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Special events liability insurance is a critical part of any event and can protect both the renter and venue from unforeseen incidents that could lead to financial loss. It can also help insulate the venue from claims against its existing business insurance policy and even reduce overall insurance costs over time.
Here is a perfect example of why special event insurance is critical, while the below example could happen to anyone:
Unfortunately, special events insurance is highly painful to sell and distribute for all parties involved due to the low cost and overall nature of the product.
So what are the pain points?
For Brokers/Agents:
Because policies can start at $75, it is hardly worth the time and effort for brokers and agents. Policies can take days, even weeks to coordinate, making it inefficient to process special event policies. However, in order to maintain a strong relationship with venues, brokers and agents continue to (grudgingly) sell these policies and view these as a loss-leader for potential future business from the venue for larger business policies.
For renters/event organizers:
Whether it’s a wedding, birthday party, or school event, organizing an event is already stressful. Finding out from the venue that an insurance policy is required (especially at the last minute) can add further stress to the host. Furthermore, having to research and acquire a policy can take days, even weeks.
Most importantly, in the insurance world there is a thing called the subrogation clause, which is defined as “a right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured.” So in other words, renters and hosts can be pursued by an insurance company for any losses they have caused. A very strong argument to get a policy.
For Venues:
Renting out space for a third-part event is a source of revenue for millions of venues around the country. As part of the risk mitigation process for these venues, the venue (or their insurance company) require third party renters to secure their own insurance for the event. However, this requirement adds a large administrative burden on to the venue. Administrators will need to follow up with renters to ensure they have secured an insurance policy, not to mention the right coverage and limits. Also, ensuring that the venue is properly listed as an additional insured on the policy certificate is an additional burden.
Reasons coverage is needed
Why venues must offer coverage
At the end of the day, an insurance policy is a requirement for any business. A single claim could lead to a business/venue losing access to affordable insurance options (or even leave it with no options at all). Venues that rent out their spaces can insulate themselves (and protect their insurance premiums) by requiring third-party renters to secure special events insurance.
A simple indemnification clause in the renter’s agreement is not enough!
Why renters must get it
Aside from being made mandatory from the venue, a special events insurance policy can protect the renter/organizer from lawsuits and financial losses that results from accidents and injuries that occur during the event. It also provides peace-of-mind allowing the policyholder to focus on the event.
Not convinced? Consider these examples:
- Photographer’s camera bag with event pictures was stolen during the event. Hotel accused of failing to provide adequate security. Event Insurance paid $3,000 plus defense costs (legal fees).
- Venue held Rentee responsible for damaged carpet at reception. Event insurance paid $5,523.81.
- Wedding guest slips on rose flower. Event insurance paid $4,200.00.
- Groom while carrying his bride dropped her. Law suit against venue. Event insurance paid $12,250.00.
- A guest was injured in a fall on a slippery dance floor. Law suit alleged hotel provided improper dance floor. Event coverage paid – $2,500 plus legal fees (defense).
- A guest moved antique dining table and two table legs cracked. Claim paid by Property Damage coverage – $1,865.
- Pregnant x-girlfriend crashes wedding ceremony. Groom’s sister fights x-girlfriend. Venue, Wedding Planner, Groom/Bride sued. Damages alleged were $120,000. Event insurance settled for $15,000.
- Elderly guest tripped over electrical cord taped to the carpet. Event coverage paid $15, 245.06 plus defense costs (legal fees).
- Guest became intoxicated, killed himself and two others whilst driving home from the event. Law suit filed under Dram Shop laws to hold hotel responsible. Event insurance paid $775,000 plus legal fees (defenses costs).
- Hosts held responsible for damaged table top and other property damages. Event insurance paid by Property Damage coverage – $7,000
- Emerald ring stolen during wedding event. Hotel sued for negligent security. Event insurance paid $11,250 plus defense costs (legal fees).
- Gifts were stolen from trunk of car. Event coverage paid $1,088.
- Conventioneer slips on ice/snow at venue. Sues Convention organizers and venue. Event insurance pays $24,500.00.
- Fire damage to venue caused by rentee. Event insurance paid $24,365.60.
- Man sues venue for false arrest/wrongful detainment after crashing wedding reception. Event insurance pays nothing, but spends $55,000 in defense costs.
