What Type of Insurance is Needed for Special Events?Posted on Aug 31, 2021
Special events are common in many people’s lives, and many businesses too. Whether it’s a conference, company meeting, prom, anniversary, wedding, or fundraising gala, these activities go beyond day-to-day operations.
Typically, special events can’t be included under a commercial general liability or homeowner’s liability due to the nature and setting of the event. A separate policy needs to be purchased for the occasion.
What is Special Events Insurance?
Special event insurance provides liability coverage for a business or individual during the time such an event is being held. It can be purchased for the day before to cover set-up exposures through to the day after for take down activities.
Why Is Insurance for Special Events Needed?
Although special events, like galas, employee retreats, and milestone anniversary parties, are intended to be safe and fun for everyone involved, there are certain risks that are unavoidable, which is why special event insurance is so important.
Two big risks that come up when any special event is involved are:
- Cancellations: There are many things that can cause cancellations. Often, unforeseen and uncontrollable things occur that force the event to be canceled. One common example is bad weather. People may have to cancel at the last minute because of family emergencies. Even things that make the special event no longer necessary can arise, for example, a wedding cancellation due to the couple breaking up.
- Liability: Liability is one of the biggest risks and one of the most important reasons to buy special event insurance. Special event insurance makes sure that you and/or your business are covered if anything unexpected occurs.
There are so many liabilities and hazards at a special event. A few examples are:
- A guest falls over an extension cord and breaks his or her wrist at your event.
- An employee damages the facilities at which you are hosting your event.
- An attendee consumes too much alcohol at your event and injures themselves and others.
- An attendee accidentally sets fire to a portion of the venue.
Without special event insurance, claims or suits brought by injured attendees can be costly and would have to be paid out of pocket. Also, it’s important to note that many venue owners won’t rent their facility to you if you don’t have liability insurance. So, if you don’t purchase special event insurance, you may not be able to host the event at all.
What’s Covered by Special Events Insurance?
Typically, below is what is covered by special events insurance, but the terms and specifics vary by policy.
- Bodily injury. Special events insurance helps pay for the medical bills if a guest is injured during your event. Also, if the guest sues, the special event insurance will help pay for legal defense.
- Property damage. If the property or facility where the event is taking place is damaged in any way, special event insurance should cover it.
- Rental coverage. Like property damage coverage, rental coverage provides coverage for any equipment or rentals used during the special event.
- Cancellation coverage. As mentioned earlier, cancellations are common, and special event insurance protects your investment if the event is canceled for any unpredictable event like a natural disaster.
- Liquor liability. If you decide to serve alcohol at your special event, then any injury or damage by someone who was served alcohol to another person or property is covered.
- Automobile liability. If your event involves renting, leasing, or hiring drivers, then special event insurance can protect your business from auto liability.
What’s Typically Not Covered by Special Events Insurance?
Like any insurance policy, certain exclusions aren’t covered under special events insurance. However, exclusions are mostly reserved for extremely high-risk situations. Such exclusions include:
- Any event involving guns (like gun shows)
- Sporting events
- Bungee jumping and skydiving
What are the Types of Insurance Needed for Galas and Special Events
- Liability insurance is the most important type of insurance needed for special events, because businesses and individuals (if it is a private event like a birthday party) can be held liable if there is third party bodily injury or property damage.
- Cancellation insurance is another important policy to consider. If you are hosting an event at an outdoor venue or an area prone to extreme weather, cancellation insurance is prudent. However, if your event is held in an indoor setting and not one prone to severe weather like hurricanes or snowstorms, cancellation insurance may not be necessary for you or your business.
- Auto liability insurance is only necessary if your event involves the use of non-owned or hired automobiles. For example, if you are hosting a personal birthday party or a corporate retreat at a venue where people drive golf carts, ATVs, or cars to get around, you should purchase auto liability insurance.
- Worker’s compensation insurance is an important policy to purchase if you are hiring workers at your event. Always ask the catering company or band to provide you with a certificate of insurance evidencing their coverages. And remember to ask to be added as Additional Insured. One example could be if you are hiring a catering company to serve food at the event, workers compensation insurance protects you in the case that a hired worker gets injured at the event.
It’s important to determine what elements will be involved in your event before looking into specific insurance coverage. The type of coverage you’ll want to purchase depends almost entirely on the type of event involved and what elements are included.
For example, if your special event is a job fair, employee retreat, or awards ceremony and doesn’t involve automobiles, liquor, or hired workers, liability insurance and cancellation insurance may be all that you need.
On the other hand, if you’re hosting a birthday party outside with hired workers and an open bar, worker’s compensation insurance and liquor liability insurance should be purchased along with cancellation and liability insurance.