What is Special Event Insurance?
Special event insurance is designed to cover the host’s financial losses and liabilities should problems arise during special functions. Wedding event insurance is the most common event coverage for individuals, but small business owners and nonprofit organizations may need it for store openings, fundraisers, and other events that are outside of their day-to-day operations.
Depending on the special event, hosts may suffer losses because of:
Cancellations – losses might include refunds for participants, lost security deposits, and permit fees
Participant’s injuries – losses might include lawsuits and the injured party’s medical bills
Alcohol-related accidents – losses can include the damage and injury an over-served party guest causes other people
Vendor issues – losses can include paying for a last-minute substitute
Bringing together large groups of people increases the chance for things to go wrong. As the host, you can be held responsible if a partygoer turns an ankle on the dance floor or the DJ’s amplifiers spark a fire. But you also have to consider your investment. If bad weather causes you to cancel an event, you’re still on the hook for money spent on deposits.
Event Insurance for Small Businesses
Businesses need event coverage when they host functions beyond their standard operations, like company picnics. Policies can be written to fit your particular event, but most focus on liability coverage. You can find one-day policies for under $100, but these usually limit the number of guests and don’t include coverages like liquor liability or cancellation.
Liability insurance pays for third-party claims of:
Bodily injury, like a guest’s injury during the company’s 3-on-3 basketball tournament.
Property damage, like a spectator’s smartphone being smashed during the company’s holiday party.
Wedding Event Insurance
Wedding event insurance has two main components: liability coverage and event cancellation. Liability coverage pays for people’s injuries and property damage, and event cancellation covers the costs that come with cancellations and postponements. Together, these policies cost between $100 and $300, depending on the number of guests.
You can also add host liquor liability to your wedding event insurance. It pays for damages an inebriated guest causes.
Here are a few events wedding event insurance typically pays for:
Guest injuries – like a slip-and-fall on the dance floor
Property damage – like a fire from a knocked-over candelabra
Cancellation costs – like non-refundable deposits, last-minute venue changes, or a ruined wedding dress
Damages caused by drunk guests – like a car crash on the way home
Finally, wedding coverage is the most common private event insurance people buy, but it isn’t the only kind that’s available. Individuals also insure bar mitzvahs, quinceañeras, baby showers, and other special events.
Additional Event Coverages for Small Business Owners
Event liability insurance only covers your liabilities when your business hosts a special event, but other problems may arise. For example, you may have to cancel an event that required tickets. Or you might have an offsite event. Some of these issues can be addressed with additional insurance.
Here are a few coverages small business owners might need when hosting an event:
Cancellation coverage reimburses you for nonrefundable deposits and out-of-pocket expenses leading up to the cancellation. Some even cover lost profits. However, most policies only cover cancellations when they are beyond your control, such as extreme weather or a vendor’s failure.
Liquor liability insurance covers damages caused by an over-served guest. Most states have laws that let someone injured by a drunk person sue the individual who provided the liquor. The injured person doesn’t have to be an attendee at your event. They could be a passenger in the drunk person’s car or someone the attendee meets after the event.
Inland marine insurance pays to repair business property damaged when in transit. Business owners who haul valuable equipment to an off-site event may need this coverage.
Hired and non-owned auto insurance covers your liability in cars your rent, hire, or borrow. For instance, if you send an employee to pick up lunch for your volunteers, HNOA covers your business if they’re in an accident.
Cancellation coverage and liquor liability are usually added to your special event insurance. Inland marine and HNOA can be purchased as a monoline or added to other coverages your business already has.
Tips on Getting Special Event Insurance
Whether you’re planning a wedding or an award ceremony for your top sellers, special event insurance protects your investment. Here are a few tips for getting the appropriate policy.
Check your current insurance policy
Before you buy event insurance, be sure to review your current coverage with an agent. Your general liability insurance may have enough coverage for small special events. Your homeowners or renters insurance might also cover liability for weddings hosted in your home. Plus, home insurance policies cover personal property, so damaged gifts and attire may be covered. However, you may still want to get additional liquor liability insurance for the added risk.
Read your rental contract
Some venues want to know you have insurance with the appropriate liability limits within a month of your wedding date. Others may want you to have coverage for setup and teardown dates. Knowing what you need sooner rather than later gives you time to compare policies.
Get your certificate of insurance
A certificate of insurance is a document that acts as proof of insurance. It lists key policy information, such as coverage dates and limits. Most venue owners want to see your COI so they know you’re meeting their requirements. Before you get your COI, talk to the venue manager. Some want special wording added, and you will need to make that clear to your agent.
Include additional insureds
Most venues require you list them as an additional insured on your event insurance. This gives them limited protection under your liability coverage. For example, the venue’s legal fees may be covered if your wedding turns into a fiasco that results in multiple lawsuits. Some insurers charge for each additional insured.
Similarly, you might want to require your vendors to name you as an additional insured. That way, you’re covered if their negligence causes damage.
Event Insurance Frequently Asked Questions (FAQ)
Below are a few of the most frequently asked questions about event coverage. If you don’t see your question, post it to our forum, and someone will get back to you.
Who needs event insurance?
Anyone hosting a special event can benefit from event insurance. This includes private individuals, business owners, and nonprofit organizations. Even people who don’t own businesses often get event insurance to cover their weddings and other special occasions.
What kinds of events does special event insurance cover?
Private event insurance is designed for invitation-only special occasions hosted by an individual. Weddings are a common example, but so are retirement parties, family reunions, and first communions. Business owners also need event coverage anytime they host activities that are outside of their day-to-day operations, such as conferences, fundraisers, and investor dinners.
Do I need wedding liability event insurance if I have a homeowners policy?
The liability component of your homeowners insurance may cover your wedding. That’s more likely true if the wedding is taking place in your residence. However, the cost of cancellations and liquor-related accidents may not be included.
Will wedding liability event insurance pay if my wedding is canceled?
Wedding liability insurance only covers your responsibility for property damage, physical harm, and paying legal fees and medical bills. Event cancellation insurance is separate from this. It reimburses you for costs that come from canceling your event, like nonrefundable deposits and last-minute replacement vendors or venues.
Does my business need event insurance if I already have general liability?
Most businesses and NPOs need unique coverage for special events. Most general liability insurance exclude activities associated with special events. Policies that don’t exclude special events may not have enough coverage for the increased risk.
Do I need special event insurance if I only host one event each year?
Business owners can get separate event coverage when they host multiple events, but most find that inefficient. The better choice is to get an annual special events policy. This way, all of their events are covered throughout the year. The dates for each event must be listed on the event insurance policy for coverage to be in place.
Considering most venues require a $1 million occurrence / $2 million aggregate liability insurance policy, special event insurance is a no-brainer. Even without that requirement, the risk for vendors to go bankrupt or severe weather to hit makes wedding event insurance plus cancellation coverage a smart investment.