What Is Special Event Insurance?
Special event insurance protects organizers from legal claims of property damage or bodily injury that arise from events, like fundraisers or trade shows. Special event insurance costs depend on the type of event. Coverage for an event with 100 attendees starts at about $120 for $1 million of coverage and a $1,000 deductible.
Sometimes, the growth of your small business can hinge on the success of a specific event. You might be hosting a grand opening, conference, class, trade show, fundraiser, or popup. Alternatively, you might work in the event planning industry and regularly host these types of functions. In either situation, you’ll need adequate small business insurance to protect your company if something goes wrong with your event.
Special event insurance can be critical to your business’s protection if you face a small business lawsuit because of property damage, accidents, or injuries that occur during the event. In this guide, we’ll explain what special event insurance covers, typical exclusions, the cost of premiums, and where to buy this type of coverage.
Do You Need Special Event Insurance?
Any business that sponsors events, even on a one-time or occasional basis, opens itself up to legal risks. Event organizers work under varying conditions of location, budget, time, and weather. Plus, planning a good event takes time, and you have to coordinate people, resources, and equipment. In that environment, it’s possible for an attendee of your event to get injured or for their property to be damaged or lost. To protect yourself against legal claims arising from an event, you should buy special event insurance. This insurance needs to be purchased before the event occurs.
Special event insurance protects your business against third-party claims of bodily injury or property damage arising from your event. Depending on the type of coverage you purchase, you also can protect your company against claims arising from alcohol sales or get reimbursed if you have to cancel or postpone your event.
Sometimes, buying special event insurance isn’t optional. The owners of an event venue will often include an indemnification clause in their contract with an event holder. This passes liability to the event holder in the event of a lawsuit and requires the event holder to purchase special event insurance. Your contract with the venue will state the specific coverage requirements that the venue owner requires.
Even if you already have general liability insurance or a business owners policy for your business, special event insurance fills gaps in coverage. For instance, most general liability policies exclude protection for temporary structures, claims arising from liquor sales, and certain types of events (e.g., those involving fireworks displays). Before you host an event, it’s important to check with your general liability carrier if they will cover you. If not, you should purchase special event insurance.
What Special Event Insurance Covers
Special event insurance must be purchased before an event occurs, and you’ll need to purchase a new policy for each event that you host. Coverage might vary for different types of events.
Normally, you can expect a special event insurance policy to cover the following:
- Legal claims of bodily injury, such as slip and fall accidents
- Legal claims of property damage to the venue or neighboring property caused by event staff or attendees
- Liquor liability coverage
- Cancellation coverage
The last two items listed—liquor liability insurance and cancellation insurance—don’t come standard with every special event insurance policy and sometimes needs to be added on at an extra cost.
Liquor liability coverage protects event hosts who provide or sell alcohol on the premises. For example, let’s say you are hosting a product launch event for your VIP customers and are providing alcoholic beverages. If a customer drinks at your event and then causes a car accident on the way home, the injured individual could sue your business. Many states have social host laws that impose liability on anyone who provides alcoholic beverages to guests. Many states also recognize dram shop laws that impose liability on sellers of alcoholic beverages.
A type of insurance called cancellation insurance covers fees, lost deposits, and other charges if your event gets cancelled due to unforeseen circumstances, such as bad weather or a vendor going bankrupt. Make sure you check with your insurance carrier about this option, as many only offer this coverage for personal events like weddings.
To prove that you have adequate coverage for your upcoming event, you’ll typically need to provide a certificate of insurance to the venue owner. Depending on your contract with the venue, you might have to name the venue owner as an additional insured in your policy. This means your policy will cover the venue as well in the case of a lawsuit.
What Special Event Insurance Excludes
Special event insurance generally excludes coverage for the following:
- Adventure sports like skydiving
- Aircrafts/drone activity
- Amusement park rides
- Events involving animals
- Events involving firearms
- Events with live performances of rap or hip-hop—these types of events can be insured at a higher premium
- Fireworks displays
- Injuries to your employees—employee injuries can also be covered by workers compensation insurance
- Legal claims by independent contractors—independent contractors and subcontractors should have their own workers compensation insurance policies in case they’re injured during an event
- Legal claims by sports or athletic participants—spectators who are injured at events generally are covered by event insurance, but athletes must purchase an athletic participation policy
- Rodeo events
Keep in mind that special event insurance policies are date-specific. If the date of your event changes, you need to contact your insurance carrier and amend your policy to reflect the new date. Otherwise, the carrier could deny coverage based on the fact that the claims didn’t occur during the policy period.
Cost of Special Event Insurance
The cost of special event insurance depends on the type of event, the size, and the location. The cost to insure a small business event with 100 attendees starts at about $120 for $1 million of coverage and a $1,000 deductible. Adding optional coverages, such as liquor liability coverage or cancellation coverage, will increase the premiums.
The following factors will affect the cost of your special event insurance:
- Age and condition of the venue
- Length of the event
- Location of the event
- The amount of coverage you need
- Size of the event (number of staff and attendees)
- The size of your deductible, which is the amount of money you pay upfront for a covered claim before the insurance benefits kick in
- The types of coverage you need, such as liquor liability coverage and cancellation insurance coverage
- Type of event
You can figure out the amount of coverage you need by calculating your total event budget. You’ll want at least that much coverage. With the help of an insurance broker or carrier, you can calculate the estimated financial losses associated with a lawsuit as well.
