How To Get Insurance Coverage so Your Business Can Hold Special Events

Whether you’re arranging a corporate retreat, planning a business conference or organizing a trade show, you will want event insurance to cover liability claims that surface during the event. In addition, this type of coverage can cover expenses incurred if you have to cancel the event due to unforeseen circumstances.

Read what coverage is available for event insurance and how to get covered.

Key Takeaways Event liability coverage provides protection for bodily injury and property damage caused by guests. Non-refundable deposits along with any payments made toward vendors may be reimbursed if your event is unexpectedly canceled. Venues may have specific insurance requirements, such as general liability, workers’ compensation and liquor liability. Trade shows, book signings, and business conferences are examples of events that can be insured. The cost of event liability insurance can be as high as $235, and the cost for event cancellation can be $130.

What Is Event Insurance?

Event insurance, also known as special event insurance, provides liability protection for businesses organizing a company event such as a holiday party or corporate retreat or a commercial event like a concert or speaking event. It can even cover costs related to unexpected cancellations.

Note: event insurance is also available for non-corporate events such as weddings, birthday parties and graduation.

When Is Event Insurance Required?

If your business books a private venue to hold a special event, the venue will often require you to carry event insurance. Although you usually sign a hold harmless agreement that releases the venue of liability, the event insurance requirement ensures you can pay for liability claims that surface during the event, such as slip and falls or drunken altercations.

You may also be required to purchase special event insurance with specific coverage limits if you hold your gathering at a government facility, such as a recreation center or state park.

The city of San Diego, for example, requires anyone using government sites to carry the following coverage types and limits:^[1]

• Commercial general liability: $2 million per occurrence, $4 million aggregate
• Workers’ compensation: $1 million

How Does Event Insurance Work?

Event insurance offers two broad categories of coverage: the first is liability during the event. As an example, let’s say you booked an event hall for your company holiday event. Depending on what coverage you buy, your event insurance policy can pay for the repair or replacement or medical bills in the following instances:

• One of your employees knocks over a candle, spilling hot candle wax on a fabric couch
• A drunken employee punches a waiter and breaks their nose
• Somebody spilled their drink but nobody cleaned it up and a guest slips and breaks their back

Moving onto the second type of coverage: event cancellation. Let’s say an F5 tornado is expected to hit the venue and you have to cancel the event. Event insurance can help you get reimbursed for your security deposit and other venue fees, as well as certain costs incurred if you decide to reschedule the event.

What Types of Coverage Do I Need To Host an Event?

While the type of event you're hosting may dictate the coverage you get, you should at least ensure your event coverage policy shows event liability insurance and event cancellation insurance. If you’re serving alcohol at the event, then you should also carry host liquor liability insurance. Hired/non-owned auto liability coverage is also a good idea if you hired vehicles that you rented specifically for the event.

You may also need to have workers' compensation and you should double-check if your employee injuries sustained at work events outside the office are covered.

What Is Covered by Event Insurance?

While specific coverage can vary depending on the policy and insurance provider, here are some common areas typically covered by event insurance:

• General liability: This coverage includes public liability coverage and protects against bodily injury or property damage claims made by third parties attending the event, such as slip and falls or damaging the venue’s furniture.
• Cancellation or postponement: If an unforeseen circumstance forces the cancellation or postponement of the event, event insurance can provide coverage for financial losses incurred due to lost deposits, venue fees and other related expenses.
• Event interruption: If the event is interrupted or cannot proceed as planned due to factors beyond the organizer's control (e.g., extreme weather, power outage), event insurance may cover expenses and losses associated with rescheduling or partial cancellation.
• Non-appearance: If a key individual, such as a performer or speaker, fails to appear at the event due to circumstances beyond their control (e.g., illness, travel disruption), event insurance can cover related expenses or losses.
• Vendor or exhibitor: Some event insurance policies cover vendors, exhibitors or third-party businesses participating in the event. This may include protection for their property, products or liability arising from their involvement in the event.
• Host liquor liability: If the event involves the service or sale of alcohol, event insurance can cover alcohol-related incidents, such as accidents or injuries caused by intoxicated attendees.

In addition, it is advisable to purchase an excess liability plan to further the coverage limits of your primary policy.

What Isn’t Covered?

Insurance typically does not cover risks that are known or foreseeable at the time of purchasing the policy. For example, if you plan an outdoor event during hurricane season and a hurricane disrupts the event, it may not be covered.

Your policy will also not cover a poor turnout. So, if an event has low attendance, resulting in financial losses, event insurance likely won't cover these circumstances.

