If a business organizes a party, fundraiser, or other event, special event insurance can provide liability coverage for the specified dates.
If your business holds an event that differs from its day-to-day operations, you may need special event insurance to cover the extra risks. Certain venues may even require it.
Special event insurance helps small businesses pay for unanticipated costs related to an event, such as an injury or cancellation fees.
You can typically add this coverage to your general liability policy. It could be one-day insurance for an event shorter than 24 hours, or insurance for an event that lasts several days.
Special event coverage protects a business’s investment in an event, such as the cost of renting a venue. It also provides event liability insurance for accidents that cause an injury or damage someone's property.
Specifically, a special event insurance policy covers the following types of claims:
If someone is injured at your business’s event, special event insurance coverage can help with medical expenses or legal fees if a lawsuit is filed against your business.
If an employee’s property is damaged at a company event, special event insurance can help pay for the cost of repairing or replacing the damaged item. This policy also covers damage that may occur to a venue during an event.
Extreme weather, scheduling problems, or other issues outside of your control could force you to postpone or cancel an event after you’ve hired a performer or booked a venue. Special event insurance can reimburse you for lost deposits and other fees – just make sure your policy includes cancellation insurance.
Event cancellation insurance also covers costs if a photographer, caterer, or other vendor cancels and you need to find a replacement.
Selling or serving alcohol at a company event increases the risk of an injury or accidental property damage. Special event insurance can help cover costs when an intoxicated guest causes harm. For this protection, make sure your special event policy includes liquor liability insurance.
If your business isn't profiting from the sale of alcohol, then the host liquor liability coverage included in your general liability policy may provide sufficient coverage. In either case, check with a licensed agent to make sure you're covered if you intend to allow alcohol.
Special event insurance benefits businesses across all industries when they hold a special function such as an awards ceremony, a company picnic, or a team-building event. You can customize the amount of coverage to match your needs, or extend protection to the venue by including it as an additional insured.
Vendors sometimes buy this coverage as well, for short-term protection while they offer their services or products at an event. Depending on the venue, businesses and vendors may need to show a certificate of insurance (COI).
Business owners in the following industries in particular often need this coverage:
Nonprofits depend on fundraisers such as walkathons, bake sales, dinners, and galas. However, these events can be a huge liability. A polar plunge participant could develop hypothermia and file a lawsuit, or a nonprofit might have to pay cancellation fees when bad weather cancels a walkathon.
Special event insurance gives you peace of mind by making sure you won’t lose money due to a mishap or canceled event.
Special event insurance can cover costs if an employee breaks a leg during a golf tournament and sues your company, or if someone's cell phone gets damaged at a beach picnic.
If your business involves planning weddings and other events, such as fundraisers, or bar and bat mitzvahs, your need for special event insurance may depend on the venue location. Some reception halls won’t provide liability coverage for hosts or wedding planners.
For events held in someone’s home, their homeowner’s insurance might not cover the event or offer enough liability coverage—especially if the event is a fundraiser or involves alcohol.
Photographers and videographers who provide services for the occasional wedding or other events may want to invest in special event insurance.
For example, one-day wedding insurance could protect your photography business if someone trips over your equipment and suffers an injury, or if your camera gets damaged at a friend's big day. A venue may also specify that you need to carry this coverage.
However, professionals who face these risks as part of their everyday work should invest in general liability insurance and inland marine insurance to protect against customer accidents and damaged equipment.
For example, a restaurant or banquet hall might cater a few wedding receptions each year in addition to their everyday business operations. Special event insurance would cover the venue's liability for any accidents, such as a hot plate that overheats and starts a fire.
Though special event liability insurance covers many risks outside the course of your normal business operations, it won't cover excessively dangerous risks. Your policy likely has exclusions for high-risk activities such as:
While special event coverage can be an important part of your risk management plan, you should consider these other small business insurance policies to fully protect your business from financial losses:
General liability insurance: Covers common business risks like customer injury, customer property damage, and advertising injury. It protects your small business from the high costs of lawsuits and helps you qualify for leases and contracts.
Commercial auto insurance: Required in most states for businesses that own vehicles, this policy covers your legal bills, medical expenses, and property damage if a business vehicle is involved in an accident.
Hired and non-owned auto insurance (HNOA): Provides liability coverage for accidents involving personal, leased, or rented vehicles used by your business.
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To get a quote for general liability insurance today, fill out Insureon’s free online application. A licensed insurance agent can help you add event insurance, along with any other types of coverage you might need.
Here are a few terms to know when you purchase special event insurance, if you're concerned about a possible cancellation:
Rainout option. Your special event coverage likely includes a rainout option – but you can't use it to cancel an event. It only lets you postpone your event, and even then, the event must be postponed prior to the event date.
Fully earned premium. Special event insurance is a fully earned (nonrefundable) premium. Your insurance company considers the entire premium earned the moment the policy is put in place. That means you won't get a refund for your premium if the event is cancelled.
Cancellation coverage. When it’s available, event cancellation coverage usually requires an additional fee. Even then, many insurance companies offer it only for personal events, like baby showers and birthday parties.
However, some policies will cover a lost deposit or event postponement regardless of the reason behind it. Contact an insurance agent if you're interested in learning more about what is included with special event insurance coverage.