- “Silly string” sprayed on guests at birthday party caught fire causing second & third degree burns to several children. Law suit filed against rentee and hotel for $1,000,000. Event insurance settled for $135,456 plus legal fees (defense costs).
- Multiple claims filed against hotel for food poisoning. Event insurance paid $4,360.20.
- Fire loss to venue’s ballroom. Event insurance paid $7,000,000 for property damage and loss of business income.
- Guest being interviewed on stage during a convention had heart attack and died. Estate sued for damages alleging that the stress caused by the interview contributed to guest’s death. Event insurance paid policy limits $1,000,000 plus legal fees (defense costs).
- Protester files lawsuit against venue for wrongful detention and false arrest. Event insurance pays $10,000 plus defense costs (legal fees) in settlement.
- Earthquake during convention dinner caused suspended ceiling and lights to fall injuring several guests (some severely). Renter and Hotel sued for $10,000,000 (Building contractor and architect weren’t sued because the Statute of Repose expired). Event insurance paid $1,000,000 policy limits. Hotel’s insurance paid $6,500,000 plus defence costs (legal fees).
Why brokers should continue to offer special events coverage.
Although a traditionally painful product to sell, it is now possible to automate the entire distribution of a special events insurance policy. This allows brokers to maintain their relationships with the venue with no additional effort. Best of all, commission is still paid to the broker making special events insurance a passive income source for brokers going forward.
GatherGuard vs. Eventsured vs. Travelers vs. WedSafe
For a pricing and coverage comparison, see this post.
What is Special Event Insurance, and Why Do You Need It?
Special event insurance is a type of insurance that provides coverage for damages or injuries that occur during a specific event. This type of insurance can be purchased for both private and public events. Private events may include weddings, birthday parties, and anniversaries. Public events may consist of festivals, parades, and fairs.
Special event insurance can help protect event organizers from legal liability if someone is injured or property is damaged during the event. It can also help cover the cost of canceling or rescheduling the event if it is interrupted by poor weather or other unforeseen circumstances.
When planning an event, it is essential to consider whether special event insurance is necessary to protect yourself and your guests.
What Types of Events Are Typically Covered By Special Event Insurance?
When planning a special event, the last thing on your mind is likely insurance. However, special event insurance is a wise investment to protect yourself, your guests, and your business in case of an unforeseen accident or incident. But what types of events are typically covered by special event insurance?
Weddings
Weddings are a special day for couples in love and ready to start their lives together. On this day, two families become one, and everyone celebrates the beginning of a new journey. It is a day filled with emotions, from happiness and joy to sometimes sadness and stress. Because of all these factors, weddings are one of the most common events covered by special event insurance.
Wedding event insurance can protect you from paying out of pocket for damages to the venue, cancellations due to weather or other uncontrollable circumstances, and even personal liability if a guest is injured at the event. By being prepared for anything that could go wrong, you can relax and enjoy the wedding, knowing that you and your guests are protected. The wedding insurance policy you choose should cover all the bases to ensure your peace of mind, as well as that of everyone else.
For more information on wedding insurance costs and wedding liability insurance coverage options, see here.
Birthdays and Anniversary Parties
Birthdays and anniversaries are special occasions celebrated with friends and family. However, hosting a party can also be a lot of work. In addition to planning the guest list and menu, hosts must also consider logistics like decorations, activities, and transportation.
For larger parties, renting a venue or hiring additional staff may also be necessary. Given all of these potential expenses, it’s essential to be mindful of your budget. One way to do this is to purchase special event insurance. This type of insurance can protect against property damage, cancellations, and personal liability in an accident.
While the cost of premiums may seem unnecessary at first glance, it could save you a lot of money in the long run. As such, special event insurance is something that every party planner should consider.
Birthday party insurance will often cover decorations, food and services, renting equipment, lost deposits and cancellations due to weather. If you are renting a venue for your birthday or anniversary celebration, the facility may require you to have insurance coverage.
Corporate Events
Whether you’re planning a holiday party, company picnic, or any other corporate event, ensuring you’re adequately protected in case something goes wrong is vital. That’s where special event insurance comes in. This type of insurance can protect your business from liability in case an employee or guest is injured at the event and property damage to the venue or equipment used for the event.
