Nothing grabs your attention more than a headline like, “NYC Marathon Organizers Likely to Get Millions from Event Insurance.” In late October 2012, Hurricane Sandy hit the eastern seaboard of the United States with such ferocity that it became the most destructive hurricane of the entire season. Unfortunately for the annual New York City Marathon, which was scheduled for November 4 of that year, the damage to the city was too great to warrant the race. Fortunately for the New York Road Runners, the non-profit community running group which organizes the marathon every year, they had event insurance.
The cancellation of an event can prove costly to everyone involved. Approximately 47,000 runners had dedicated themselves to training in the months leading up to the race. Local businesses were hurt by the loss of business that the 2.5 million spectators would have brought in, the city of New York lost a total of $340 million in revenue, and ESPN2- the race broadcaster- lost valuable programming. Promoters, sponsors, and businesses all lost out because of its cancellation.
That’s why it’s important to have event insurance, and to make sure it has a rider for cancellation.
As stated by Insurance Journal, “The cancellation of the 2012 New York City Marathon is the most recent reminder of the significant economic risks posed by live events. To combat these risks, many insureds with a financial stake in such events—including promoters, advertisers, broadcasting organizations, venues, teams, leagues, and concessionaires—rely on event cancellation insurance.
This important risk management tool can protect an insured’s bottom line against the financial losses that accompany event cancellations and postponements, and insureds should take steps to familiarize themselves with the scope of coverage provided by their event cancellation policies.
In the event of a loss, insureds should strive to satisfy all policy terms and conditions. Doing so will minimize coverage disputes and allow insureds to maximize the value of their event cancellation coverage.”
Event cancellation insurance is just part of a larger category of event insurance. This article will discuss the ins-and-outs of event insurance. Hopefully, it will answer any questions you may have on this topic.
Planning a wedding, birthday party, or class reunion is fun and rewarding. It lets you unite friends, relatives, coworkers, and neighbors to eat, drink, converse, and catch up – and usually all in one night. Unfortunately, as those who plan these occasions know, all of the details can be difficult to manage, and sometimes the process of putting everything together can be stressful. So that an event can take place even if there is a hitch, you should make sure to buy an event insurance policy. Often by the time the event is held you have a considerable amount invested and promised by contract. Event insurance can keep you, or your organization, covered in case a bar mitzvah or block party has to be rescheduled, a piano is not delivered in time for a recital, or a hired keynote speaker slips and falls on stage.
There are different aspects of event insurance that you should be mindful of when deciding on a policy.
1. General Liability Coverage (GLC): Also known as Business Insurance, this is a comprehensive policy that provides protection to the sponsor, promoter, or organizer of the event. It addresses three different possible occurrences: bodily injury to a third party, property damage, and personal injury. This includes the costs associated with each of these incidents, like medical payments, lawsuits, and compensation for damages.
If someone were to fall and break their leg, or the celebrating got out of control and someone smashed a window, GLC would cover your legal defense and settlement. When you purchase this type of insurance, the underwriter will specify the maximum amount that the insurance company will pay against a claim. So, if the person with the broken leg sues you as the event coordinator and is awarded $250,000 and you accrue $100,000 in legal fees, but your policy maxes out at $300,000, then you pay the difference of $50,000.
There will be some exclusions to the policy, which you should discuss with your independent insurance agent. This may include coverage territory and types of spaces covered by the insurance. You may also have to pay for damages that aren’t listed in the GLC, but the policy can be tailor made to fit your needs. Other types of coverage that can be incorporated into your coverage can be fire-related damages, premises and operations liability, products-completed operations liability, and contractual liability.
As stated by Investopedia, “Every business is susceptible to the risk of court cases, bodily injury to the public or property damage. As litigation cases increase, businesses are learning the importance of owning general liability insurance. In this scenario, a proper [GLC] insurance policy is the only way to protect your company’s assets and reputation from expensive lawsuits.”
2. Property Coverage: This coverage can be included in an event insurance package as well. It protects you against losses due to theft or damage of property, whether you own the property yourself or are leasing it from another owner. Most insurance companies include this coverage as a separate option to GCL, so if you want protection from theft, fire, and accidental damage to equipment, then you should consider purchasing this insurance.
If you plan to rent tents, large generators, golf carts, and/or tables for your event, that this could all be covered in case there is an incident. Even in the rental company that provides you with the necessary equipment does not require you to have insurance, that doesn’t mean you still aren’t responsible if the equipment gets damaged. Often the rental company will have a clause in their contract with you stating, “In the case of damage to the equipment, the lessee is responsible for the cost to repair or replace rented equipment.” Don’t run the risk of ignoring the fine print of your rental agreement.
