Summertime Celebrations: Helping Your Clients Understand Special Event Insurance

Summer is a time for weddings, family reunions and other celebratory events. This year, as COVID-19 restrictions are lifted, we’ll likely see a record number of events this summer, as well as an increase in attendance. As a result, your clients will be looking to you, their insurance professional, to help them understand what their liability exposure could be for these types of gatherings and how event insurance can help provide protection. The following are commonly asked questions insureds ask when it comes to event insurance coverage.

Is event insurance necessary?

Most any venue (indoor or outdoor) will require some type of special event liability insurance. Even if the event is at a private residence, the homeowner can be sued for accidents and injuries that guests may incur. Advise your insureds to request insurance requirements and limits from their venue of choice as early as possible, so you have time to secure coverage and prepare a certificate of liability insurance.

What does a basic event liability insurance policy cover?

Special event liability provides protection against claims made by third parties for bodily injury, accidents or property damage that occurs during an event. Policies will differ among carriers and the types of event, but coverage is generally provided for:

  • Liability costs associated with an injury.
  • Legal costs for property damage caused by event attendees.
  • Cancellation coverage that reimburses a percentage of fees if the event must be canceled due to issues outlined in the policy.

What about coverage for alcohol-related risks? 

Be sure to ask your insured whether they will be serving or selling alcohol at their event. Remind them that if a guest drinks too much, they could be held liable. And while not all carriers include liquor liability insurance in a special event policy, most can add it or provide coverage under a separate policy. 

Will a homeowner’s general liability policy extend to an event held at the insured’s residence?

Most insureds assume that their homeowner’s policy will cover any liability claim issue that may arise when hosting a special event. The fact is, the liability limits on a homeowner policy might not provide enough protection for a large event — especially one where alcohol is being served. When discussing coverage for an event that is being held at your insured’s private residence, be sure to review their home insurance policy to determine whether the additional protection of event coverage is needed.

Are these policies expensive?

Most insureds will want to know the cost of event coverage. In general, a basic policy will run between $350 and $400. However, if liquor is being served, the premium could double. Before running a quote, be sure to get all the information regarding the event, such as whether alcohol will be served, how many people will be in attendance, the type of event, venue insurance limits/requirements, etc.

Conclusion

Special events are just that — meant to be special. Be ready to help your insureds understand the importance of having the right insurance protection so they can focus less on the risk and more on celebrating!

About FastrackCE

Need to complete your personal lines insurance continuing education credits this summer? FastrackCE can help you get all your life and health and property and casualty continuing education credits done in one place and at your convenience.

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