‘Tis The Season—Do You Need Special Event Insurance?

Plans for the holiday season and especially for the big blowout bash of January 1st are, no doubt, well underway with arrangements having been made for the location, caterer, band, and invitations, but has any thought been given to the purchase of special event insurance? Probably not. Insurance is usually an afterthought if any thought is given to it at all. Special event insurance can be purchased for both private and corporate events.¹ The following is a snapshot of special event insurance for private events just in case there is a planned January 1st festivity—it’s not too late to purchase special event insurance.

What is Special Event Insurance? It is exactly what its name implies—it is an insurance policy of short duration that provides coverage for the party host of a one day or weekend event, and can be purchased on line, relatively cheap, the day before the event.² Simply put, it helps protect an individual’s investment in a specific event, such as that upcoming New Years’ party, or wedding, birthday party, or retirement party. Specifically, it can help cover the party host for costs if there is a need to unexpectedly cancel the event (cancellation event insurance), or if the host is found responsible for property damages or for an injury that occurred during the event (liability event insurance).³

“Special Event Insurance” is an umbrella term for different types of coverage. The special event insurance purchased depends directly on the liability exposure based on factors such as: 1) the number of people in attendance; (2) how the space will be used or the type of the event to be held; (3) whether alcohol will be served; (4) the age of the participants; (5) whether private security will be used; (6) how long the event will last; (7) the type of entertainment to be provided, if any; and (8) whether temporary structures such as tents, stages or booths, will be used.⁴ The key to choosing the correct policy, is to obtain a policy that matches the event’s needs such as by check-listing the above factors and considering other factors that may be directly relevant to the particular event.

For private events, the two most common types of event insurance purchased are liability insurance and cancellation insurance with alcohol liability insurance coming in a close third. These types of coverage are sold by most major carrier and can be sold as one policy or sold separately.

Event Liability Insurance is the most common event insurance purchased and covers personal injury or property damage to others as a result of the event. Some venues (where the event is to be held) require the event host to have a minimum amount of event liability insurance or they won’t host the event.⁵ Many venues require coverage between $500,000 and $2,000,000,⁶ but given the short duration of coverage involved, the cost of a special event insurance policy is a bargain.

Cancellation Insurance, as its name implies, provides coverage for expenses—reimbursement—arising from delay, rescheduling, or cancellation due to unforeseen but covered events, such as if: (1) inclement weather develops and your event is outdoors, (2) a sudden illness or injury of a member of the band you have hired or a member of the wedding party such as the groom or bride suddenly occurs which requires a postponement—the rescheduling costs may be covered, or (3) a service provider such as a photographer, caterer, or florist, fails to show up which might require a last-minute replacement and the costs associated therewith would be covered.⁷ Some insurers will sell event cancellation insurance as a separate coverage or it can be a provision in a liability policy.⁸ An important caveat regarding cancellation insurance is that it only springs into action if the cause is beyond your control.⁹

Liquor Liability Insurance, as its name implies, provides coverage for an event holder who charges for alcohol and then is sued for bodily injury or property damage caused by an intoxicated event guest. Such insurance would also cover accidentally serving alcohol to a minor. If money changes hands and alcohol is served, liquor liability coverage will protect a party host from most unforeseen occurrences caused by the consumption of alcohol.¹⁰

It’s not too late to procure special `event insurance for a New Years’ blast. Looking on line, there are advertisements that say special event insurance can be purchased in three (3) minutes for an event the following day. Well, it is something to think about at least.
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¹ See https://www.wikihow.com/purchase-event-Insurance
² See https://www.naic.org/documents/consumer_alert_event_insurance.htm
³ See https://www.naic.org/documents/consumer_alert_event_insurance.htm
⁴ See https://www.thebalancesmb.com/what-is-sopecial-event-insurance-4151090
⁵ Id.
⁶ See https://www.thebalancesmb.com/what-is-sopecial-event-insurance-4151090
⁷ See https://www.naic.org/documents/consumer_alert_event_insurance.htm
⁸ See https://www.thebalancesmb.com/what-is-sopecial-event-insurance-4151090
⁹ See https://blog.tito.io/posts/event-insurance
¹⁰ See https://www.wikihow.com/purchase-event-Insurance