As ten inches of rain fell, the state highway closed and attendees could not get to the wedding party venue. Reimbursed Amount: $25,000 for event cancellation coverage. This example shows how special event insurance helps protect your investment in a specific event by covering your costs when you unexpectedly need to cancel your event, such as a wedding, or if you’re found responsible for property damage or an injury caused during your event.
What is special event insurance?
Insurance usually protects you from a loss or damage to your property. Special event insurance protects your costs if you need to cancel or reschedule an event because of fire, weather, or other problems. The client’s insurance company pays some, but not all, of your expenses up to the total policy limit for a certain event type.
Special event policies may be written on an occurrence basis or on an occurrence plus liability basis. An occurrence policy pays only if the insured causes the loss and merits coverage because of the insured’s fault. An occurrence-plus-liability policy pays for losses incurred by the insured in all situations except those deemed unreasonable by the insurer, who has the ability to deny coverage under certain conditions and circumstances.
What can special event insurance cover?
For the protection of your investment in a specific event, such as a wedding, weather-related cancellations and natural disasters, such as hurricane, special event insurance may be significantly helpful. Most policies also cover cancellation due to the death, illness, or serious injury of a key event participant, such as the groom or a member of the groom’s immediate family.
It can also provide reimbursement for expenses if you, your invited guests or vendors must cancel or reschedule due to due to a cancellation, abandonment, interruption, curtailment, postponement or relocation caused by covered perils as defined in the policy as covered perils. Such coverage can also help protect you from liability costs if there’s an injury at the event or if an invited guest causes property damage during the event.
Who needs special event insurance?
Special events run the gamut – from weddings and social gatherings to corporate meetings and sales conventions, golf outings and concerts. As the host of these events, you’re responsible for paying for any cancellations or changes to the schedule. As such, special event insurance financially protects you from the situations that may lead you to cancel or reschedule your events.
In addition, special event insurance can provide liability protection for your business. If an invited guest or vendor causes property damage during an event or if there’s an injury during the event, liability coverage can help pay for expenses like legal costs, court fees and settlement payments up to the limits of your policy. For example, a guest at a wedding party moved an antique dining table, and two of the table legs cracked. Property Damage coverage paid the claim of $1,865.
What are some special event examples?
Special events range from large-scale business conventions and sales conferences to community celebrations and social gatherings. These events usually require a lot of planning and expenditures. In any type of event, special event insurance could be one of your best financial supporters.
Wedding
Who helps you pay for expenses if you need to cancel or reschedule your wedding because of fire, weather, or other things that are out of the ordinary? What else but special event insurance. Do it through an event helper, and it can cost as little as $105.
Weather
Special event insurance can help pay for expenses if you need to cancel or reschedule your convention due to weather-related reasons.
Example 1:
In Illinois, an RV dealer insured its clients’ outdoor RV Park and Event Center events, which included concerts. Special event insurance paid the claim so that the clients could reschedule their shows and save money on facility rental fees.
Example 2:
In another example, an insurance company insured a bank’s three-day seminar. The course was to be completely outdoors and there was only one day of suitable weather forecast for the event — and that was on the second day. The insured held the course during that day. Property coverage paid the claim of $35,000 for loss of revenue from cancellations; Vendor Legal Liability coverage paid the claim of $140,000 to vendors who were unable to attend because of weather conditions.
Other examples
Example 1:
Special event insurance helped in Texas when a church insured its annual gardening seminar and raffle, which was to be held on Easter weekend. The insured cancelled the event due to ice storms and hurriedly moved the seminar indoors, because of concerns about possible power outages caused by the storms. When it was all said and done, the insurer paid the claim.
Example 2:
Similarly, in Florida, an architect insured an Easter egg hunt at a shopping center that was scheduled for April 1. The insured had purchased an optional cancellation rider. When the event organizer was notified that some two dozen people had gotten sick at another Easter egg hunt, and the illness was being linked to a bacteria, he cancelled the event. The insurer paid $8,500.
Events that special event insurance does not cover
In the condition of endorsement, it is clearly mentioned that coverage under this policy does not apply to some cases:
- a. The special event insurance policy hardly covers consequential damages. This is a loss that occurs as a result of any insured risk or peril, such as fire, lightning, or vandalism.
- b. Damages that the insured could have avoided by taking reasonable precautions in the use of due care; and
- c. Damages caused by any one person or organization during a five-year period aggregating often more than $3 million.
In addition to this, some insurance companies also have a cap on the amount of claim they will pay.
As per the law, the liability limit should not exceed $2 million.
For special event insurance activities, there is an additional “organization” exposure, i.e., no more than $5 million exposure for any one organization within a five years period.
Anyway, you must keep in mind that general liability is only applicable to covered causes of loss as mentioned in the terms and conditions of this policy. However, some events may require additional coverage against non-covered causes of loss as well.
Conclusion
Before you host a special event, talk to your insurance agent about your concerns and what kind of coverage you need for your specific event. The right insurance coverage can help protect your investment in a party or celebration, a business meeting or trade show, or even an all-out private extravaganza.
It’s worth noting that most states restrict the outright cancellation of an event due to weather risks. However, it is legally acceptable to change the date or venue of an event due to weather risks; this would not be considered a cancellation. Your special event insurance policy should be designed to cover changing the date and venue of an event as well as canceling events due to inclement weather conditions.
[Note: Some of the aforementioned examples may be presented only to make readers grasp the intended meaning of a particular word, phrase, or concept, and may not be real-time events.]