Special Event Insurance protects your business from liability during a business-hosted event.
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Any thriving business knows the perks of leveraging events to promote its services and products. In this digital age, special events like conferences, fairs, and seminars offer businesses the opportunity to connect with their customers and prospects in a more engaged and personalized way. However, by hosting such an event, a business opens itself up to a number of risks and variables outside of its control—the kind that may come back to the company in the form of a lawsuit.
What is Special Event Insurance?
Special Event Insurance is a form of liability coverage that can protect a company in the case of third-party bodily injury or property damage to third parties during a special event hosted by the business. Based on your policy, in addition to property damage and bodily injury, Special Event Insurance may also protect your investment in producing the event, including cancellation costs, should an extraordinary situation arise.
Examples of situations that Special Event Insurance may provide coverage for include:
- A guest slips and damages his arm at your conference.
- An employee damages the venue at which you are hosting your event.
- An attendee consumes too much alcohol at your event and injures people on his drive home.
- A guest accidentally sets fire to a portion of the property.
- You must cancel the event due to an unforeseen circumstance out of your control.
What does Special Event Insurance cover?
Special Event Insurance commonly covers third-party bodily injury, property damage, and cancellation costs. The coverage areas offered, however, will typically vary based on your specific policy, as many insurers offer different features based on the types of events you hold.
The following are several facets of Special Event Insurance that you’ll want to consider to determine the key components your policy needs to adequately protect your business and your events:
1. Third-party Bodily Injury
If a guest or other third party is injured at your event, your business may be held liable. Special Event Insurance can provide coverage for any third-party injuries, providing funds for medical expenses and legal defense costs if your business is sued.
- Example: An attendee of a conference your company is hosting trips over a power cord that was not adequately secured. He ends up injuring his hip and requires medical attention. Your Special Event Insurance would cover the injured attendee’s medical fees and any resulting lawsuit against your company.
2. Third-party Property Damage
This coverage can cover any property damage that occurs at the physical location where your special event takes place, including damage to the venue itself. Typically, you can only use third-party property coverage on properties that are not owned by you or your business.
- Example: Your company is hosting a VIP dinner for your top clients and you rented a nice restaurant. However, at the event, one of your attendees causes damage to the property by breaking a very delicate mirror. The repair costs to replace this mirror would be covered by third-party property coverage.
3. Rental Coverage
Rental coverage can protect against any damage to items or equipment rented for the purpose of your event.
- Example: Your business is hosting an event and leased a few high-quality speakers. At the event, one of your attendees damages your rental speakers. Your rental coverage would protect your investment and cover the cost of any damage to rented property, including your speakers.
4. Liquor Liability
One situation in which you should definitely purchase Special Event Insurance is if you decide to serve and sell alcohol at your business event. If someone your business has served alcohol to ends up injuring someone or damaging property, your business may be held liable. Liquor liability coverage can provide protection in this scenario.
- Example: Your company hosts an annual dinner for your valued customers. As a part of the evening’s itinerary, you included a happy hour cash bar where your guests can purchase alcoholic drinks. One of your employees drinks too much, becomes severely inebriated, and starts a fight with one of your customers that results in bodily harm. Liquor liability would provide coverage if your business is sued.
5. Cancellation Coverage
As the name implies, this type of coverage protects your investment in a special event, in the case of any unexpected cancellations. This can include natural disasters, rain, sickness, or anything else that may force you to have to cancel your event.
- Example: Your business is hosting a special event for your top salespeople centered around a roundtable dinner with a prominent entrepreneur. Unfortunately, the entrepreneur falls ill and can’t attend, forcing you to cancel the event. Your cancellation coverage can reimburse you for the deposit you made to the venue.
6. Automobile Liability
If your company does not normally use vehicles for business purposes but ends up renting, leasing, hiring, or borrowing a vehicle for a special event, hired and non-owned auto coverage is an important coverage that can protect your business from third-party auto liability.
- Example: Your employee is using his truck to transport equipment to a marketing event that his team is organizing. While on his way to the venue, he becomes distracted at the wheel and ends up rear-ending another vehicle. Your automobile liability coverage would cover the damages to the other car.
What are the key exclusions to Special Event Coverage?
Of course, like any insurance policy, there are certain situations that are not covered by insurance. In the case of Special Event Insurance, many insurers will not cover events that are particularly dangerous in nature.
Some situations that are commonly not covered:
- Firearms, gun shows, and events involving guns
- Sporting events
- Aerial maneuvers such as bungee jumping and skydiving
- Pyrotechnics (fireworks) or anything including an open fire
However, most of these situations only apply to special occasions and are not applicable to the majority of business owners. So as long as you don’t plan to have a fire-breather or plan to skydive at your next corporate event, you should be in the clear.
Does my business need Special Event Insurance?
If your business is planning on holding any events, it may be wise to consider Special Event Insurance, particularly if you do not already have an existing general liability policy. Even if your business does have general liability coverage, however, it’s important to keep in mind that, depending on the event, your general liability insurance may not provide enough coverage.
Special Event Insurance provides some unique coverage features that most general liability policies do not include, like cancellation coverage and liquor liability. Moreover, if your business solely relies on its general liability policy to cover any special events, you may find that your coverage limits are easily exhausted if you’re faced with multiple claims. Special Event Insurance provides separate coverage limits, allowing you to have dedicated funds to address your event liability specifically.
When planning a special event, consider all the variables that are outside of your control:
- Last minute vendor or venue cancellation
- Bodily harm to your guests at the event
- Bodily harm caused by your guests at the event
- Property damage to the venue caused by your guests
- Property damage to the venue caused by your employees
In many cases, the choice to purchase Special Event Insurance may not be up to you. Depending on the size of your event, many venues will require you have this coverage.
Is Special Event Insurance required?
Depending on the vendor or venue, you may be required to have Special Event Insurance or general liability insurance. Specific venues will have their own requirements for the type of insurance you’re required to carry in order to host an event at their space, and many will require you to show proof of liability insurance with a certificate of insurance. Additionally, venues may ask that they are included as additional insureds on your policy in order to reduce their liability.
How much does Special Event Insurance cost?
Special Event Insurance can be purchased as a standalone policy or as an endorsement to your commercial general liability insurance. Pricing for Special Event Insurance varies a great deal, depending on a number of factors, including the type of event, length of coverage, and more.
Here are some factors that may influence pricing:
- Type of business
- Industry
- Type of event
- Expected number of guests in attendance
- Whether or not you will be serving alcohol at the event
- Coverage limits
In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer Special Event Insurance:
| Provider | Special Event | General Liability | Business Owner's Policy |
|---|---|---|---|
| CoverageSmith | ✔️ | ✔️ | ✔️ |
| CoverWallet | ✔️ | ✔️ | ✔️ |
| Thimble | ✔️ | ✔️ | ❌ |
Final Word
It’s always a wise choice to insure any financial investment that you make if possible. This is the case for Special Event Coverage. Usually, the more successful your event is, the greater the likelihood there will be factors outside of your control. As a business owner, it is your responsibility to insure not only your company but also your attendees.
Event marketing can be a powerful way for any business owner to promote products and services, create and maintain clientele, and build brand awareness. Don’t let any possible and unforeseen circumstances derail you or your company from realizing the profits of your event.