Event Insurance:
Events are a huge platform for businesses to network. Whether it’s trade shows, meetings, conventions, conferences, or community events, hosting a private event exposes your business to numerous risks. However, a small accident can cause months of planning to go to waste. That is why event insurance is a must when planning your business event.
What is event insurance?
Event insurance policy is a specialized form of general liability insurance that provides coverage for special events. In addition to liability, it gives cancellation coverage, vendors coverage, among others.
As a fact, accidents in an event is common, and looking after everything to prevent accidents is close to impossible. Thus, event insurance is necessary to protect you and your guests if accidents like slip and fall, and fire occur. Not just businesses, it is crucial for event planners and vendors to purchase this policy.
Consider the following scenarios:
- A severe storm closes road and forces you to cancel the gala dinner.
- A child slips and gets injured due to a slippery floor in your bake sale.
- A few guests have too many drinks, and damage the party space your nonprofit organization rented.
- A guest accidentally sets fire to the property, and the owner decides to sue you for damages.
It is best to protect yourself when litigations can come your way due to these accidents.
What does event insurance cover?
Special event insurance provides the following coverages throughout your occasion:
- Special event liability insurance: This policy provides coverage for:
- Property damage: Your business can either host party at own premises or rent a place. There’s a high chance of property damage in both cases. If the damage occurs in your business property, then the policy covers it. Damages can quickly end up in a lawsuit if it occurs in someone else’s site. Hence, it covers any costs your business might be liable to pay in settlements.
- Bodily injury: Bodily injury is very common in events. For example, your nonprofit is hosting a charity event. During the event, the stage collapses, and the emcee gets severely injured. In such instances where guests, attendees, performers get wounded during the occasion, event insurance covers their medical bills, recovery wages, and potential lawsuits as well.
- Liquor liability insurance: If you’re serving or selling alcohol, it is best to check if your coverage includes liquor liability insurance. In some cases, your business can opt for host liquor liability insurance. The National Highway Traffic Safety Administration found that an average of one alcohol-impaired-driving fatality occurred every 50 minutes in 2018. Any aggrieved party could sue the business for negligence when it comes to alcohol.
In some states, “social host laws” make hosts, event planners, or servers liable for actions of guests even after they’ve left the event as per FindLaw.
Liquor liability insurance covers when your drunk guests or employees:
- Damages the property
- Injures someone
- Involves in an accident
- Event cancellation insurance: After months of planning, canceling an event can be a tough decision. However, it’s more difficult when the cancellation comes with financial damages. As a result, your business could lose thousands of dollars in lost deposits if they are non-refundable.
For example, your nonprofit organization hosted an annual charity dinner. Two days before the event, a fire broke out in a nearby house. The dinner venue was inaccessible because of polluted air and hazardous situation. In the end, you had to call off the event.
The event cancellation policy reimburses your lost deposits and any other expense lost if you have to postpone or cancel the event. Most importantly, it covers situations like:
- Venue issues (like bankruptcy)
- Extreme weather conditions
- Host issues (accident or illness)
- Others: fire, earthquake, terrorism
What are some standard exclusions of event insurance?
Following are the exclusions (but not limited to) of the policy:
- Communicable disease including fear or threat
- Terrorism
- Nuclear, chemical or biological hazards
- Pollution or contamination
- Financial causes like failure or insolvency
- War and military action
Can I add other policies or endorsements to this policy?
The coverage that a standard event insurance provides might not be enough for your event. In such situations, it would help if you add endorsements to minimize your risk exposure. Some common endorsements are:
- Rental coverage: The standard coverage may not cover damages for third-party rental property other than the venue. For example, your business rented high-quality speakers for an event. One of the performers’ trips and breaks the speakers. Rental coverage helps cover any damages to rental property used during the function.
- Hired and non-auto liability coverage: If your business rents car for the event, add hired, or non-owned auto liability insurance as your endorsement. The insurance covers property damage to the vehicle and other auto-related injuries to the people.
Types of insurances that require event policy
It’s best to add this policy to the following insurance:
How much does it cost for event insurance?
Insurance cost depends on the risks associated with the events. You have to pay premiums depending on the following:
- Type and location of event: The location and type of event affects the premium directly. Outdoor events have more risk compared to indoor events, since they can be easily affected by weather changes, uninvited guests.
- Number of attendees: Higher number of attendees increase the chances of trouble. So, the cost of insurance increases with the number of attendees in the event.
- Involvement of liquor: Selling or serving liquor increases the likelihood of accidents and fights. That is to say, involvement of liquor in the event increase the premium.
Frequently Asked Questions (FAQs)
Does the event cancellation policy provide coverage for coronavirus or other pandemics?
Here is a general overview regarding event cancellation coverage in case of pandemics and other outbreaks:
- If an illness or accident prevents an immediate family member or guest of honor from joining the event, the policy provides coverage for event cancellation. Keep in mind the disease cannot be due to a pre-existing medical condition.
- Restriction of government authority might be a covered loss under an event cancellation policy.
- There is no provision for any fear of outbreak, or safety-related issues of guests.
- There is no provision for coverage of infectious diseases and illness or threat of this illness.
When should I buy event insurance?
It would help if you bought event insurance before making deposits to event planners, decorators, and caterers. Usually, it is best to make the purchase no later than two weeks and no sooner than two years of the event.
Do I need event liability insurance if I have commercial general liability insurance?
Yes. You need event insurance even if you have general liability insurance.
Event insurance provides more coverage for events compared to general liability insurance. Any damages related to alcohol and one-day event coverage is not a provision of general liability insurance. In other words, your liability insurance does not provide event cancellation coverage.
Do I need to purchase workers compensation insurance for an event?
If you are a vendor or hire people to work in the event, then you should purchase workers compensation insurance. It protects employees for injuries that might happen in the workplace. Coverages include medical fees, lost wages, and death benefits.
What else should I know about event insurance?
The Insurance Information Institute suggests to consider these points before purchasing event insurance:
- Ask your agent about specific coverages you need for your event.
- Check if your current policies- commercial property insurance, commercial auto insurance already provides some protection.
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