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Elvis' suit hasn't left the building

Elvis' suit hasn't left the building

Updating a property schedule for Harrah's Entertainment Inc. uncovered some interesting finds for the risk management department, including an Elvis Presley jumpsuit hanging in a Las Vegas casino closet.

Other items discovered included a John Lee Hooker guitar, boxing equipment donated to the casino by Joe Louis and Muhammad Ali, John McEnroe tennis rackets, as well a nine-hole golf course in Iowa and a church on racetrack grounds in Louisiana, said Angela Miller, insurance services manager for Harrah's.

Performers and athletes often donate their musical instruments or sports equipment in appreciation for the casino's hospitality, Ms. Miller said. Local casino managers store the items, but might not notify Harrah's risk management department.

To help protect itself, Harrah's property policies contain a clause covering unknown values under $25 million, Ms. Miller says. Some of the property insurers include Boston-based Lexington Insurance Co., a unit of American International Group Inc.; Zurich Financial Services Group in Schaumburg, Ill.; and Philadelphia-based ACE USA, a division of ACE Ltd.

"That allows Lance to sleep a little better at night," said Lance J. Ewing, Harrah's vp of risk management.

Harrah's size, along with its ongoing purchases of other companies, and its local managers' business expansion projects, can lead to the acquisition of properties the risk management department may not be notified of, Mr. Ewing said.

Or, local business unit managers notify the risk management department about their acquisitions or expansions, but they might do so after launching into the project, which could leave them wondering if insurance coverage is available.

The short notice can be frustrating, Mr. Ewing admitted. But quickly arranging insurance, implementing risk control measures or fitting their projects into an enterprise risk management strategy is also exhilarating, he added.

"Those are the steroids that keep us juiced up," Mr. Ewing said of performing under deadlines. "Those are the kinds of things that get the blood rushing."

The requests also provide his risk management department an opportunity to show the business units how they can help them under challenging conditions.

"You don't need a great captain and crew when the sea is calm," Mr. Ewing said.

Keeping property schedules current also brings forth similar opportunities for the risk management department, Mr. Ewing said. The insurance services managers are responsible for updating the property schedule and to do so, they must tour Harrah's properties to see the company's casinos first hand.

Should they need to address a future loss, knowing the locations will help them visualize the damage and understand how it would impact Harrah's employees. After all, Harrah's casino in Reno, Nev., is very different from its casino in St. Louis, Mr. Ewing said.

"It's very difficult to provide risk management from behind a desk in an office," Mr. Ewing said. "My approach to risk management has always been you have to go out and see, touch, feel, and live and breathe what (they) are going through."

Additionally, Marc Kamler, manager, insurance and risk services for Harrah's, noted that after the 2005 hurricane season, insurers are more likely to decline coverage for values not included on a property schedule.

With that in mind, and after the merger of Harrah's and Caesars Entertainment Inc. properties in June 2005, Mr. Kamler and Ms. Miller set out to update Harrah's property schedule.

At Harrah's Louisiana Downs Casino & Racetrack in Bossier City, La., they found a small church used by race jockeys, which wasn't listed in Harrah's statement of values.

"That was a little bit of a surprise," Mr. Kamler said.

Because the church's limited size, Mr. Kamler assigned a value to it and added it as a "miscellaneous location" on Harrah's property schedule.

Another surprise came when Mr. Kamler stood on a raised hotel patio deck in Council Bluffs, Iowa. That's when he discovered the nine-hole golf course.

The surprises encountered while protecting Harrah's casinos from potential losses don't end with discoveries during searches for property that hasn't yet made it onto an insurance statement of values.

Fielding telephone inquiries regarding coverage for potential casino risks also adds interest to her work day, Ms. Miller said. One recent caller asked whether Harrah's had coverage for a $1 million, diamond-studded microphone that singer Toni Braxton planned to perform with and then display at the casino in Las Vegas.

Ms. Braxton's own insurance should respond to a loss, Ms. Miller said, but as a risk manager she also wanted to know about security precautions for the microphone.

A telephone call from an employee moving the John Lee Hooker guitar from a casino to a warehouse tipped her off to the guitar's existence, Mr. Miller says.

A security director showed her the Elvis jumpsuit and boots during a visit to Caesars Palace in Las Vegas, Ms. Miller said. It was stored in a locked closet behind a casino security office. Ms. Miller said she was skeptical of their authenticity, but an appraiser accompanying her on the property tour confirmed they belonged to The King.

"We had the boots, we had the jumpsuit, and we didn't know we had it," Ms. Miller said. "Elvis' jumpsuit, that was pretty interesting."

A walk through a warehouse with the appraiser also revealed boxes of memorabilia, including the Joe Louis and Muhammad Ali boxing equipment. There were also the John McEnroe tennis rackets.

"We need to know about that stuff because we have to make sure the contents of that warehouse are valued appropriately" for insurance purchasing purposes, Ms. Miller said. "It's not just slot machines, that Harrah's owns. We have some really high-value memorabilia."