What do hurricanes, pandemics and pyrotechnic accidents have in common?

They can each derail an event, and insurance may or may not cover the resulting losses. That’s why it’s critical for planners to explore the world of event insurance. But insuring events can be a broad, multifaceted process. Planners may be wondering: What factors affect a policy? What are some common gaps that cause organizers to pay out of pocket? And who is responsible for holding various policies?

Here’s what three experts had to say about untangling the complicated process of insuring an event.

Types of Event Insurance

The most prevalent myth about event insurance is that it’s just one type of policy. In truth, good event coverage may end up looking more like a portfolio of policies.

“The term ‘event insurance’ can get annoying because it gets used in lots of different ways, and lots of people think it’s a generic thing,” said David Carbrey, president of Direct Events Insurance. “But often what people are talking about is special event liability.”

Special event liability is essentially like an auto liability policy — it’s tailored to the specific event at hand. It provides financial protection in case of things like damage or injuries during an event, but it’s highly specific, often reduced to certain hours surrounding the gathering. And many venues specifically require organizers to purchase it. Add-ons can provide additional coverage for transportation or other needs that aren’t automatically covered.

However, commercial general liability coverage — a form of business insurance that many third parties, including planning companies, often carry — can also be beneficial for events. Many of these policies can cover routine business functions, but there are often exceptions and exclusions that require additional policies for full coverage.

“It is best practice for a third party, or even a meeting planning company, to have their own general liability insurance because that covers their employees or anything that could be at risk in terms of employee errors,” said Dion Magee, senior project director at Magee Enterprises, a meetings, events and project management company. “It’s not event by event; it’s a yearly standard policy like everything else.”

There are other policy types for extremely specific risks, like weather insurance for an outdoor event. There are also event cancellation policies that will reimburse organizers if the event must be cancelled due to unforeseen circumstances like wildfires, civil unrest or a building becoming inoperable — Carbrey gave the example of a building’s elevators breaking down right before a rooftop event.

“You may have insurance, but do you have the right insurance?” said Roger Whyte, founder and principal of Stratus Firm, an event production firm. “Do you have the right level of coverage? All of those different elements are things that you have to think through, especially as you get into events that are multifaceted and larger.”

The bottom line for planners is this: Don’t assume the event is entirely covered by one policy, whether that’s a special event liability policy or a general liability policy. Planners should carefully review all their policies to make sure the event isn’t over- or under-insured. If they aren’t sure, they should ask their insurance experts.

Who Needs to be Insured?

It’s best practice for all stakeholders and participants at a meeting or event to have some type of coverage. That’s because when things go wrong, insurance companies will seek payment from every actor involved. Organizers and vendors alike will be asked to provide a Certificate of Insurance (COI) to prove that they hold the right insurance.

“It’s kind of like a ladder system,” Whyte said. “The client is at the top of the ladder, and then it goes to the event organizer, and then it would go the venue and vendors, and then it would go the smaller vendors that are underneath them. All of those coverages should support and protect each layer of that ladder.”

The event organizers or planners themselves often have general liability insurance and can add the additional layer of protection with special event liability, event cancellation or weather-related policies. And they’ll typically be asked to list the venue under the “additional insured” category on their COI.

The types of policies that venues carry vary based on their risk profiles — after all, outdoor concert venues have different risks than a hotel ballroom. Some may carry general property insurance and general liability, while others will also add liquor liability. 

But one area where coverage gaps frequently occur is vendors or suppliers.

“One of the bigger concerns I see is where vendors don’t present their insurance coverage or they just don’t have it,” Magee said. “They might think, ‘I’m just a photographer, do I really need insurance?’ The answer is yes.”

Insurance protects vendors from liability if something occurs at the event — for example, a guest is injured tripping over a piece of photography equipment. That’s why insurance should be a requirement for vendors to participate in the event, whether they’re a caterer, a photographer or an exhibitor. At large trade shows, that’s especially important.

“It’s not uncommon for event organizers to feel like it’s onerous to ask their vendors and exhibitors to have their own coverage,” Carbrey said. “They are worried that will keep them from having vendors and exhibitors. But the first time you have to pay a claim for somebody that is not part of your organization, you understand how it is not onerous to ask them to have this policy.”

That’s even true at events like festivals with mom-and-pop arts and crafts vendors. The good news is these policies are typically inexpensive and offer lots of coverage for a small (or nonexistent) deductible — it’s just up to the event organizers to make sure all vendors have their own coverage and that their coverage is sufficient.   

Insurance Logistics

Every policy is different, and each event has its own risk profile, so it’s worth repeating: Asking an insurance expert is the best way for a planner to ensure their event has enough coverage.

“Having a good insurance broker is really vital to making sure you get the coverage you need,” Whyte said. “We have an incredible broker who deals with all the different insurance companies, so we only talk to one person, and then that one person goes to all the different insurance companies and gets the coverages we need.”

A broker who specializes in event insurance is vital because of the sheer number of external factors that can influence a premium or create exclusions for a policy.

“High-risk activities like water activities, motorized vehicle events like racing events or cannabis-related events aren’t typically covered,” Magee said. “Sometimes planners invite attendees to certain things like that as part of the event, but they have to consider that their event insurance might choose not to cover things like that.”

Alcohol is another high-risk factor that some policies have exclusions around, which is why liquor licenses or separate liquor liability coverage may be required.

Another factor planners need to consider is when to purchase insurance; like many elements of event planning, earlier is better.

That’s especially true for event cancellation insurance.

“Once something gets in the news and gets reported on and has a name, it’s treated like a preexisting condition,” Carbrey said. “Once a hurricane gets a name and it’s in the news, you can’t get coverage against that hurricane.”