Some insurance policies may also exclude coverage for losses related to communicable diseases or pandemics, such as cancellation or disruption due to a COVID-19 outbreak.^[2]

It's also worth noting that you should thoroughly check out any potential venues as your insurance policy may not cover any additional losses resulting from pre-existing damage. Imagine a venue with a mold problem that keeps attendees away.

And remember, any illegal activity that causes a financial loss to you or damage to the venue will not be covered by your event policy.

How Much Does Commercial Event Insurance Cost?

The cost of commercial event insurance will largely depend on what coverage you buy and limits you choose and is typically a one-time payment. According to Geico, event liability insurance can start at $75 for $2 million in coverage, while event cancellation coverage can start at $130.^[3]

In addition, the type of event being insured will affect your cost. For example, insuring a wedding can cost $370 and up — lower if there is no alcohol being served because you will not need host liquor liability insurance.^[3]

Keep in mind that there may be a time frame for when you can buy event insurance. Geico requires that you buy event liability coverage at least 14 days before the event, while event cancellation coverage is 15 days prior.^[3]

Who Needs Event Insurance?

Event insurance needs to be purchased in order to meet your venue's insurance requirements. These requirements aside, coverage should also be purchased for any large personal or corporate gatherings wherein many people are gathered.

• Company events: These could be company beach cookouts or holiday parties. It isn’t unusual for alcohol to be served at company events, meaning there is an increased liability risk.
• Business conferences: Large networking events can present liability risks due to the number of attendees present.
• Trade shows: These are often held at hotels or local convention centers. Extra risk is added in such places due to the number of attendees as well as the vendors who have booths promoting their brands or products.
• Concerts: Music venues attract large amounts of people. Couple that with the fact the alcohol is served during what is essentially a giant party and you see why having liability coverage would be needed. There is also the possibility that a concert could be canceled if it's an outdoor event due to adverse weather conditions.
• Book signings: Authors can hold book signings virtually anywhere, making the potential risks sizable. Consider your venue and plan accordingly.
• Speaking events: Ted Talks and motivational speakers tend to be held in auditoriums, gathering thousands of listeners, which in turn means someone can get hurt or damage property.

Event Insurance for Personal Gatherings

Special event insurance isn’t for individuals either. Individuals and consumers may want to buy insurance for big events such as:

• Weddings: Weddings have unique risks due to the flexible nature of venue choices. They can be held at art galleries, museums, public parks, rec centers, synagogues, churches, temples or mosques, necessitating event liability coverage in particular.
• Birthdays: Party halls, private rooms and rec centers are all possible locations for celebrating birthday parties each with their own associated risks.
• Graduations: These events aren't usually large, but it is not unheard of for those graduating high school or college to have parties thrown to honor their achievement. Most students who graduate college are of drinking age so you can expect alcohol consumption at such events.^[4]
• Reunions: Whether it's a high school or family reunion, there is the chance of something getting broken or the venue being unavailable for any number of reasons.
• Religious celebrations: Perhaps you're on the fourth day of Diwali, attending the communal prayer on Eid al-Fitr or perhaps you're holding an Easter egg hunt. Where there are people, there is liability exposure.

What Are the Risks of Hosting an Event Without Proper Coverage?

Not having an event liability policy or event cancellation policy can open you to financial loss should an event attendee cause damage to the venue or if the event is forced to cancel. In one event you would be required to pay for any damages caused out-of-pocket. In the other event, any deposit you paid to the venue could be lost.

How Do I Get Event Insurance?

To obtain event insurance, you can follow these general steps:

1. Identify your insurance needs: Determine the type of event you are organizing and the specific risks involved. Consider factors such as the event size, location, duration, activities and the value of property or assets involved.
2. Research insurance providers: Consider their reputation, experience and customer reviews. You can search online, ask for recommendations from event organizers or consult with other businesses in your industry.
3. Contact insurance providers: Provide them with detailed information about your event, including the type, date, location, number of attendees and any unique aspects.
4. Compare coverage and quotes: Review the coverage details, limitations, exclusions and policy terms provided by different insurance providers. Make sure you understand what is covered and what is not so you can make an informed decision.
5. Customize your policy: Work closely with the insurance provider to tailor the policy to your specific needs. They may offer additional coverage options or suggest modifications based on your event's characteristics.
6. Provide necessary documentation: This may include event contracts, permits, venue agreements and other relevant paperwork.
7. Review and sign the policy: Seek clarification for any unclear aspects and make sure you fully understand the terms of the insurance contract. Once satisfied, sign the policy and purchase coverage.
8. Obtain proof of insurance: This document indicates that your event is insured and may be required by venues, vendors or other parties involved in the event.