Why you should cover your event?
An event is a happy occasion, mostly involving a celebration or starting something new or a wedding or a concert. The list goes on. Any event typically has these elements – a venue, number of guests, gifts and other items, vehicles for guests and other purposes, caterers, liquor, staff for servicing the guests etc. An event also has a specific date and time and venue. So, what is the need to get the event covered with an insurance that is specifically meant for event coverage?
When so many elements are involved there is a lot of likelihood that things may not happen the way you want it to happen. From weather causing the event itself to be cancelled to a guest or a staff getting injured in a fall. A portion of the venue could get damaged due to the mistake of a staff. One of the guests could become drunk and cause injury to himself or a bartender.
In certain extreme cases there could be attack by terrorists on certain events. We hear of this more and more even when the people conducting the events, or any others involved have no reason to be targeted. Terrorists target events just for the sake of scale or destruction and the huge publicity they get.
So how do you insulate yourself against the losses that may occur. The venue can sue for damages if their place is damaged. A guest may file for compensation if he is injured during the event. The general liability cover of the company hosting the event may not be enough to protect all the players in the event. An injury to bartender hired by the planner for that event may not be protected against injuries unless it is caused by the company. A mistake by a vendor of a gift may not be covered.
Venues you hire for the event could get damaged during the event. Events involve a lot of people and there are all possibilities that they cause damage to the venue. How does the owner of the venue protect himself against this? As you are the one who is renting the place it is your responsibility to compensate him for any loss that occurs during the event.
Some event planners don’t take up a project unless they and others involved in the event are protected from injuries and loss during the event.It is the planner’s responsibility to see that the people hired by him are protected. He also has to ensure that the contractors and their laborers are protected from injuries and loss. If they are assured of their safety, they will be readier to work with the planner.
What is the way to get all the people involved in an event protected from damage or loss during the event? Is there any one insurance policy that will cater to the needs of an event planner or holder?
The basic type of insurance for a particular event is a Special Events Commercial General Liability policy.
A Special Events Commercial General Liability (CGL) policy protects the sponsor or holder of a public or private event. This policy comprehensively protects against bodily injuries, damage to property or personal injuries. It will also protect against damages due to supply of liquor like serving liquor to an under-aged person or someone getting injured due to intoxication – if the liquor is not sold for cash.
Some of the CGL will compensate for the loss caused by a vehicle you have hired for this particular event.
A Special events CGL will make up for the loss you suffer if your photographer doesn’t turn up for the event in the last minute and you are forced to spend extra for hiring a new one suddenly.
A CGL will help you cover the loss of deposits or other fees if the event has to be cancelled. It will also help you with costs for rescheduling of the venue, caterers and other associated with the event.
You could also purchase a special cancellation insurance which will cover all the expenses you incur due to the cancellation of the event. The reasons could be many – the main performer doesn’t arrive, a hurricane occurs, an earthquake, a fire at the venue or terrorism. It covers a wider range of expenses in the event of a cancellation, than the CGL covers. The reasons of cancellation that are permitted differ from company to company.
It is better to check the CGL thoroughly to know what all will be compensated in the event of a cancellation or postponement.
Most CGL policies insure you for attack by terrorists.
But the CGL comes with a lot of limitations which the insurers who sell such policies are only well aware of.
This is where the need of a special event insurance is felt. It is a CGL that comes with certain special provisions. These don’t come readymade. They are purchased with the particular event in mind. They have special clauses which may be necessary for thatparticular event.
Most events come with a lot of attached factors. They include large number of people attending and watching the event. Some events have rides and games in them. Other events may include music and theatre. The event is further affected by the schedule of the event, the weather at that time and the budget available for the event.
The event holder also has to enter into a contract with the owner of the premises and may be burdened with the responsibility of the premises and the even operations. Any claim on this front may be too much to bear.
Event holders are responsible for the safety of the guests, employees and volunteers present at the event.
Considering all the above the event holder or the sponsor have to purchase an insurance specifically meant for that event and will protect him from loss in any eventuality. While it is not possible to cover all the risks, an analysis should be done to make a good decision.
Though the Special Events CGL covers many things broadly there are some items which are excluded by the insurance provider. We will see below what are these items which are excluded.
