Minimizing Potential Liability Regarding Summer Camps

Category: Published Articles
Date: Jul 14, 2014 11:32 AM

The summer season is rapidly approaching and now is a good time for schools to evaluate their summer camp contracts.  Youth summer camps, which are a quintessential summertime tradition for many families, offer students unique opportunities for creative, cultural, athletic, and educational development.  They can also be an important source of revenue for schools.  However, summer camp programs may create unwanted and unnecessary liability if they are not managed properly. 

A school's potential exposure for liability will depend in part on its legal relationship with the camp.  Schools can structure and arrange their relationship with a camp in several ways depending on their risk tolerance level.  Many schools may choose to lease or license a portion of their school site and facilities to a camp provider and have no involvement in any aspect of the camp's operations or management. This sort of arrangement arises, for example, when a private organization that offers swimming lessons to children contracts with a private school to use its swimming pool and related facilities for a certain amount of time during the summer.  This type of relationship poses the least potential liability for a school because the liability is generally limited to premises liability.  Alternatively, schools may choose to actively promote or co-sponsor a camp managed by another organization.  This type of relationship, of course, poses a much greater risk of potential liability to a school because the school assumes a greater share of the duties and responsibilities.  Schools should be aware that there are potential tax implications for a non-profit that receives income from a business (such as camp) that is unrelated to the school.  

Although each contractual arrangement will vary depending on the nature and scope of the particular camp program and activities, schools should be aware of several overarching issues when negotiating summer camp contracts with camp providers.  First, schools should verify and ensure that any camp operator they select has all of the necessary licenses and permits required by local, state and federal regulations.  The camp should also be knowledgeable and experienced in the programs it offers.  The American Camp Association ("ACA") is a nationally recognized camp accreditation association.  The ACA offers helpful information regarding camp management, including recommended staff-to-camper ratio for resident camps, which schools may consider incorporating into their contract terms. 

A school should ensure that any agreement with a camp operator clearly sets forth the rights and obligations of the parties in a signed, written contract.  The contract should use simple, concise and straightforward language that is easy to understand and plainly sets out what the contract requires.  For example, the contract should clearly state whether the school will have operational or management responsibilities for the camp.  Further, the contract should specify any service that the school is expected to provide, such as food or emergency services.  

The more typical license agreement gives the camp permission to use the school's property for the camp.  A license will not transfer an interest in the real property.  A license is also personal to the camp.  This means that the camp cannot assign its rights under the contract to another organization.  All license agreements with a camp should have the following key provisions to minimize the school's potential exposure to liability:

  1. Obligations and Responsibilities of the Parties.  The duties and responsibilities of the camp and the school should be clear and unambiguous.  Schools should avoid using abbreviations and terms that only the contracting parties understand.  In other words, the scope of responsibility for each party should be clear to any party who reads the contract, including a judge.  The responsibilities of the parties can be set forth in an attachment to the contract. 

  2. Term.  The school should consider various factors when deciding on the term of the agreement.  Does the school want to lock in pricing?  Does the school want to include an option to renew the term?  When will camp sessions begin and end?  These factors should be negotiated up front.

  3. Termination Provision.  There are two basic ways that a contract may terminate, depending on the contract language.  Some contracts can only be terminated if one of the parties materially breaches the contract.  This means that the party does not perform one of the material provisions.  Contract language may also provide for a termination for convenience.  This means that a party can terminate the contract without alleging a material breach by the other party.  Termination provisions, whether for or without cause, should include appropriate notice provisions.  A school may want to include language that only allows the camp to terminate the contract between certain dates (so as to avoid a situation where the camp walks away during the middle of summer).  A school should also add terms for the amount the camp will owe the school upon termination, if anything.  For example, if the camp decides to cancel after a certain date, it might be too late for the school to lease the facility to another camp.  The school would lose out on that summer income.  A good termination provision will ensure that the school is made financially whole in the event of a last minute cancellation.

  4. Provisions Governing Camp's Use of Facilities.  The agreement should clearly specify which portions of the school may and may not be occupied by the camp, whether the camp may make modifications to the facilities, install new door locks, move furniture, etc.  It should also specify that the camp is responsible for clean-up and restoration of the school's site.  If the school authorizes the camp to modify the facilities or furnish materials or equipment, the contract should include a requirement that the camp is responsible at its own expense for removing liens and claims for work performed or materials furnished to camp.  The provision should further allow the school to remove the liens and seek recovery from the camp if the camp fails to remove the liens or claims.  

  5. Insurance.  The contract should clearly specify the camp operator's obligation to carry insurance and those insurance requirements.  Schools should always confirm that the camp operator carries the necessary insurance coverage with appropriate limits and necessary endorsements, verify the credentials of the insurance carrier, and be named as an Additional Insured on the camp operator's policy.  The camp operator should carry comprehensive general liability, automobile, directors and officers liability insurance, and workers compensation coverage. 

