When you’re planning a special event, you put extra effort into imagining everything that could possibly go wrong. Staffing problems? You’ve got that covered. Technical issues? You’ve got a point-person for that (and a backup point person). As the big day approaches, though, it’s normal to worry that there are still some things out of your control: someone could get hurt, someone’s property could be damaged, or the whole thing could get cancelled at the last minute.
Whether you’re planning your company’s annual awards ceremony or a brand-new festival to show off local artisan’s crafts, you have to prepare yourself for the risk that a natural disaster, labor strike, or even a performer’s no-show ends your event before it’s started. Likewise, you want to protect yourself from liability in the event that there is bodily injury or property damage.
So how do you get prepared? Three words: special event insurance. This short guide explains what it is, who’s eligible, and whether or not you need coverage.
What is special event insurance?
Special event insurance is a specific kind of insurance designed to protect one day events.1 There are two kinds of insurance you may want to consider for your event:
Event cancellation insurance: This kind of policy can help you recoup costs in a situation where your event is canceled or postponed, or that a specific item you purchased for your event is damaged.
Event liability insurance: This kind of policy can help protect you in the case that a client or third party suffers from property damage or bodily injury during the course of your event.
So which one do you need? Does your regular insurance policy already cover some of these instances? To understand your needs, we’ll discuss both types of policies.
Event cancellation insurance 101
If you’ve invested a significant sum of money in planning your event, you may face financial losses if it’s canceled. After all, you’ve already given deposits to vendors, printed brochures, purchased decorations, and sought out the help of professionals like caterers and DJs.
While some of these expenses may be refundable, there’s still a lot on the line. You may stand to make a profit from your event through ticket sales, on-site sales, or raffles. If your event is canceled, you won’t just lose your investment—you’ll miss out on potential profits, too.
Event cancellation can help you recover your nonrefundable expenses, your lost revenue, and the costs of rescheduling the event.2 It is designed to protect against a wide variety of worst-case scenarios like the following:
- The power at your venue goes out, which means the lights won’t work, much less the microphones needed for your speakers
- Your venue is vandalized, and it becomes an active crime scene on the day of your scheduled event
- A natural disaster or fire renders your site unusable or inaccessible
- In the wake of a terrorist attack, it’s unsafe for attendees to venture to your venue
- A labor strike affects the city’s transit, making it impossible for attendees to access your event site
- A disease outbreak like COVID-19 leads to the government shutdown of events like the one you’ve planned
What’s not covered? It all depends on the specifics of your policy. However, in general, event cancellation insurance is designed to protect the planner’s financial stake in the event. It does not protect against potential lawsuits brought by clients and third parties. That’s where event liability insurance comes in.
Event liability insurance 101
Event liability insurance is designed to protect planners in the case of bodily injury or accidental property damage that may occur during the course of their event. Most venues will require that you have this kind of insurance, and when you sign your rental contract, you’ll take on contractual liability (such that any injured party has the right to sue you rather than the venue).
What could go wrong at your event? No matter how carefully you plan, a situation like the following could leave you liable:
- The guests at your charity event go a little too wild at the open bar and damage part of the venue
- You’ve failed to imagine what might happen to the marble dance floor in the event of light rain. Unfortunately, someone slips and falls, injuring themselves
Event liability insurance can help to protect you from this kind of liability.
When do you need special event insurance?
It’s worth considering getting event cancellation insurance if you’re putting on an event that costs a significant amount of money to plan or could lead to a loss of revenue if cancelled. Meanwhile, event liability insurance can protect you if someone is injured or their property is damaged at your event.
But wait! You might say. I already have liability insurance for my business. Doesn’t that cover me if my business is event planning? The answer is: it depends.
If you do have a general liability insurance policy, it provides coverage against claims of client or third-party property damage, personal and advertising injury, and bodily injury.
However, the liability your business takes on when planning a large event may not be covered by your current policy. That’s one reason why event liability insurance policies exist.
General liability protects you from client and third-party claims. It does not protect you from personal loss (as the policyholder, you’re the “first party”). Therefore, it likely cannot help you if your event is cancelled or postponed.
Get insured: Ready, set, go
If you’re reading along and realizing that you don’t in fact have the insurance you need to conduct your day-to-day business free from risk, much less your special events, it’s time to get covered. Thimble offers general liability insurance and professional liability insurance for small businesses. With hourly, daily, and monthly policies, it’s easy to get the coverage you need, when you need it.
We’re on a mission to simplify insurance, provide flexible coverage, and make policies easy for everyone to understand.
When you’re planning an event, you have enough on your mind without worrying about “acts of God” and acts of vandalism. To protect your peace of mind as you prepare for your big day, consider:
- Event cancellation insurance to protect against losses in case the event is postponed, rescheduled, or cancelled
- Event liability insurance to provide coverage in the case of client or third-party claims of bodily injury or property damage
- General liability insurance to protect your business every day, not just during your big event
As a planner, you can prepare for most scenarios. Let your insurer cover the rest.
Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.