Why Do I Need Special Event Liability Insurance?
So you’re holding an event and the venue wants you to getInsurance… 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 thatyou can fully understand what is being required of you.
People have been renting places to hold their events as longas there have been places to rent, so why are you suddenly being required toget insurance for yours? There are several reasons, but one is simply that theVenues have been holding events at their facilities long enough now, to haveexperienced losses that caused their own insurance to increase.
Whether from a slip and fall or from someone damaging afloor 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 theincrease in their own annual premiums. This makes it more expensive for eventorganizers to hold their events, and cuts into their profit margins as well, soyou can see how costs from losses caused by claims filed against the venues’insurance policies can snowball, affecting the prices of everything across theboard in the industry.
They realized that the current model was unsustainable so anew 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 namedInsured on the Policy. This particular type of Liability coverage has been craftedto specifically fit the needs of Event Organizers, based on research across thenation, that has determined what the most common perils are, associated withSpecial Events.
Thanks to this industry innovation, Venue owners can nowmaintain their own Insurance but avoid being held liable for the exposuresassociated with their various clients’ events.
How does it work? The policy is written to accompany arental contract between the Event Organizer and the Venue Owner. The EventOrganizer is the Insured and the name that appears on the rental agreement orcontract, 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 theduration of the event. This allows that the Liability Policy will extend thecoverage, for the designated period, to the Venue, who is then issued a copy ofthe Certificate of Insurance, on which they are now a designated CertificateHolder and Additional Insured.
While annual policies are sometimes available, these policies are typicallywritten on a single-event basis, and most people rarely need this kind ofinsurance, so there is little risk of premium increases, unless of course, aparticular insured is in the business of holding events – and if that is thecase, they can and should, work in conjunctions with industry experts, toensure that they coordinate their events in a responsible manner that helps toreduce the chance of multiple claims, which could make it more expensive and/ordifficult to get coverage for their future events.
Because these SEL Policies are ultimately, Liabilitypolicies, they will not cover any damages not caused by the Insured. SoVendors, Exhibitors, and Subcontractors (such as Caterers, Security Firms,Stage and/or Lighting companies), are all required to have their own insurancein place, naming the Organizer as Additional Insured, for the duration of theevent.
In the case of Caterers/Vendors/Exhibitors, policies havebeen crafted to suit their needs as well. The coverage is limited to theirbooth space and as already mentioned, they should ALWAYS name the EventOrganizers, and if required, the Venue owners, as Additional Insured.
Arranging this properly ensures that everyone is covered by their own LiabilityPolicy, for their own negligence and helps to prevent any gaps in the coveragefor which the Event Organizer might otherwise be found liable.