Renting, loaning or subleasing your theatre facility to outsiders has always been of interest to most theatre groups because it represents an opportunity to generate much needed extra income.

However, when you rent your facility to others, you are exposing your organization to a significant risk against which you need to protect yourself.

I talked about this issue before[see Spotlight, March, 1996 - “Where’s the Harm in That”]but I continue to get numerous phone calls so the message bears repeating.

If someone else rents/uses your theatre and someone is injured or property is damaged as a result of this renter’s negligence, your theatre group can very easily be brought into the subsequent claim/lawsuit unless you take steps to insulate yourself.

Every time your rent/loan/sublease your theatre to others:

· Require the renter to provide their own general liability insurance of at least $1,000,000.  This may seem high, but every AACT member who rents an auditorium from a school district or municipality can tell you that they are required to have at least this much liability insurance.

· Require the renter’s insurance to provide a Certificate of Insurance that names your theatre group as an Additional Insured.

· Do not let the renter occupy your theatre facility until you have this Certificate of Insurance in your possession.

More times then I can count, theatre groups call and tell me that they fully understand and appreciate the necessity of  these insurance requirements.  In the very next sentence, they tell me that they mostly rent to very small groups or individuals who do not have this kind of insurance and if they require this level of insurance protection, these small groups simply cannot afford to rent their theatre.

I serve on the Board of Trustees of my local community theatre and I can certainly empathize with your dilemma, but my advice still stands.

You can certainly choose to ignore this advice but an injured person or their lawyer is going to go after whoever has the money.  If the renter does not have insurance, then they are going to come after your theatre group.  Depending on your insurance coverage, your policy may pay such claims in which case the “loss” is recorded against your theatre group.  Such losses can affect what you pay for your insurance.  Too many such losses can result in cancellation of your insurance.  Or, your insurance may not cover such losses at all, in which case your group is left with paying all attorney fees and whatever settlement ultimately results.

You can rent your theatre to others or not.  You can protect your group or expose it to serious risk.  My advice is to rent only when there is no option to sue.

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