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Staff must balance the risks of entertainment

Staff must balance the risks of entertainment

Risk and fun require a daily balancing act at the numerous casinos and hotels owned by Harrah's Entertainment Inc.

For every rock band's stage effects, performers shooting arrows across a stage or acrobats hanging over crowds of patrons, Harrah's risk management department has weighed the risks, said Scott M. Lee, risk administration manager for the company in Las Vegas.

Mr. Lee said his first task in discovering potential liability when considering new acts requires asking plenty of questions about their planned performances.

"If we have a group of acrobats and we find out they dangle from the ceiling from silk ropes we have to understand the specifics of the venue and how the patron area is going to be set up," Mr. Lee said. "Will these people, for example, be hanging on top of our patrons where it's a possibility they could fall?"

Mr. Lee must also determine whether the risks can be mitigated and whether the liability insurance the entertainers have purchased is adequate to protect them and Harrah's should something go wrong.

A rock band may have $2 million in liability limits, but that may not be enough if they plan, for example, to have pyrotechnics accompany their performance in a building with a total insured value closer to $1 billion. Or their insurance contract may exclude the special effects they plan to perform.

The risk management department's job is not to say no, however. It looks for ways to mitigate or transfer the risk so the show can go on. Sometimes speaking with a band's financial advisers will convince them to purchase more insurance. Ultimately, though, Harrah's shoulders some of the risk in providing entertainment.

They may never have worked with a professional risk management department before and don't know of the shortcomings in their insurance contracts, Mr. Lee said.

The risk management department understands that Harrah's is in the service business and attracting patrons requires new and exciting acts and sometimes a little calculated risk, Mr. Lee said.

"If you had a big-name celebrity that wanted to do a crazy stunt at your property, you have to balance whether or not the risk of them injuring themselves or someone else is to the benefit of the public relations we are going to get, the revenue we are going to get," Mr. Lee said. "Is it worth taking the risk? It's something we (consider) on a daily basis."