Founder and Executive Director Matt Alcobia gives motivated talent a leg up in the music industry with his San Diego label.
At any special event or show, the possibilities of things that could go wrong are seemingly endless. Add large groups of people, expensive decor, caterers, alcohol, and a dance floor? You’ve got a recipe for a good time (or, well, disaster). Whether it’s stage failures, vendor issues, or attendee injuries, every type of event has its own risks.
Fearing such legal fiascos, many event managers and companies come to the conclusion that event insurance might be a worthwhile investment. However, they encounter a slight hitch when they realize just how many different types of event insurance there are. If you’ve been there, you probably know you need insurance, but first, you need an easy-to-understand breakdown of what you’re buying. Let’s do it!
Types of event insurance
From lawyer fees to medical bills, the right event insurance policy will ensure that you’re safeguarded from liabilities. But which is the right one?
We’ll dive into each of the following policies which are worth considering for your event:
- General liability
- Professional liability
- Inland marine
- Special event
- Liquor liability
- Event cancellation
- Workers’ comp
- Commercial auto
- Hired/Non-owned auto
General liability insurance
Every event management business needs general liability coverage. This overarching type of insurance policy shields your company from risk and helps deal with the various risks that might occur to a third party, including:
- Bodily injury
- Property damage
- Medical bills
Imagine if a hanging speaker fell from the stage and injured attendees, sending them to the hospital. What happens if they sue you for bodily injury and medical expenses? A general liability insurance policy could help mitigate the consequences.
Professional liability insurance
Professional liability insurance is a type of policy that helps protect professionals when their clients claim they’ve acted negligently. In simpler English: if a client claims that they lost money because you didn’t do your job correctly, you might be sued. This is why professional liability is also known as errors and omissions insurance (E&O).
Having a professional liability insurance policy in place can help protect against the fees involved with settling the incident. In many cases, these are legal fees.
Inland marine insurance
Inland marine insurance, also known as commercial inland marine insurance, is a type of policy that works to cover property or equipment that is transportable, movable, or transfers information. It’s what’s known as a “floater” policy, which means the coverage goes wherever the equipment goes.
Being that events often require the transportation and use of equipment, this type of policy could help protect you from the risk of property damage. Typically, commercial property insurance will only provide coverage if damage occurs in the location(s) listed in the policy. However, inland marine insurance offers more flexibility, as it can protect your equipment outside of wherever you do business (or what’s listed on your commercial property insurance policy).
Special event coverage
Also known as one-day event coverage, this is a type of umbrella policy that protects a business from all sorts of potential claims. That said, it’s only meant for certain types of gatherings and celebrations, such as:
- Religious ceremonies
- Charity events
- Baby showers
- Birthday parties
Typically, public events aren’t included on the list. Instead, they must be private or closed off to some degree.
Liquor liability insurance
Do you plan on serving alcoholic beverages? If so, a liquor liability policy is a must-have. As mentioned, few factors increase risk and liability as much as booze. If people have too much fun and end up in the hospital, or if underage guests are accidentally served alcohol, a liquor policy could help cover you from being held accountable for damages caused by alcohol-related accidents.
Event cancellation insurance
You never know if a performer is going to get sick and have to drop out at the last minute. Bad weather could shut down a music festival. Construction issues at the event venue could crop up that impact crowd safety. Each one of these scenarios represent tens of thousands of dollars lost and many attendees leaving angry. A cancellation insurance policy would help you deal with deposits you’d previously put down or reimbursing guests for their tickets to the show.
Event cancellation policies protect you from lost revenue or other expenses in the following circumstances:
- Unforeseen weather conditions
- Power failure
- Performer cancellation
- Performer abandonment
Some of these policies may also cover public liabilities, like patrons being injured or property being damaged.
In the event that you employ workers to manage the occasion, you’re legally obligated to purchase workers’ compensation (unless you’re located in Texas, the Wild West). Even if those employees are only part-time, you’ll need it. Otherwise, should an accident occur—a slip, a fall, or any other injury—you could leave yourself and your business exposed.
With workers’ comp, should a work-related injury occur, your employees are protected from the lost wages and medical costs associated with on-the-job injuries during an event. And, as a small business, you’re protected from the medical expenses associated with on-the-job injuries. It’s an insurance policy that can help both employer and employee in the case of a workplace accident that results in an injury.
Commercial auto policy
If your business has vehicles that are owned and used by the business, whether to chauffeur people around or carry equipment, you’re going to need a commercial auto policy. In fact, most states legally require you to have coverage that protects the people driving the vehicle, third parties, and the automobile itself (from property damage).
Hired/Non-owned auto liability
Similarly, if you rent or use your own personal vehicle to conduct business, you’ll need to get your hands on a hired/non-owned auto liability policy. In most cases, the standard auto insurance policy you probably already have won’t cover your personal vehicle if you’re using it for business purposes.
Although it may be unlikely that such a nightmare will occur, there is a little-known niche event policy that would protect you from liability in the event of a terrorist attack. It is typically split into three types of coverage:
Limited terrorism – Covers forced cancellation resulting from an act of terrorism within a specific vicinity of the event and within a certain timeframe. Usually, this is restricted to 50 miles and 50 days.
Full terrorism – Covers forced cancellation arising from a terrorist act without limits. So, were an incident to occur in LA, causing planes to be grounded for days and an event on the other side of the country to cancel, the costs could be covered.
Political violence and terrorism – A separate coverage that covers things such as:
- Civil commotion
- Malicious damage
So, for the cautious, a policy like this might be worthwhile.
Waiver of subrogation
Although it’s not always necessary, some vendors will request that you provide a waiver of subrogation. This is meant to shield them from liability and prevent your insurance company from going after them, the vendor, should something bad occur at your event.
If signed, the vendor can’t be sued by your insurance provider, even for negligence.
Coverage for your event with Thimble
If you’re throwing an event, you’re going to want event insurance. And if you need a general liability insurance and professional liability insurance policy, you’re going to want to go with Thimble. With our pay-when-you’re-working structure, you’ll only pay for the time when the event is occurring.
Click “select a quote” or download the Thimble app, answer three questions, and purchase coverage in less than 60 seconds. Think you might have to cancel the event? No problem. You can cancel our policies, penalty-free, up to an hour prior to when the terms begin. With Thimble, you can get to work knowing we’ll help protect you from liability, create a policy specific to your event, and that it’s more affordable than anywhere else.
Now that’s something worth throwing a party about.
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.
Driven by a desire to be their own bosses, Sarasota couple Jose Aguilar and Maite Montagut get their feet wet in the pressure washing business.