This policy protects a business’s investment in an event, such as the cost of renting a venue. It also covers third-party property damage or injury up to your coverage limits.
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.
Example: An employee at your consulting company breaks a leg on a zip line during a team-building challenge. The employee sues your business to recoup medical expenses and wages that were missed during recovery. Special event insurance can help cover the cost of legal negotiations, a settlement, and other costs.
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 helps cover damage that happens to a venue during an event.
Example: You organize a picnic for a team-building event at your advertising agency. One of your employees brings an expensive personal stereo system. Another employee knocks it over during the party and breaks it. Special event insurance could help with the cost of purchasing a replacement stereo system.
Inclement weather, scheduling problems, or other issues outside of your control could force you to cancel an event after you’ve hired a performer or booked a venue. Special event insurance can help you get reimbursed – just make sure your policy includes cancellation insurance.
Example: Months in advance, your IT consulting firm booked a ballroom at a luxury hotel for a senior consultant’s retirement party. At the last minute, the honoree comes down with the flu. Though you’re forced to cancel the event, special event insurance helps you recover the money you spent on the venue.
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 harms another person or someone else's property. To gain this protection, make sure your special event policy includes liquor liability insurance.
Example: Your real estate agency hosts a happy hour networking event to attract new clients. One employee overindulges, falls, and breaks her leg. Special event insurance can help cover her medical bills or the cost of hiring a lawyer if she decides to sue.
If your company is hosting a high-risk event, such as a 5k run, start researching insurance well in advance as it might be difficult to secure coverage.
Special event insurance usually excludes communicable disease coverage, such as COVID-19 (coronavirus). However, some policies will cover a lost deposit or event postponement regardless of the reason behind it.
Here are a few terms to be aware of when you purchase special event insurance:
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, cancellation coverage is usually extra. And even then, many insurance companies offer it only for personal events, like weddings. Promotional events for companies and nonprofits are typically excluded.