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Where there’s an accident, there’s usually financial liability. Typically, people try to steer clear of any mishaps, especially on the day of a special event. However, the truth is no matter how many precautions you take, you can’t bring the probability of an accident occurring down to zero. What you can do is save your day with event insurance.
In this article
What Is Event Insurance?
The policy’s primary role is to protect you from losses caused by bodily injury and property damage during an event. Additionally, the insurer also compensates you in case of event cancellation.
An event insurance policy is for any event organizer, such as:
- Event management companies
- Athletic conferences
- Event promoters
- Conventions and seminars
- Nonprofit associations
Suppose that you had to cancel an event at the last minute due to a key person’s injury. Without any insurance, you might not get refunds from the venue, caterers, band or florist, etc. That’s why you need event insurance. It can compensate for the losses due to mishaps such as injuries, property damages, and even event cancellations. Other instances of insurance coverages are:
- A guest accidentally sets the property on fire, and the venue owner sues you for resulting damages.
- Your staff accidentally spills water on the floor. Later, someone slips on the floor and gets severely injured. Such an incident might bring costly medical bills your way.
- Due to a sudden snowstorm, the roads are blocked, and you have to call off your Christmas party.
- A guest drinks too much alcohol at your party and starts assaulting other people and damaging property.
Things may take a wrong turn during an event. However, you can prevent losses caused by uncontrollable factors through event insurance. You can get coverage for as low as $50 (subject to your requirements and the provider). The insurance costs less than you might think and saves you plenty.
When the lawsuit claims arises, make E&O insurance your savior!
Coverages of Event Insurance
The insurance helps you cover costs arising from the following:
For instance, you hosted a dinner at the launch of a famous artist’s gallery. To celebrate the day, a staff member pops open a bottle of champagne. Unfortunately, the cork strikes one of the artworks and ruins it. Destruction of art can be pretty costly for you. Since event insurance covers property damages, it keeps you out of financial trouble.
Event insurance takes care of any liability arising from third party property damage inflicted by you or your staff. Some insurers even cover for the damages or injuries inflicted by guests.
Even after taking the utmost care to make things safe for your guests, people may get injured during an event. For instance, a guest may slip and hurt their legs due to some water your employee accidentally spilled. Another example could be injuries to performers due to stage collapse. Bodily injuries can result in large medical bills. However, event insurance helps you pay for such injuries caused to the third-party.
Whether you are hosting a social gathering, wedding reception, Christmas party, or fundraiser, liquor is commonly served. While people can typically drink without incident, sometimes things can get out of hand. Depending on what state you’re in, hosts are typically held responsible if their guests leave drunk and go on to harm a third-party. For instance, an intoxicated guest may get into a car accident with someone else while driving back home. Or, an inebriated guest may injure someone at the party. Such events bring liabilities onto your shoulders.
You cannot control how much alcohol your guests consume. But you certainly can prepare yourself for possibilities that lead to financial trouble.
Organizing an event can take ample time and investment. However, sometimes even if you prepare everything correctly, you may have to cancel the event altogether. With event insurance, event cancellation does not have to be a nightmare for you. The insurance covers for:
- Rescheduling costs
- Cancellation by speakers or performers
- Reimbursement for the event
- Reduced number of audience members
The policy may cover equipment installed in or rented from the venue. For instance, suppose you organize a small program in a hall that comes with sound amplifiers. During the setup, if your employee trips over the amp and damages it, your event insurance may cover such damage.
Some insurers may cover you for advertising injury lawsuits. For instance, the event you are hosting may be accused of libel, slander, copyright infringement, invasion of privacy or misappropriation of advertising ideas. In such instances, event insurance helps cover for losses arising from those allegations.
The policy and its coverages depend on the nature of the event and your requirements. Moreover, the policy terms, conditions, and language may differ as per your needs and the insurance provider. For instance, while some insurers allow unlimited additional insureds, others have limitations. Hence, the best way to understand your coverages is through your agent or the insurance carriers themselves.
What Are the Exclusions?
Event insurance is not a comprehensive policy. There are exclusions such as:
- Epidemics and pandemics
- Nuclear, chemical, or biological hazard
- Typically, bachelor or bachelorette parties
- Terrorism, war, and military action
- Abuse or molestation
- Intentional damage to property by the insured
- Damage to venue property due to wear and tear, fungi, electrical breakdown, depreciation, etc.
- Pollution liability
Customize According to Your Needs!
You can customize your policy through endorsements. Endorsements help you eliminate, modify, or add coverages to ensure that the policy is personalized to your needs. Here are some additional coverages you can request from your insurance provider:
While the insurance may cover losses to equipment that comes with the venue, it does not cover equipment you rent from a third-party. For instance, say you’ve rented speakers from a third party. Any damage to those speakers will be your financial responsibility. However, you can prevent such costs through rental coverage.
Usually, insurers do not let you add multiple insureds. However, you might need to insure additional parties, such as the company in charge of the facility or the venue owner. You can add such parties through an additional insured endorsement.
Hired/non-owned auto liability
If your event management company uses rented cars for events, you will need to add coverage to your standard event policy. Consider adding a hired or non-owned auto liability endorsement, which will protect you from losses due to damage to the vehicle or third-party injuries.
Cost of Event Insurance
The cost of insurance depends on the following:
- Type of event: Outdoors or indoors
- Location of the event
- Number of attendees
- Amount of liquor to be served
Add Event Insurance Coverage
According to the Insurance Information Institute, here are a few things you should consider before purchasing event insurance:
Does the event cancellation policy provide coverage for coronavirus or other pandemics?
- 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?
Usually, the best time to make the purchase is no later than two weeks and no sooner than two years of the event. You should buy an event insurance policy is before making deposits to event planners, decorators, and caterers.
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 might need workers compensation insurance. The legal requirement for workers compensation insurance depends on the state you are located in. Despite what the requirement may be, it is wise to have the insurance in place. The insurance protects employees from injuries that might happen in the workplace. Coverages include medical fees, lost wages, and death benefits.
Don’t let mishaps ruin your day. Conduct events successfully.
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