Event Insurance: Meaning, How It Works, What It Covers, Pros

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If you are organizing an event, whether it be a corporate conference, symposia, live concert, award ceremony, school or college annual function, wedding ceremony, or sporting event like cricket, hockey, or kabaddi, make sure you have the right event insurance in place.

Furthermore, it can help protect your event from unforeseen circumstances and losses to your business. You may be understandably anxious about what will happen if you can’t host the event if you have a sizable non-refundable deposit on the line.

Let’s start with the fundamentals without further ado: What is event insurance?

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What Is Event Insurance?

Event insurance is a specific type of general liability insurance made to help safeguard the significant event you’ve paid for. This specific policy typically covers claims for property damage, bodily injury to third parties, as well as expenses related to holding the event.

However, if you are sued for property damage, bodily injury, or other loss that is allegedly the result of a private event, special event insurance can assist in defending you. This is true whether you are the event organizer, event holder, sponsor, or the venue itself.

A professional venue will demand that you secure this insurance before the event and present a certificate of insurance as proof. If something goes wrong, they don’t want to have to look for you and demand payment.

How Does Event Insurance Work?

Event insurance serves to defend the event organizer from lawsuits asserted as a result of guest injuries and/or venue damage. Without insurance coverage, an attendee injury might cost the organizer of the event thousands of dollars.

Often, the question of why the venue expects its tenants to get event insurance while the venue itself ought to carry insurance is one we get asked frequently. If the renter is accountable for the injury or damage, the venue’s insurance will not protect them. Typically, it will only offer protection for the venue’s activities.

However, if you own a beautiful venue and rent out your space for events, you might want to think about asking your renters to have insurance. This could come in handy if one of their visitors trips and falls or if someone drags a table across your lovely hardwood flooring.

What Does Event Insurance Cover?

Any plan for a wonderful celebration also contains a big risk.

Event insurance primarily covers two things:

Liquor Liability: This covers legal costs and damages if serving alcohol at your event results in a covered risk (i.e., bodily injury or property damage). If you’re hosting an event where alcohol is not being sold, such as a BYOB or open bar, this is already covered by your event policy. However, if you run a company that provides alcohol for sale, service, or distribution at events, you can easily add retail liquor liability coverage to your policy.
Event Liability: Protection against bodily harm and property damage to guests, suppliers, or the event site. Legal fees and damage payments are also included in covered claims.

What Event Insurance Doesn’t Cover?

For the fact that coverage is available for a wide range of events, the following ones are excluded by insurance companies:

Events for activists, such as demonstrations or rallies
Motorized competitions in sports, like a tractor, pulls
Home hauntings
Boating or aircraft events
Hot air ballooning events

Before purchasing a policy, look for exclusions to ensure that you won’t be caught off guard later if you run into a condition that isn’t covered. For instance, the majority of wedding insurance policies exclude coverage for a change of mind. The policy also may not cover deposits made by anybody besides your immediate family. Moreover, if you decide to file a claim, you’ll need documentation to support the deposit amounts.

Event Insurance Pros

Numerous occasions, including weddings, family gatherings, anniversaries, baby showers, and others, may need intricate and expensive planning. One approach to lower the financial risk brought on by unplanned delays, cancellations, and other unforeseen events is to purchase special event insurance. If you’ve been wondering, “Should I acquire special event insurance before holding a big event?” The advantages of event insurance include the following.

Several Common Types of Events Would Be Covered by Specialized Insurance: If you’re not sure if your event qualifies as a special event, it probably does. This form of specialized insurance covers many commonplace occurrences. For instance, you might be able to get insurance for the following scenarios:
1. Religious occasions
2. Family gatherings
3. Baby showers
4. Weddings and anniversaries of marriage
5. Fundraisers
6. Graduation celebrations
7. Religious events

Even in unexpected situations, you could experience peace of mind: The ability to unwind is possibly the largest advantage of purchasing event insurance. If something goes wrong with your event, you won’t be financially liable. Regardless of the kind of event you want to host, this benefit can be enough to warrant purchasing insurance.

Special occasions are likely to be emotionally or personally significant, making it even more important than usual to have comprehensive insurance coverage. Having special event coverage could come in handy in situations like vendor cancellations, natural catastrophes, canceled travel, sick family members, and damaged essentials.

Depending on several factors, coverage may be surprisingly affordable: Last but not least, you might be concerned about the cost of special events coverage. It’s wonderful news that this insurance type has the unanticipated benefit of allowing you to purchase useful coverage at a reasonable cost. You might be able to negotiate with your insurer to establish a plan that satisfies both your demands and your financial constraints. Several factors, including the following, affect typical premium costs:
1. The occasion’s scope, duration, and complexity
2. The anticipated attendance at the event
3. The coverage options and added riders

Even if you have a lot of expertise with many forms of insurance, from professional liability to special events insurance, having a “cheat sheet” of advantages you can use to describe the advantages of special events coverage may be useful. If you are planning a significant event, use these talking points to outline the benefits of having it insured and the peace of mind that comes with coverage.

Event Insurance Cons

Despite its many benefits, there are also some drawbacks associated with purchasing event insurance.

Epidemiology and pandemic coverage are frequently excluded from event insurance contracts. If you wish to carry full coverage, be sure your policy has an endorsement for “all hazards” coverage.
Even though there may be exclusions, certain clauses buried in the small print may make it more difficult for you to make a successful claim. To ensure coverage for all risks that aren’t specifically excluded, it is advised to select “all-cause coverage.”
Activities like those listed below are typically not covered by event insurance:
- Rodeos
- Firearms
- Amusement equipment
- Fireworks
- Jumping from a cliff
- Maneuvres in the air
- Trampolines
You’ll probably need to present a certificate of liability insurance to the venue owner.
The cost of event insurance can be prohibitively expensive depending on the type and size of the event being insured. An average policy could range anywhere between hundreds to thousands of dollars, creating a financial burden on organizers who may not have access to adequate funds.
It’s important to note that even with an active policy in place, there are still certain events or occurrences which may not be covered by the coverage provided by such policies. This means that if your particular case isn’t covered under your specific policy, you won’t receive any reimbursement for damages incurred due to unforeseen circumstances at your event or venue.

Do You Need An Event Insurance Policy?

Consider event insurance if you’re planning to spend a lot of money on the occasion. Coverage for event insurance could give you peace of mind because the majority of vendors don’t provide reimbursements for cancellations or postponements.

However, the willingness of venues to assume sole liability for harm to their property is also declining. You could be required by the venue you select to acquire liability insurance in the event of accidents or property damage. To avoid overinsuring your event, be sure to inquire about the liability insurance of all of your providers.

Additionally, Consult your homeowner’s insurance agent if the incident occurs in your backyard. Your policy’s liability protection may already be adequate for damage and injuries, but it excludes coverage for lost vendor deposits.

Final Thoughts

It is advisable to purchase adequate event insurance if you are organizing an event with a significant financial commitment and/or risk involved to safeguard both yourself and your company as the event organizer.

It’s practically impossible for any event to proceed exactly as planned, so prepare for the unexpected. On the other hand, most event venues no longer agree to bear total responsibility for property damage, and most vendors no longer provide complete reimbursements for postponements or cancellations.

In such circumstances, obtaining event insurance can provide you with peace of mind so you can focus on the more important things: organizing and hosting a successful event.

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