Whether you are the event planner or the event host, there are potential financial risks that have to be taken into consideration when evaluating your insurance portfolio.
Planning, organizing and hosting an event has lots of moving parts. Venues to be booked, caterers to hire, ticket sales – it’s an endless list of logistics. You may be concerned about injury to guests, accidental damage caused by a third party vendor or guest to the venue. No matter how well the event is planned and managed, there are often circumstances beyond your control that can lead to severe financial loss. Luckily, there are a number of products that can provide protection for the event host or planner.
The various types of event insurance are:
- General liability
- Host liquor liability
- Errors and Omissions liability
- Event Cancellation – in person events, virtual and hybrid events
- Caterer’s Liability
- Sport Event liability.
Event Insurance can be purchased via an annual policy or for a specific event and your broker can assist in finding the right coverage for your operation. Typically, this type of insurance is written through insurance companies that specialize in this area of coverage.
Let’s take a look at the various coverages that you should consider in order to protect your business operations.
General liability provides coverage for bodily injury, property damage to third parties and should include tenant’s legal liability and contractual liability. This type of insurance responds to slip and falls on the premises that you are renting for the event, or if you or your guests should cause property damage to the premises.
Host liquor liability – this type of coverage can either be included in your general liability policy or as an add-on to the coverage if you are purchasing for a specific event. It specifically protects the business should a guest at an event consume too much alcohol and causes property damage or bodily injury. Even if you are holding the event at a conference site, hotel, etc, when applying for the insurance, questions will still be asked with respect to who is serving, do they have smart serve, are you required to get a liquor permit.
Errors and Omissions provides coverage for suits brought against the organizer should there be a financial loss. For example, due to a miscommunication the facilities get booked for the wrong date resulting in a financial loss to the client. Even if you are not at fault, there can be substantial legal costs to defend these lawsuits and can be debilitating to the business. Not only from a financial stand point, but also the loss of focus when being involved in a lawsuit.
Event Cancellation can cover when events are cancelled, postponed, relocated, or interrupted by a cause beyond your control. Some triggers for this coverage are weather events, natural catastrophes (flood, quake), power failure, public transit failure, denial of access, strikes, terrorism, the inability of a keynote speaker to perform or attend. As a result of COVID-19, there are now a broad range of activities that can be covered under event cancellation insurance as virtual events have become more commonplace. If a virtual or hybrid event is cancelled due to a transmission failure, certain cyber incidents, these types of policies can provide first party losses for the organizational expenses, revenue losses, advertising expenses and ticket sales.
Caterer’s Liability provides coverage should someone get sick as a result of consuming your food, injures themselves if they trip over a piece of equipment, or burn themselves on a hot chafing dish.
Sport Event Liability includes general liability for the host of the sport event as well as coverage for injuries for participants in the sports event.
A number of factors are taken into consideration when the insurer is quoting on the cost for event liability: the type of event, the number of participants, whether or not alcohol is being served, are subcontractors to be included, the length of the event, location of the event, are you looking for an annual policy to cover multiple events or just a single event.
Failure to purchase event liability could not only have serious financial ramifications to your business but also reputational damage. Reach out to your insurance broker to tailor the coverage to your specific needs.
Karen Ritchie is a senior vice president and joint venture partner with Baird MacGregor Insurance Brokers and Hargraft Insurance Brokers LP. She is a past president of the Toronto Insurance Council.