Special event insurance can also provide coverage if the event has to be canceled or rescheduled due to bad weather or another unforeseen circumstance. With this type of insurance in place, you can rest assured that your business will be protected in case of unexpected problems.
Fundraising Events
When it comes to planning a successful fundraising event, there are a lot of factors to consider. From finding the right venue to promoting the event, a lot goes into ensuring everything goes off without a hitch. That’s why it’s essential to have special event insurance in place.
If something unexpected happens, such as property damage or cancellations, special event insurance can help protect your investment and ensure that the event is still successful. And if someone is injured at the event, personal liability coverage can help cover any resulting medical expenses.
So if you’re planning a fundraiser, keep special event insurance in mind. It could be the key to ensuring your event is a success, no matter what happens.
Things to Keep in Mind When Shopping for a Special Event Insurance
Here are some tips to keep in mind when shopping for special event insurance.
Determine the Length of Time You Need Coverage For
The first thing you need to do when shopping for special event insurance is to determine the length of time you need coverage. Do you need coverage for a weekend-long event? A week-long event? One-day event insurance? The answer to this question will determine the type of policy you need to get.
Types of Policies
There are three main types of special event insurance policies: one-day, multi-day, and annual.
- One-day policies, as the name suggests, cover a single day. They’re perfect for weddings, birthday parties, and company picnics.
- Multi-day policies cover two or more consecutive days and are ideal for festivals, conventions, and fairs.
- Annual policies cover an unlimited number of days over a year and are perfect for repeated events like weekly concerts or monthly seminars.
Once you know how long you need coverage for, getting insured is easy.
Now that you know the different types of policies available, let’s look at how to determine how long you need coverage.
Decide What Type of Coverage You Need
The next thing you need to do is decide what type of coverage you need. There are two main types of special event insurance: cancellations and accidents.
Cancellation Insurance
Cancellation insurance protects you from financial losses if your event is canceled or rescheduled. If you must cancel your event due to weather conditions, cancellation insurance will reimburse you for non-refundable deposits that you may have already paid. Cancellation insurance can also reimburse you for lost revenue if you have to reschedule your event due to an unforeseen circumstance.
Accident Insurance
Accident insurance, on the other hand, protects you from liabilities that can arise from accidents during your event. Accident insurance will help cover medical expenses if someone is injured during your event. Accident insurance can also provide coverage for property damage that occurs as a result of an accident.
Get Quotes From Multiple Insurers
Once you know the length of coverage you need and the type of coverage, it’s time to start getting quotes from multiple insurers.
Here’s a closer look at how to get the best deal on your business insurance.
Know Your Coverage Needs
The first step in getting the best deal on business insurance is knowing exactly what type of coverage you need. Do you need property insurance? Product liability insurance? Professional liability insurance? Workers’ compensation insurance?
The answer to this question will be different for every business, so it’s essential to consider your specific needs. Once you know what coverage you need, you can start researching options and getting quotes.
Compare Apples to Apples
When getting quotes from different insurers, it’s essential to make sure that you’re comparing apples to apples. That means closely examining each policy’s coverage and ensuring that it meets your needs. Comparing deductibles, premium costs, and anything else relevant to your decision-making process is vital.
By making a side-by-side comparison, you can be sure you’re getting the best deal possible on your business insurance.
Is It Worth Having Special Event Insurance?
Special event insurance protects you from financial losses if something goes wrong on your big day. But is it worth the cost?
- The most crucial benefit of special event insurance is that it provides financial protection in case something goes wrong. For example, if your event is canceled or postponed due to bad weather, you may recoup some of your losses through insurance.
- Special event insurance can be expensive, especially if you’re insuring a large event. The cost of the premium will depend on factors such as the size of the event, the location, and the type of coverage you’re seeking.
- Not all special event insurance policies are created equal. It’s essential to read the fine print of your policy carefully so that you know precisely what is and isn’t covered. For example, some policies may not cover bad weather, while others may only cover certain types of accidents or injuries.
There’s no right or wrong answer when it comes to whether or not you should insure your special event. Ultimately, it’s a decision that must be made based on your unique circumstances and budget.
Special event insurance may be worth considering if you’re concerned about potential risks and have a large budget for your event. Otherwise, you may decide that self-insuring is the best option for you.
