At a recent Event Resources’ Executive Roundtable, one of our clients asked about Event Insurance. When do you need it? What should it cover? With all the “What ifs” surrounding an event (What if my guest speaker’s flight is cancelled? What if a snow storm or hurricane impacts my event?) and ever tightening budgets, you don’t want to overspend on any line item, but at the same time, you need to be adequately insured against any loss. Here’s an overview of the types of insurance that are available.
Event insurance can be purchased for virtually any event, large or small. It’s comforting to know it covers any damages, injuries, accidents or event cancellations that are out of your control. You can recoup the costs for creating the event, or even the profits you expected to generate from it. With event budgets getting into the tens or hundreds of thousands of dollars, it makes sense to protect your investment.
To begin, here are the main types of event insurance:
• General Liability: Bodily Injury/Property Damage
• Third Party Property Damage
• Liquor Liability: Host and Vendor
• Collapse of Temporary Structure
• Inclement Weather
• Prize/Promotional Insurance
• Errors and Omissions by the Event Organizer
• Contractual Liability
• Damage to Premises
• Offsite Activities Liability
• Athletic Activities Liability
• Hired and Non-Owned Autos
• Terrorism (Actual or Threatened)
With all these choices, it’s not a simple task to place an order for event insurance. On the flip side, there are enough types of insurance to cover you for practically any part of your event.
How to Purchase a Policy
First off, see if your organization’s general business insurance also covers special events. You may purchase insurance event-by-event, or if you frequently hold events, on an annual basis. There are many insurance companies you can find on the Internet that can provide a quick quote, or call your insurance agent directly.
How Much Does It Cost?
Of course insurance costs vary on the location, time, date, etc. of an event. Real world examples are always interesting, so without putting anyone on the spot, let’s create a fictitious event and input it on a couple of online sites for an instant quote. A “Kentucky Derby” Benefit was hypothetically created for May 17, 2014 for 500 people. It includes a banquet, liquor would be served by the organizer and valet parking offered.
Here’s the criteria:
• General Liability – $500,000/$1,000,000
• Damage to Premises – $50,000
• Medical Payments – $10,000
• Contractual Liability – Covered
• Hired and Non-Owned Auto Liability – $500,000
• Liquor Liability – Covered
• Accident Medical Expense – $10,000
• Accidental Death – $5,000
• Accidental Dismemberment – $5,000
The resulting quotes were $728 and $1400. (Pays to shop around!)
Now these may not be the appropriate options you should use for your event. Every event has different needs for insurance coverage. Plus, there are also additional details that you should address such as: is the time for set up and breakdown covered? Volunteers? What are the deductibles?
To make sure our information in this article is correct, we ran it by Robert O’Connor, Senior Vice President at Peoples United Insurance Agency. He commented,“Regarding general liability, typically we see minimum requirements of $1m each claim/ $2m aggregate. For special event policies providing general liability, it is important to review the exclusions on the quote or policy. One problem we commonly see is the policy covers spectators only and not participants.”
Keep in mind that other insurance, such as Weather and Cancellation Insurance, is extra. However, your event can be covered for any revenue you have lost from contractual obligations as well as loss of revenue from refunded tickets and sponsorships. The rule of thumb is that cancellation insurance covers perils that are beyond your control, such as a keynote speaker dropping out at the last minute, labor strikes, outbreaks of disease, fire, delayed construction, and so on.
Weather can have a significant effect on outside events. Weather insurance can be purchased for even a certain amount of rain that affects attendance and revenue.
Said O’Connor “The types of coverage and the perils that are covered can be tricky especially when it involves event cancellation and/or weather insurance policies which are much less common and not well understood by most agents or clients. I suggest they use an experienced agent who has some familiarity with these policies.”
Should you get event insurance? To have a “worry free” event, absolutely. Shop around, ask around and see what makes the most sense for your event.
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Event Insurance Now.com
R.V. Nuccio & Associates
The Event Helper.com
BizBash.com: “When and Why You Need Event Insurance”
When to Have Event Insurance
Event Leadership Institute
Although Event Resources Inc. strives to make the information on this website and blog as timely and accurate as possible, our goal is to stimulate thinking and broaden perspectives. We make no claims, promises, or guarantees about the accuracy and completeness of the information or the adequacy of the contents or its suitability for your particular situation.