Ski industry controls risk even as snowboarders invade the slopes

For skiing and snowboarding enthusiasts, winter can’t arrive fast enough as they yearn for perfect days of glistening trails, moguls and jumps, and the occasional dumping of fresh powder. Even better news than the arrival of winter though is that for the recreational sport of skiing and the resorts that provide the fun, the number of serious injuries is low and relatively stable.

“Approximately 38 people were killed last year in skiing accidents. With 58 million people on the slopes, your risk of a fatal mishap is about one in a million,” said Tim White, director of education for the National Ski Areas Association. “More people die on average from lightning strikes than on ski slopes.”

White said the greatest risk is on the mechanism that transports skiers to the top of the hill. “Our biggest exposure is our lift operations, which skiers take to the tops of mountains high up in the air. Again, the track record is remarkably good, and it is rare for a lift to break down or to have accidents with people aboard,” he said.

The last major fatal accident nationwide occurred approximately five years ago at Vail Ski Resort, when several people were killed in a lift accident, White recalled.

Organizations born in ’60s

In the early 1960s, the skiing industry took steps to create standards that have helped prevent injuries and fatalities, and have aided insurance writers in underwriting. NSAA, which represents 326 alpine resorts that account for more than 90 percent of the skier/snowboarder visits nationwide, was born with the goal of tracking national statistics, studies and standards. It also has 400 supplier members providing equipment, goods and services to the mountain resort industry.

The industry also established the ANSI-B77, which creates standards for manufacturers of skiing equipment such as bindings, boots and poles. “We want to keep everyone, including the Baby Boomers, skiing. Better and safer equipment is the way to accomplish that,” White said.

Insurance carriers welcomed the creation of standards and NSAA. “With the establishment of these standards for equipment and a national association tracking the industry, a real stability was reached … that allowed insurance underwriters to be able to more effectively assess risks and create programs,” said Brian Derouin, manager for the Resort and Recreation Division of Acordia Insurance.

There are four other insurance writers in the tight-knit competitive group: Willis, K&K and Tennant Risk Services/CNA E&S.

Though injuries are low, few insurers write ski programs because “there has to be an expensive investment in people to write,” Derouin said. “You need specialized claims people, staff to monitor the standard organizations and others to watchdog state laws.”

Snowballing changes

Meanwhile, the sport and industry continue to evolve. One of the biggest changes has been the boom in snowboarding. According to the Acordia’s Derouin, 50 percent of people going to ski resorts these days are snowboarders. Many resorts are adding new runs such as “all terrain” areas for them. Those new runs don’t actually create new risks and injuries, Derouin maintained.

“Snowboarders don’t get injured more — just in different areas of their bodies … Snowboarders tend to have more upper-body injuries, shoulder, chest and wrist, while skiers will have more ankle and leg injuries,” Derouin said. “Snowboarders feet are locked in place so when they fall, they land in a different way.”

The economics of the industry are also changing. According to Frank Freeman, senior vice president and team leader for Willis Group, Utah, “the biggest changes in the ski business over the past several years include consolidation of resort ownership and expansion of year-round operations.”

Many ski resorts are open year-round and have indoor water parks, music festivals, golf and horseback riding, as well wedding and banquet facilities, Freman noted. Some resorts purchase an additional policy for some of the activities in the “snowless” seasons.

Coverage options

Generally insurers offer liability, property, workers’ compensation, crime and auto coverages. In the mid-1980s, during the commercial liability crunch, some ski resorts looked at alternative solutions, such as offshore captives.

Snow Summit Ski Corp. in California went offshore in 1987, accoording to Jan Evans, corporate risk manager. “We found that handling the first occurrence at $1 million and the $1 million aggregate worked for us,” she said. “It’s a way of funding your retention like a trust fund.” She added that Snow Summit has purchased coverage from an admitted company since the early ’90s.

For its three California resorts, Snow Summit handles its own losses up to its $1 million limit before going to the excess insurer, Lexington Insurance. The largest claim has been approximately $600,000. In the meantime, Snow Summit pays the premiums each month to itself and thereby builds up the fund to handle its own claims and court costs.

“Our insurer likes the way we handle claims, and we like the advantage and the control it gives us in claims handling process,” she said.

Evans added that the court climate seems to change all the time and concern over litigation c grows each year, she said.

Ski & Snowboard vs. Swim Risks

Skiing/snowboarding

45: 2004 number of fatalities

12.2: Number of participants (in millions)

3.69: Fatalities per million participants

56.9: Days of participation (in millions)

0.79: Fatalities per days of participation rate (per million)

Swimming

2,900: 2004 number of fatalities
(Drowning: Includes drownings of person swimming or playing in water, or falling into water, except on home premises or at work. Excludes drownings involving boats, which are in water transportation)

53.4: 2004 Number of participants (in millions)

54.3: Fatalities per million participants