Taking the necessary precautions and being prepared for potential mishaps can help ensure a successful and memorable event for you and your attendees. And with special event insurance, you’ll have added peace of mind knowing that your business is protected from unforeseen incidents.
Disclaimer: The materials available on this site are for informational purposes only and should not be construed as advice or guarantees on any subject matter. The opinions and statements expressed through this site are the opinions of the individual author and may not reflect the opinions of JAUNTIN’. This blog contains general information which may not be current or accurate. For specific questions about insurance and any requirements, please contact your insurer directly.
Event Insurance FAQs
It all depends on the insurance company, but it is common for insurers to offer coverage online for over 100 different types of event, including weddings, birthdays parties, bar mitzvahs/bat mitzvahs, Quinceaneras, baby showers, social receptions, and more.
Depends on the policy, however cancellation/postponement coverage is usually available for an additional fee.
Yes, most special event policies have general liability (GL) as the base coverage.
Absolutely, however please check local laws and permitting requirements before purchasing a policy.
Yes, often referred to as host liquor or liquor liability coverage, it can be included as part of the general liability (GL) portion of the policy or as a separate add on.
Yes, the main purpose of special event coverage is to cover you from losses occurring on on third-party properties.
Depends on the insurers, however many allow you to purchase up until the day before.
Yes, depending on the insurer. Many insurers recognize that events like weddings commonly occur outdoors and will provide coverage for outdoor events. Exclusion will apply – please be sure to read the policy carefully. Many insurers have sample policies available online.
In general, the venue’s insurance protects the venue and does not provide coverage for liability or property damages caused by renters. Just like a renter of an apartment can be held liable for damages, so can a renter of an event venue.
This is a definite possibility. In most cases, third-party insurance is required by the insurers of the venue/property. Even if it isn’t, requiring third party renters to acquire their own insurance can insulate the venue’s insurance policy from claims.
Coverage can start from $75 and cover up to four days of coverage.
Many insurance policies have a subrogation clause, which grants the insurance company the right to seek damages from at-fault third parties on behalf of their customers. Subrogation allows the insurer to pay your claim right away, and then go after the at-fault party on their own to cover that expense. In the case of events, the venue’s insurer may pay for damages upfront, then go after the renter for any damages they feel they are entitled to.
Post-claim underwriting happens, just as it says, after the claim. The insurance company only goes through the underwriting process after a claim is made. Any inconsistency found between the records and the forms used to apply for the coverage could make a claim invalid. In the case of wedding venues, if it is not disclosed upfront that venue rentals are a source of income, the venue itself could be denied coverage in the event of a claim arising from a third-party event. This could further expose the wedding couple.
Bailee coverage can cover losses to customers’ property due to perils including fire, lightning, theft, burglary, robbery, windstorm, explosion, collision, floor, sprinkler leak, earthquake, strike and damage or destruction in transportation. In the case of events, if a third-party renter rents third-party property as part of the event that’s unrelated to the venue, the event host could be liable for any damages caused by or to the third-party property.
TULIP stands for Tenants’ and Users’ Liability Insurance Policy that provides special event liability coverage. It is used by venues that allow and/or rent their facilities to third parties for special events. It is ideal for users who do not normally carry a liability insurance policy (i.e. a couple getting married) and is offered on a daily or per event basis. It can also cover vendors, performers and exhibitors, depending on the insurance company. It protects both the event host (renter) and the venue against claims by others who may be injured or experience damage to property due to the event.
Events may range from low risk events such as business receptions and meetings, or weddings to high risk events including festivals, sports events, or concerts.
It is becoming more and more common for event planners to include special events coverage as part of their planning services. This not only protects the renter and the venue, but shows the renters that their event planner is looking out for them. With the JAUNTIN’ event insurance platform, it makes it possible for event planners to provide this added value with very little marginal effort or cost to the event planners themselves.
Primary and Noncontributory
Primary designates that one party’s liability policy is responsible for responding to a claim first before another entity’s policy applies. Noncontributory stops the primary party’s insurer from seeking contribution from the other entity’s policy for paying a claim.
Waiver of Transfer of Rights of Recovery Against Others to Us
A legal endorsement that prevents an insurer from recovering the money they’ve paid out on a claim from a negligent third party.