Like any venture of a struggling business, a key factor impacting Hollister’s on-again, off-again, Independence Day motorcycle rally is the balance between the potential upside gain versus the potential downside risk.
It is unfortunate, but the cold truth is that in the immediate and foreseeable future the downside risks of the motorcycle rally, primarily uninsured financial liability, are overwhelming when compared to the gains. Therefore, my heart has to let the rally go and so should the City Council.
On the upside is my personal enjoyment of loud, fast machines and the rock-and-roll that goes with them; a salute to the deserving lawful, joyful, riders – many of whom are fellow veterans; some moderate direct financial gain for the city (perhaps $90,000) and an unmeasurable, but real, indirect gain as an event and as a destination.
On the downside is a load of financial risk, primarily uninsured risk to the city’s General Fund to cover any injuries or illness to outside agency public safety personnel or members of the public all of whom may be impacted by accidents and/or criminal incidents. Those risks are always unpredictable, but worst of all from a public policy perspective, without insurance coverage they are uncapped.
The situation is this – when we hire outside public safety personnel, the legal requirement is that we contract with their parent agency and those agencies cannot or will not provide worker’s compensation or liability coverage for that work. Neither can Hollister add these personnel to its Worker’s Comp roles because they are not employees nor are they independent contractors so they are not covering themselves – if they were we could not afford them. Finally, our liability insurance will not cover this risk based on the current litigious atmosphere related to policing and events; therefore, all potential liability goes directly to the General Fund.
No insurance company will cover the risk at an affordable premium, which should tell us something right there. Additionally, although major incidents are rare, minor and medium incidents are common and still expensive; even a heavy police presence may not deter a major incident as demonstrated by criminal motorcycle gang shootings in Nevada and Texas; we had a rally-related shooting in 2015 at significant cost. Yes, the small number of bad folks can ruin it for everyone.
Our downside potential from injuries to outside public safety personnel or rally attendees starts at the first dollar and has no limit. City employees are insured and protected, but they are the only ones.Â
Public safety personnel also have some special protections when it comes to injury and illness. California Labor Code 4850 allows injured or ill police officers and firefighters to take up to a year off from work, with full pay. In California, as in 41 other states, some injuries and illnesses are legally presumed to be job-related for police including pneumonia, heart trouble and hernias.
A single million-dollar claim, not much considering the costs of some injuries and long-term disabilities, would wipe out more than 10 years’ worth of rally income.Â
This is the equivalent of driving to work without liability insurance. You’re probably not going to need it and you’re betting the farm that you won’t; if you don’t have a farm you’re judgement-proof. The residents of Hollister have a farm, a nice farm; they should not bet it against the uninsured rally. The upside gain is simply not worth the downside risk.