causes an accident in which someone is injured or even worse, the club will be brought into that suit or claim," says Small. "There was one claim where a member and his two guests had a couple of drinks while on the course, followed by a couple more at the bar after playing 18 holes. They weren't visibly intoxicated when they left the club. The threesome went to another establishment where they had a couple of more drinks and later in the evening were in a motor vehicle accident that resulted in a death. The club was brought into a $6 million lawsuit along with other parties."

Other liability exposures include sexual molestation, professional liability, automobile, pollution, directors and officers, and employment practices exposures.

"Some private clubs have summer camps for members' children, opening them to the potential for allegations of sexual molestation. Golf and tennis pros have a professional liability exposure if someone gets injured while in their care," says Small.

On the pollution liability side, every club uses herbicides to keep the weeds out and greens fresh. However, overuse of these pesticides can accidentally pollute the water if a small creek or river runs through the golf course. The pesticides can also contaminate the drinking water in local neighborhoods.

"Many clubs also have underground storage tanks for diesel and gasoline to power their machinery. If there's a leak, they can have serious pollution liability exposures," explains Small.

The Golf and Country Club Insurance Market

As with any business, golf courses and country clubs face multiple exposures, and RPS has a tailored-made program for this niche market.

"For 30 years, we've been providing a complete package of insurance coverages for golf courses and country clubs," says Small.

"Today's market is challenging, with higher Property, Umbrella and Commercial Auto rates. In addition, the market is shrinking in this niche. Whereas you once had six or seven carriers specializing in golf and country clubs, there are now only three or four. Our experience and 23-year relationship with our carrier partner provide stability in a difficult market."

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