TEMPORARY STRUCTURES – Many events require temporary structures like stages, tents, barricades etc during the event. Insurance don’t cover any damage or bodily injury which may happen when the structure collapses while being set up by your employees or volunteers or contracted laborers. It is better to give the work to tenting and staging companies and ensure that the have the necessary insurance to cover any damage.
SEATING, FIXTURE AND GLASS – The CGL provides for property damage of a third-party which is hired for the event, if the lease is less than 7 days duration. However, such coverage excludes fixtures, seals and glass. These are likely to be damaged in case of concerts. This responsibility cannot be transferred to a third party. It should either be covered in the lease of the property or you have to ensure the damage is limited.
INJURIES DUE TO LIQUOR CONSUMPTION – Bodily injuries or damages to property are a common result of excessive liquor consumption. People tend to be excessively intoxicated in group events and parties. The CGL covers such damages if the insured doesn’t sell the liquor and make a profit.
However, if liquor is going to sold in the event the CGL will not cover any losses occurring due to that. In such cases it is better that the liquor distribution is entrusted with a third-party. You should also ensure that they have the necessary liquor liability policy. Additionally, they can be asked to include the event holder to be included in their policy.
You can also purchase a separate liquor liability policy.
LIVE PERFORMANCES – Live performances are places where a host of damages occur. There are damages to property. There are also scuffles and fights which may result in bodily damage to the audience. There could also be serious damage to the expensive music and audio instruments. There have been many instances where extensive damage to property and people have been reported. Hence these are not included in most CGL policies. Special policies at very high premiums are available to cover these events. However, there are conditions which you have to follow for the policies to be effective. These include installing of metal detectors and hiring security guards to pat-down the visitors.
ATHLETES AND SPORTSPERSONS – Most policies don’t cover injury to any athlete or sportsperson participating in a game, contest or exhibition. There is a high possibility of athletes and sportspersons getting injured during the game / event or practice. They could make a big claim on the event holder for the injuries suffered. The CGL does not provide for any compensation. Some of the companies even consider dancing and cheerleaders as athletes and exclude them from the policy.
Separate policies with these terms written should be purchased. The price will vary with the extend of risks involved in the event. Medical accident insurance for each of the participant may also be made a pre-condition.
ASSAULT AND BATTERY – Bodily injuries to visitors or others due to assault and battery are not covered under the CGL. Event holders can take the service of specialised security guards to prevent such occurrences and subsequent claims.
INJURIES TO CONTRACT LABORERS – Many CGL policies don’t cover injuries to laborers of outside contractors who may be hired for work in that event. Ideally the laborers should be covered by the workers’ compensation insurance. But this is not the case always as many contractors don’t have this insurance. In such a case it is better to ensure that the CGL policy you take should include these contract laborers.
While holding an event it makes sense to take every detail into account and buy your insurance policy accordingly. It is also necessary to involve all the parties involved – like the owner of the venue, the caterers, the vendors and others, when making this decision. You need to find out what sort of the coverage these people have before you can finalise your policy.
While on the topic it makes sense to know what is waiver of subrogation. When you go for an event insurance it will include your vendors, caterers or other third party who are part of the event. Some of them may demand that they be given a waiver of subrogation. What does this mean?
If there is an occurrence that leads to payment of compensation by the insurance companies, they are likely to find out the reason for the loss or damage. In many cases the loss for which they compensated could have been the result of the actions of any of the third parties involved. The insurance company can sue this third party to claim the amount they have paid as compensation, because the fault lies with that third party. When the third party has got a waiver of subrogation included for them, it prevents the insurance companies from suing them, even if they are responsible for the loss or damage.
Weddings are events too. And they are special. There is a need to insure for many things that may not be a matter in other events. In a wedding the wedding dress and jewellery are very important. Any loss or damage to these would be a great matter of sorrow. And a wedding cannot go on without these. You need to insure these so that there is a provision to buy a new one suddenly. What if your photographer didn’t turn up to capture that magic moment. Getting a new one at that moment will be more expensive. And you could lose the deposit that you paid for the earlier one. Venues could suddenly be unavailable due to an eventuality. Finding a new one and paying them should be covered by the insurance. Event gifts also need to be covered under this policy. So, you need to check the policies and see that these are all covered when you go for a Special Event insurance for a wedding.