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Prepare your business for special events with liability and cancellation coverage.
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Event insurance can help people or businesses get protection for private, company or public events. Although you can expect to pay a few hundred dollars, the cost ranges based on the number of people attending, days the event spans and types of activities planned. At the least, you’ll probably need event liability coverage to meet the venue’s minimum requirements before the big day.
What is event insurance?
Event insurance is a package of insurance that can protect a variety of special occasions or functions, including business and private events. You can buy one-day event insurance or annual coverage if you hold regular events throughout the year.
Insurance companies offer two main types of coverage to consider: event cancellation and event liability insurance. Many venues require a certificate of insurance showing general or event liability insurance at least.
How event insurance can help during the coronavirus
Many event policies include exclusions for diseases that could mean denied coverage for canceling an event. However, event insurance might help if you bought specific communicable disease coverage. What you should know about getting reimbursed:
- All-cause policies. Some policies cover a variety of risks for cancellation unless a cause is specifically excluded. Many of these don’t exclude diseases or government quarantines. However, you may still need to prove your case to the insurance company or get a lawyer involved since the policy’s other language can disqualify coverage.
- Communicable disease add-ons. Some insurance companies offer communicable disease coverage as an add-on, ensuring coverage for those who bought it before the coronavirus epidemic happened. But you’re unlikely to get approved if you apply for this coverage today.
- Key speakers canceling. For policies that don’t cover canceling for a disease, you could try activating coverage if key speakers or entertainment cancel coming to your event.
- Venue or surrounding buildings. Some policies include provisions for damage to your venue or surrounding areas that prevent people from attending your event. You might build a case for physical damage if the venue or nearby areas closed due to a coronavirus case. However, this could be difficult to prove or involve a lengthy claims process.
- Postponed events. Many insurance companies, venues and vendors aren’t charging extra fees for moving your event to a later date. This could help reduce your financial losses without having to prove your case to the insurance company or go to court.
When might my canceled event not qualify for coverage?
Some events will get excluded from coverage:
- You canceled your event as a preventive measure.
- The policy specifically excludes diseases, pandemics or government quarantine.
- You bought a policy after you canceled or while expecting to cancel. Insurers view the current coronavirus situation as a foreseeable event.
Because every event cancellation involves different factors, contact your insurance company if you’re unsure whether your situation qualifies.
Should I buy special event insurance?
Your business should consider event liability insurance, especially if you don’t have general liability already. General liability can work for smaller events like company dinners, as long as your policy doesn’t exclude factors you’re planning in the event.
However, event liability insurance can protect risks specialized for the event. It also acts as the primary insurance, leaving your business liability as a backup.
Buying event liability for a private event comes down to the amount of risk and personal preference. You might consider special event liability if you invite many guests, serve alcohol or plan an expensive occasion. Event cancellation can also help in case an unforeseen situation causes you to postpone or call off the event.
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What does event insurance cover?
Event insurance includes key coverage your business or private event may need:
- Event liability offers coverage if your negligence causes injuries to guests or property damage. This can include someone falling or a guest or worker damaging the venue’s property.
- Event cancellation. If you cancel, interrupt or postpone your event for unforeseen circumstances, this policy option covers nonrefundable expenses.
- Liquor liability protects you for guests who suffer injuries or damage property while intoxicated. This coverage applies to events where guests pay for alcohol.
- Host liquor liability protects you for guests who get injured or damage property after drinking alcohol. This coverage applies when alcohol is free for guests. Offering complimentary alcohol with a purchased ticket is not considered free.
- Hired or non-owned auto liability covers damage that happens while using hired vehicles or vehicles you don’t own. This coverage may kick in after the owner’s vehicle liability.
- Waiver of subrogation. Many venues require you to sign a waiver giving up the right to sue the venue for negligence. Your insurance company may charge an extra fee for the waiver.
To tailor extra protection for your event, you may want these options:
- Collapse of temporary structures. This coverage protects you for injuries and damage if a tent or temporary building collapses.
- Damaged special clothing. This option reimburses you for damage to tuxedoes, gowns, costumes or expensive clothing designed or rented for the event.
- Lost or stolen gifts. Typically related to weddings, this reimburses for lost or stolen gifts during the event.
- Lost vendor deposits. A few companies reimburse deposits to hold a vendor’s space if the vendor fails to show up for an event.
- Rental equipment. This option covers damage to rented equipment like sound, lighting, audio, entertainment or instruments.
How much does event insurance cost?
Special event insurance could cost you $75 for a small company dinner or $250 for an event with a few hundred guests. You can expect more if the event gets bigger. Factors that influence your premium:
- Number of attendees
- Number of days the event occurs
- Types of attractions or entertainment
- Whether you offer or sell alcohol
- Services or advice you provide during the event
Which businesses need event liability insurance?
Some of the following events could benefit from liability coverage:
- Art exhibitions
- Annual meetings
- Award functions and presentations
- Business conferences or seminars
- Car shows
- Charity balls and dinners
- Community fairs
- Community markets
- Cultural festivals
- Food and wine festivals
- Garden shows
- Live classes and workshops
- Sporting events
What’s excluded from event insurance?
Make sure you understand your event policy inside and out so you don’t forgo important coverage. You may find these exclusions on your policy:
- Amusement rides, fire or fireworks may need specialized coverage
- Protests or activist events
- Hot air balloon rides
- Haunted house events
- Sports events that involve vehicles
- Weather damage — Postponing or moving the event because of weather may be covered on an event cancellation policy.
How can I minimize risks at my event?
Planning an incident-free event means setting up strategies to minimize potential danger. You can lower the likelihood of damage by:
- Posting clear signs and warnings. From hot beverages to thrilling rides, make sure guests know the risks of doing your activities. This could avoid injuries or lawsuits since people are warned ahead of time.
- Implementing a safety plan. You can tailor safety guidelines to the attractions you include in your event. For example, you can make sure guests sit far back from risky entertainment like flame-throwing. Or you can test fair rides and safety restraints on a regular rotation.
- Using your own decor. If a guest breaks decorations you own, you or your business can repay the loss without involving a lawsuit.
- Consider forgoing the alcohol. You could be held responsible if a guest injures someone or themselves or breaks property after drinking alcohol from your event.
- Finding medical payments coverage. This coverage can help you pay for guests’ medical bills without taking the situation to court. Not every event insurance company offers this option.
Planning and running an event exposes you to unique risks if your guests, employees or vendors get injured or damage the venue’s property. Finding the right coverage ensures adequate protection should something go wrong. You can also double-check your business policy to see if it covers event liability, especially for small events.
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