Party Down: Getting Special Event Insurance Coverage
Jeff Henderson July 22, 2015
When you or your business rents a venue for a special event, liability is a major concern for all involved. Many venues won’t do business with you until you provide proof that you’re insured for anything that might go wrong there—they want to be certain that if something does go wrong, they’re not the ones left holding the bag.
If you have an exceptionally generous business insurance policy, off-site events might be covered, but in the vast majority of cases, you’re going to need special event insurance. And even if you’re hosting an event on your own property, special event insurance might still be a smart investment.
The Basics Of Special Event Insurance
Whether you’re scheduling a small party for a few investors or an after-hours celebration of a successful job for your entire company, there will always be issues of liability behind the scenes. When you take your event to a venue owned by a third party, those issues become unavoidable; special event insurance becomes mandatory.
The specifics of a special event insurance arrangement can vary wildly according to what you expect at the venue. An event featuring alcohol, potentially dangerous entertainment, or simply a large number of people will require a very different policy from a dry, safe, small event at a local park.
At the most basic level, you should expect to be required to obtain liability insurance, plus liquor liability insurance if alcohol is being served. But certain venues may require more, or you may wish to expand coverage to safeguard against potential losses.
Things To Cover
There are many, many potential points of loss at a special event, but expanding your coverage can protect you against many of them. Consider obtaining coverage against:
- Cancellation or postponement
If something forces you to suspend the event, you may be able to recoup some of your losses. Inclement weather, no-show vendors, and other surprises can cost you thousands, so it’s best to be secure.
- Gifts or other on-site valuables
Have a gift exchange, an expensive technical demo, or other valuables on-site at your special event? Be certain that you’re protected against loss and theft, as many venues wash their hands of liability.
- Lost deposits
Sometimes, deposits aren’t quite in line with the risk at hand. For events where you stand to lose disproportionate deposits, coverage from a third party can be a great idea.
If extreme weather, uncooperative vendors, or any other problem arises—which could cost you real, serious losses—a thorough special event insurance policy can be a lifesaver. You also get to relax and worry less about these issues when you’re thoroughly covered; a less stressed organizer is a superior organizer, meaning your event will be a bigger success with a lower likelihood of actually needing to rely upon any of these policies.
Beware Of Going Cheap
If you find yourself hosting an event at a venue without strict liability insurance requirements—likely because you or another involved party owns the venue—don’t ignore the possibility of unexpected losses. Consider investing in special event insurance as a safety precaution for your own sake.
Consider this: Venues insist upon coverage to protect themselves against damage, liability, and other losses. Why would you forgo those same protections when your company becomes the one potentially at a loss?
Depending on the situation, of course, your business insurance or other policies may protect you against these issues and more, but it’s important to check and confirm without assuming. If a guest causes damage, or gets injured in some unexpected way, being on the hook without recourse can turn a special event from a boon to boondoggle in seconds.
Many businesses find themselves viewing liability insurance as an unnecessary drain on their coffers, a mandatory waste of funds enforced from on high, but this is an attitude for the fortunate. If your business ever finds itself facing the expense of a successful lawsuit without the protections of special event insurance, you certainly won’t be glad you avoided an extra expenditure.
Just be certain that you’re acquiring appropriate, thorough, secure coverage for your special events. Watch for gaps where you need coverage most, be certain that you’re covered for the unusual circumstances unique to your event, and don’t assume the bare minimum is enough—for anything. The minimum required by law or a venue isn’t necessarily your best investment as a company looking at potential long-term outcomes.