Coverage for Special Events
By Sue C. Quimby, CPCU, AU, CIC, CPIW, DAE – Vice President/Media Editor
The pandemic changed how people think about hosting and attending events. Many were cancelled. Some, such as weddings, were downsized or postponed. Others were impacted by government regulations. In such situations, special event coverage, in addition to a standard homeowners or businessowners policy, may be required to help in case of cancellation, or if there is injury to guests or damage to property of the venue or guests. Helping clients deal with the insurance exposures involved in hosting a special event is another value-added service of the professional insurance agent.
Accidents can happen no matter how carefully the event is planned. A centerpiece candle could set the table on fire. A guest who has had too much to drink might start a fight, damage property or cause injuries or damage on their drive home. Nobody can predict the future, and the peace of mind gained from having the right coverage is invaluable.
Standard homeowners policies provide some liability coverage for actions of unruly guests. Events that are held away from the homeowner’s residence may pose a need for additional coverage. Some venues require a certificate of insurance adding the venue as an additional insured.
Special events coverage comes in a variety of forms. Host liability coverage can include damage to or theft of property belonging to the venue or other guests, or bodily injury to guests or staff. Coverage can be scheduled to include the days before and after for events that include set up and clean up exposures.
Host liquor liability is needed if the event includes liquor that the attendees are paying for, such as a cash bar. Coverage for injuries or damage caused by those who have been served alcohol would fall under host liquor liability. Automobile liability insurance may be necessary if parking, either self or valet, or transportation is part of the event. Worker’s Compensation could cover injuries suffered by people hired by the host to staff the event. A certificate of insurance from caterers and others who provide staff for the event is also essential.
Event cancellation insurance has become more common due to the uncertainties brought on by the pandemic. It is not the same as host liability coverage, but they may be available in the same policy. Event cancellation coverage is designed to protect the investment in the event, including room rental fees, catering deposits, and other nonrefundable or transferable costs. The reason for cancellation is usually something outside of the host’s control, such as bad weather or deployment /of the bride or groom. There are even “change of heart” policies that protect parents or others who finance a wedding that is called off. According to The Knot’s Real Wedding Study, the average cost of a wedding in 2021 was $28,000, so the exposure is significant.
It is important to note that not all policies will respond to cancellations due to communicable diseases such as COVID-19. This coverage may be available as an option. As with any insurance policy, it is essential to read and understand what is covered, and, perhaps more importantly, what is NOT covered. In addition, insurers may require more health and safety procedures be in place.
Not all events or activities are eligible for special events coverage. Examples of excluded activities include trampolines, amusement devices, bungie jumping and fireworks. Sporting events may also have special exclusions or limitations. As with all policies, it is in the best interest of the insured to understand the exposures that are covered and excluded by their policy. Additional steps to take: Review contracts to see what fees may be transferable or refundable. Maintain a contact list for all attendees/invited guests to facilitate communication in case of cancellation or postponement of the event. Follow required health and safety procedures.
Weddings, events and parties should be times of happiness and excitement. Special events coverage can help ensure that they stay that way. Coverage is widely available and usually inexpensive. Helping clients understand how to protect their investments is another sign of the true insurance professional.
