Special Event Insurance: Cost & Coverage

Special event insurance is a liability insurance policy for a business, vendor, or individual hosting an event. The policy provides coverage for injuries and damaged property, with additional options such as weather cancellation. Special event insurance is a one-time payment policy, with the average cost being $277.

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Special Event Insurance Costs

Unlike most policies, special event insurance is a one-time payment. Many policies don’t come with a deductible. But if they do have a deductible, it’s usually for the third-party property damage portion and will usually start at $500. Requesting a higher deductible will help lower the overall cost of the policy.

While a few providers will offer coverage up to 24 hours before the start of the event, many require advance notice. Keep the timeline of your event in mind while shopping for insurance.

Some venues require proof of liability insurance to book them. When looking for the right policy, ensure the carrier you choose can provide a certificate of insurance (COI).

Factors That Impact Special Event Insurance Costs

When shopping for special event insurance, be prepared to answer questions about the event, such as location, date, type of event, and what activities will be present. For example, will there be live animals or a dunk tank? Questions like these will influence whether the provider will cover the event and the premium amount. Other specific factors are:

• Limits: The above quotes are all for the same $1 million liability limit. Increasing the limit will increase the premium you pay. But for an important event, it’s worth it to have the added protection.
• Alcohol service: Are you selling alcohol or will a vendor sell it? While some event liability packages include liquor liability, some will require that you purchase liquor liability insurance as an added coverage.
• Expected turnout: The more people at your event, the greater likelihood that they’ll be injured.
• Type of event: The cost to cover a small holiday party for your business will differ from a three-day music festival.
• Length of event: The time of the event, including setup and tear down, will likely impact the cost of insuring the event.
• Structures: Are there temporary structures like large tents, stages, or a bounce house for your event? If so, understand that temporary structures increase the risk of injury and property damage and will impact your premium rate.

Special Event Insurance Coverage & How it Works

Hosting an event, especially with multiple vendors and alcohol, increases the chances of something going wrong. Special event insurance is insurance for the event host to be protected for hosting expenses and any potential liability that may arise during the event.

Event insurance usually has two core components built into the policy. These are event liability and event cancellation coverage.

• Event liability coverage: This coverage protects your business from claims arising from someone being injured while attending the event. For example, the host could be liable for her injury if Susie Snowflake slipped on some water and broke her ankle while at a business expo for mops. If, after watching her fall, the salesman with the ineffective mop kicked a hole in the wall of the rented venue, event liability would also cover the damage he caused.
• Event cancellation coverage: If your event is outside and a hurricane is forecasted or is inside, and forecasters predict a blizzard, you’ll have to cancel the event. Event cancellation coverage helps protects any nonrefundable deposits or loss of profits should the event be canceled.

Many providers offer additional coverages to add on, such as hired auto, contractual liability, or accident medical expense.

When planning your event, factor in when the coverage terminates. Providers may have a specific cut-off time for the event insurance. For example, Traveler’s coverage ends at 2 a.m.

What Special Event Insurance Doesn’t Cover

Special event insurance isn’t for every event. The range of what type of event is and isn’t covered varies by provider. Still, in general, the following usually aren’t covered:

• Gun shows
• Activist rallies or marches
• Organized protests
• Tractor pulls or other motorized events
• Haunted houses

As is the case when shopping for insurance if you’re honest with the provider about what type of event you’re hosting, the provider will be honest about whether they’ll write a policy for it.

Special Event Insurance for a Business

Businesses typically need special event insurance if they’re hosting and organizing the event. A general rule of thumb is you’ll need to purchase this coverage if the event you’re hosting is off-site or if the event is significantly different from your company’s daily operations. These events might be:

• Holiday party: if you’re hosting a holiday party with entertainment, caterers, and especially if there’s alcohol, you should consider event insurance.
• Company picnic: Everyone loves the annual company picnic with the bounce house and the family games, but that sack race could lead to a lawsuit if someone gets hurt.
• Fundraisers: Nonprofits often host a catered meal at an off-site location. With the cost of deposits and the potential for liability, the nonprofit should consider special event insurance.
• Employee retreats: Many companies will have a retreat for team building. However, many of the exercises at these events, such as the “trust fall,” are a liability nightmare. You’ll want to consider special event insurance if your company takes employees on retreats.

Hopefully, your business already carries a general liability policy. While that policy may cover some of these losses during a particular function, it’s best to check with your agent about the policy’s exclusions, limits, definitions, and listed locations.

Special Event Insurance for Vendors

If your small business will be a vendor at a special event, you’ll want to discuss with the host what insurance you may need. Generally, you’ll need liability insurance to protect your assets if a client or the venue owner accuses you of causing bodily injury or property damage. If, as the vendor, you’re serving alcohol, most special event policies taken out by the host will require the vendor serving alcohol to have a liquor liability policy and produce a COI.

Special Event Insurance for Individuals

Special event insurance isn’t just for businesses. Individuals may want to purchase a policy too. Especially if the individual has a lot of money invested in the event, such as a wedding. Wedding event insurance is probably the most common form of special event insurance a private individual will purchase.

As with special event insurance, wedding event insurance’s primary coverage is liability and event cancellation. Many providers offer additional coverage for jewelry, accessories, tuxedos, and wedding gowns. Remember that providers won’t cover cancellation if someone has changed their mind.

Beyond a wedding, other events an individual may want to purchase special event insurance for are:

• Bar mitzvahs and bat mitzvahs
• Quinceaneras
• Family reunions
• Retirement parties
• Anniversary parties

Bottom Line

If you’re a private individual or have a business planning to host a large event, you’ll want to look into special event insurance. Whether it’s for your special day or an important milestone in your company, you’ll want to know if anything goes wrong. It won’t be a problem you have to deal with because you planned and purchased the right coverage.

Check out CoverWallet for a quick quote online. Through this online brokerage, you’ll be able to compare the costs for your special event insurance and make the best choice for your business.

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