Source: The Event Helper
Where to Buy Special Event Insurance
If you’re looking to buy special event insurance, we suggest starting with your general liability carrier to see if they offer coverage.
Earl Jones, an agent with Farmers Insurance, says, “Check with your existing business liability policy first. You might find that it costs little to nothing for the event coverage. Now, if the venue requires $1 million or more in liability coverage, your existing policy may not give that level of liability coverage. Then you may need an event policy. Also, if the event is out of the norm (e.g., a lot of alcohol, sports, fireworks, etc.) or if the venue says they want a separate policy, then get separate event insurance coverage.”
If you need to purchase a separate event insurance policy, we suggest going with one of the insurance providers mentioned below. We also recommend choosing an insurer that’s rated A or higher by AM Best. AM Best is a global credit rating firm that rates insurance carriers for their financial stability and is, generally, a useful resource if you’re wondering how to get business insurance. A carrier with a high AM Best rating is more likely to be able to pay out claims.
Here are our top recommended providers for special event insurance:
Markel: Best Overall for Business Events
Markel Insurance, which has an A rating from AM Best, has been selling special event insurance for more than 10 years. They offer both event liability coverage and event cancellation coverage. On the liability front, Markel Insurance policies provide up to $2 million in coverage for bodily injury and property damage. For just $50 more, you can add on $5,000 of event cancellation coverage. Liquor liability coverage is also available as an optional add-on.
In some cases, having multiple policies that cover the same claim can be problematic and cause disputes among insurance carriers. Fortunately, Markel guarantees that they will pay out first before any other insurance policy kicks in. They will also add the venue owner as an additional insured at no extra cost. Markel’s special event insurance policies start as low as $75. You can get started with an online quote on Markel’s website.
Nationwide: Best for Large Events
Nationwide is one of the most trusted names in insurance and a good choice for special event insurance, particularly if you’re planning on holding a large event or one that lasts for several days. They have an A-plus rating from AM Best.
You’re eligible for a Nationwide special event policy as long as your event has under 12,000 attendees, occurs on one or more consecutive days, doesn’t last for more than 10 consecutive days (excluding event setup and tear down), and is held at a single location that you don’t own. The special event policies from Nationwide feature zero dollar deductibles, which means you have to pay nothing upfront for a covered claim. Of course, the flip side of that is higher premiums. Nationwide partners with K&K insurance to provide special event insurance, and they will direct you to K&K’s online application form to get a quote.
Allstate: Best for Small Events
Allstate, an A-plus rated insurance carrier, is a good option for insuring smaller events. Allstate will insure business meetings, nonprofit functions, and corporate events. However, you’re only eligible if your event has under 500 guests. You need to purchase your liability policy no later than one day before the scheduled event and event cancellation insurance no later than 14 days before the scheduled event. You can buy both types of coverage as early as two years in advance. In order to get an Allstate quote for event insurance, you’ll need to find a local Allstate agent.
Insureon: Best for Nonprofits
Another option for special event insurance is Insureon, which is a marketplace for business insurance, not a direct carrier. Insureon partners with several A-rated insurance companies to help small business owners find insurance that meets their coverage needs and budget. They offer special event insurance for all small businesses, but are especially well suited for nonprofit organizations that are hosting one-day events. Insureon has licensed insurance agents who have experience working with nonprofits. They can talk with you over the phone about the best event insurance options for your company. Call an Insureon rep to purchase your special event insurance.
The Event Helper: Best for Last-Minute Event Insurance
The Event Helper makes it easy to buy special event insurance quickly, even if you’ve waited until the last minute. To use The Event Helper, your event should have under 5,000 attendees. Using their online quote form, you’ll provide information about the type, size, and location of your event. After that, you’ll instantly be able to see limits, exclusions, and final pricing for your policy. This is a DIY online option, so you should make sure to provide accurate details about your event. For example, if you’re holding a music concert but call it a talent show, your claim could be denied later.
When you purchase insurance on The Event Helper, you’ll instantly be able to access proof of insurance to provide to the venue. One downside is that you can’t remove liquor liability insurance, which could result in costlier premiums. You’ll also need to buy a minimum of $1 million in coverage. That said, buying special event insurance through The Event Helper is very low risk. You’re eligible for a partial refund if you change your mind before the event date and a full refund if the venue rejects the policy’s terms. The Event Helper partners with A-rated insurance companies to provide special event coverage.
Buying special event insurance for your next business event is a smart move. This insurance covers gaps in your general liability policy. It can provide peace of mind if something unexpected happens at your event, or if your event gets postponed or cancelled. Fortunately, special event insurance is relatively affordable and easy to purchase. Next time you’re planning an event for your business, make sure purchasing special event insurance is at the top of your to-do list.
- Nolo.com. “Social Host Liability Laws and Lawsuits Over Alcohol-Related Accidents“
- NCSL.org. “Dram Shop Liability State Statutes“
- Allstate.com. “What Is Event Cancellation Insurance?“