    When checking coverage limits, determine whether the camp's general liability policy covers more than just premises liability and be sure that there are no exclusions.  The general liability policy should cover the camp's liability for claims that arise from activities sponsored by the camp but conducted on premises that are not owned by the insured.  The common minimum limits for primary general liability for camp operators are $1 million, with $500,000 to $1 million for auto insurance.  The camp should also be required to carry umbrella coverage with minimum limits. 

    The camp operator should provide the school with a Certificate of Insurance with all appropriate endorsements outlining appropriate coverages and amounts and designating the school as an Additional Insured. 

    The contract language should require that all insurance be provided on an occurrence basis and state that the policy is primary, excess, and non-contributing with any other insurance carried by the School.  The contract should also require that the camp's policies waive any right of subrogation the insurer may have against the school.  The school may also require that the camp provides 30 days written notice before the cancellation or reduction of coverage under any policy.

  6. Indemnification.  The contract should include a broad indemnity provision in favor of the school in which camp operators agree to defend, indemnify, and hold harmless the school from any and all accidents, injuries, damages, claims, actions, suits, or liability resulting from use of the school property, participation in the camp program, or otherwise related to camp activities or the agreement.  This means that if a camper sues the school for an injury sustained at camp, the camp will be responsible instead of the school.  Any indemnification provision should also include a requirement that the camp defend against such claims.  This means that the camp will need to pay for an attorney to defend the claims brought by the camper against the school.  It is fairly typical for indemnification provisions to exclude from the camp's responsibilities, the duty to indemnify the school for the school's gross negligence or wilful misconduct. 

  7. Assumption of Risk.  The contract should include terms providing that the camp operator is responsible for informing parents and camp participants of the risks involved in the camp program and to obtain their agreements acknowledging and assuming those risks. 

  8. Screening and Background Checks.  Schools should require camp operators, at their own cost, to complete criminal background checks and fingerprinting on all personnel and staff associated with the camp.  Standards will vary by state but it is critical to ensure that adequate background checks or required fingerprinting and testing have been performed.  For example, in California certain statutes govern fingerprinting and TB testing of school employees who have contact with students.  A school may want to extend certain provisions to its summer camp operators.    

  9. Emergency Procedures.  The contract should include provisions requiring the camp to obtain parental authorizations to provide first aid and parental notification forms in the event of emergencies.

  10. Use of School Name on Camp Literature.  The school should consider a provision limiting the camp's ability to use the school's name or logo on camp literature such that any advertisements for the camp do not imply any sponsorship or control by the school.  It is important to specify in the contract that the school has not sponsored the camp program and that the camp sponsor is not permitted to use the school's name or logo in camp advertising or literature.  Such a provision will also bolster the school's defense for claims arising out of camp activities.  Schools may also require camp sponsors to state that the camp is not affiliated with the school.  For example, the contract could say: "This private camp operated by XYZ, Inc. is not affiliated with or operated by the [Name of School].  The [School] s not responsible for camp activities."

  11. Conditions of Use. The camp operator should agree to adhere to specified school policies and procedures, and acknowledge that the failure to do so may result in termination of the agreement.  The school should reserve the right to terminate the agreement at any time if the camp is any way detrimental to the school.

Needless to say, this is not an exhaustive list, and specific contract terms will vary depending on the circumstances. 

Furthermore, many schools run their own camp programs.  Schools should keep in mind that employment over the summer is just like employment during any other season.  Schools that run their own program need to conduct fingerprint and tuberculosis testing, make sure they have I-9 forms, and meet all other hiring requirements.  Depending on the timing of the summer program there may also be work-permit and other issues that are specific to minors.  Finally, ensuring that employees – whatever their age – are properly classified as exempt or non-exempt is a significant issue all year long!

Schools, and summer camps, sometimes offer positions for unpaid interns.  This area of the law is being increasingly litigated.  Fortunately for schools, most of that litigation is taking place in the context of large for-profit companies and not non-profit independent schools.  Still, schools should be cautious when they offer programs that include unpaid interns.  The Department of Labor offers guidance on this issue and schools should also consult with legal counsel on this matter.

By taking a pro-active approach to summer camp programs, clearly defining the relationship between the school and the camp sponsor in writing, and establishing risk management guidelines through the contractual terms, schools can significantly reduce the potential liabilities associated with summer camp programs on campus.   

Heather DeBlanc and Hengameh Safaei are attorneys in the Los Angeles office of Liebert Cassidy Whitmore. They counsel educational institutions on a variety of legal issues. They are members of the Firm's Independent School and Business and Facilities practice areas and regulator contributors to the Firm's Private School Matters and Business and Facilities Update newsletters.

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