3. Accident Coverage: Often, event coordinators will use volunteers to help build and take down temporary structures or manage attendees during the event. Doing so exposes you to the risk of medical payments or even lawsuits due to accidental bodily injuries. This is a confusing road to navigate, as GLC is limited in its protection of volunteers, and most event producers don’t purchase Workers Compensation insurance for them either.
In order to protect the volunteers supporting your event, this type of plan will:
Provide the volunteers with benefits, should an accident occur. These benefits include excess accident medical expenses, accidental dismemberment and paralysis, accidental deal, and disability.
Provide coverage to volunteers, which would help prevent a potential lawsuit.
Protect volunteers as they commute to and from the event location and their home.
Typically, the insurance is limited to accidents that occur during the event or activity schedule.
4. Weather Insurance: Hosting an event outside has its benefits, but it can also be risky. The weather may not cooperate, causing you to cancel, postpone, or shorten the event. This cost sponsors and participants quite a bit of money.
There are two types of weather insurance: weather cancellation and conditional weather policies. Based on the size of the policy purchased, weather cancellation insurance can cover the costs of the event. This includes all the means by which the event coordinator has invested money into the program, such as planning, organizing, marketing, and operating. A conditional weather policy allows for the event planners to provide promotional sale offers if the weather prevents the event from taking place. So, if you are hosting a New Year’s Eve party or July Fourth parade, you can still benefit regardless of the price at which you sell your merchandise.
5. Event Cancellation: Ask yourself the following questions: “Who’s playing at your event? Is it a big name? Is it someone who has cancelled before? Are there any aspects of the venue, town or time of year that might cause you to cancel your event? Is there any chance that transportation to your event could be interrupted?” Considering these questions will help you to determine whether or not you need event cancellation insurance. Like the New York City Marathon, some events simply cannot be rescheduled because extenuating circumstances abound. This aspect of event insurance will be covered in more detail in a link below, but it is important to remember that as long as the source of the cancellation is covered under the policy, then there will be options for reimbursement.
6. Liquor Liability: One of the most common forms of event insurance is liquor liability. There are two different options to choose from: host liquor liability and liquor liability. Both provide protection in the event that an attendee to your event becomes intoxicated and either injures themselves, someone else, or causes property damage. It pays for medical expenses, repair to property, and litigation fees. The only difference between the two types is that host liability is a policy for those “not ‘in the business of’ serving, manufacturing, distributing, selling, serving or providing alcohol.” Liquor Liability is also covered in more detail by clicking on the proper link below.
Other Types of Event Insurance
Event Insurance is just the tip of the iceberg. There are other, more specific, event-related insurance packages available. Below are the five most common policies to consider before hosting your event.
Private Event Insurance
A retirement party, bar mitzvah, or surprise birthday party is an event that everyone involved looks forward to. However, there are certain risks that you may not be able to predict. Private event insurance can offer protection for those planning the event and even those paying for events. The placement of the proper event insurance policy can help to allow things to move forward as planned, even if something unexpected develops.
Special Event Insurance
When planning a special event like a retirement party, fundraising event, or wedding, there are many upfront expenses that can be lost if the event must be rescheduled or cancelled. Event planners interested in protecting the financial investment that goes into making preparations for a special day can purchase Special Event Insurance.
You’ll remember your wedding for the rest of your life. When you’ve been preparing for your special day for months, maybe even years, you want to ensure that everything goes according to plan, especially since the average wedding costs about $25,000 today. With all of the time, thought, and money you’ve already put in, it’s upsetting to imagine something going wrong on your wedding day. Purchasing Wedding Insurance can give you peace of mind on your big day.
Event Liquor Liability Insurance
When you plan for your event, you want to make sure you are protected in case attendees get out of control. Often, this happens because they’re consumed too much alcohol. For those events that involve alcohol, risk needs to be offset with an event liquor liability policy. Whether it is bodily injury to a third party or property damage, this type of insurance is sold as a separate policy to General Liability Coverage.
Event Cancellation Insurance
It doesn’t matter if it’s the New York City marathon, your wedding, a concert, or a parade. If the weather is not cooperating or a participant gets sick, you risk losing the costs for hosting the event. Event Cancellation Insurance is discussed briefly in this introductory article, but there are more facets to this type of policy that need to be understood.
Personal Event Insurance
There are many events during a person’s life that deserve celebration: graduation, Bar Mitzvah/Bat Mitzvah, quinceañera, wedding, and anniversaries to name a few. Some families may choose to have a simple party with a small gathering of friends and family. Others may want to pull out all the stops. In either case, it is important to consider insurance to protect against any mishaps.
No matter your event, the proper coverage for you is out there; you just have to know the right one to choose. Read through the links above and speak with your independent insurance agent today.
While the majority of people want an agent involved in their purchase of insurance, many people want to see if they can save money by buying direct from the insurance company. Others want to try a direct quote to make sure the premium they’re now paying through their local agent is fair. If you want a quote for your coverage, click on the competitive quote button on the right side of this page.