So you’re holding an event and the venue wants you to get Insurance… And they want to be named on the Policy… “What does this even mean?” you are probably asking yourself.
Well, that’s why I’m writing this little article, so that you can fully understand what is being required of you.
People have been renting places to hold their events as long as there have been places to rent, so why are you suddenly being required to get insurance for yours? There are several reasons, but one is simply that the Venues have been holding events at their facilities long enough now, to have experienced losses that caused their own insurance to increase.
Whether from a slip and fall or from someone damaging a floor while setting up a table, over time, this starts to cut into their overhead, so they may have had to increase their rates, in order to compensate for the increase in their own annual premiums. This makes it more expensive for event organizers to hold their events, and cuts into their profit margins as well, so you can see how costs from losses caused by claims filed against the venues’ insurance policies can snowball, affecting the prices of everything across the board in the industry.
They realized that the current model was unsustainable so a new product was created by the Insurance providers: Special Event Liability.
Like any other Liability Policy, Special Event Liability (SEL) insurance will cover damages caused by the negligence of the named Insured on the Policy. This particular type of Liability coverage has been crafted to specifically fit the needs of Event Organizers, based on research across the nation, that has determined what the most common perils are, associated with Special Events.
Thanks to this industry innovation, Venue owners can now maintain their own Insurance but avoid being held liable for the exposures associated with their various clients’ events.
How does it work? The policy is written to accompany a rental contract between the Event Organizer and the Venue Owner. The Event Organizer is the Insured and the name that appears on the rental agreement or contract, should match the name that appears on the SEL Insurance Policy.
The contract will require the Event Organizer (The Insured)
to name the Venue Owner on their SEL Policy, as “Additional Insured” for the
duration of the event. This allows that the Liability Policy will extend the
coverage, for the designated period, to the Venue, who is then issued a copy of
the Certificate of Insurance, on which they are now a designated Certificate
Holder and Additional Insured.
While annual policies are sometimes available, these policies are typically written on a single-event basis, and most people rarely need this kind of insurance, so there is little risk of premium increases, unless of course, a particular insured is in the business of holding events – and if that is the case, they can and should, work in conjunctions with industry experts, to ensure that they coordinate their events in a responsible manner that helps to reduce the chance of multiple claims, which could make it more expensive and/or difficult to get coverage for their future events.
Because these SEL Policies are ultimately, Liability policies, they will not cover any damages not caused by the Insured. So Vendors, Exhibitors, and Subcontractors (such as Caterers, Security Firms, Stage and/or Lighting companies), are all required to have their own insurance in place, naming the Organizer as Additional Insured, for the duration of the event.
In the case of Caterers/Vendors/Exhibitors, policies have
been crafted to suit their needs as well. The coverage is limited to their
booth space and as already mentioned, they should ALWAYS name the Event
Organizers, and if required, the Venue owners, as Additional Insured.
Arranging this properly ensures that everyone is covered by their own Liability Policy, for their own negligence and helps to prevent any gaps in the coverage for which the Event Organizer might otherwise be found liable.