When you are planning a special event, you put a lot of time and effort into ensuring that everything goes right. You are also likely to have significant upfront financial expenses. But how much thought do you put into planning for what could go wrong?
No one wants to imagine a less-than-perfect occasion, but it’s a reality that needs to be planned for. And, as a social host, you assume certain legal responsibilities, such as the safety and welfare of your guests, as well as for their actions and behavior during, and sometimes after, your event. If a caterer, band, or other vendor you’ve hired causes harm or property damage related to your event, you may be responsible for that as well.
Insurance Backup When Hosting Special Events
Special event insurance exists to protect your assets and provide legal representation if your event is held directly or indirectly responsible for someone being injured or for property being damaged. Special event insurance also protects your financial investment in planning and executing the event itself. Unlike homeowners, auto, and other types of insurance, special event policies are limited to the specific event date(s) and times, and may be extended to cover a certain period before and/or after the event.
“You assume risks for people and property when you’re a host — especially if alcohol is involved,” said Kristin Ryan, a Trusted Choice independent insurance agent with Hanson & Ryan Inc. in Totowa, NJ. “Depending on the scale of the event, you may also make significant upfront investments, like deposits for reserving a venue, caterer, and entertainment. Special purchases, like a wedding dress, may also require upfront payments. Special event insurance policies can be crafted to protect against risks specific to each particular situation.”
Special Event Cancellations and Postponements
The greatest concern for individual, groups, and businesses who have planned, or are planning, a special event is the risk associated with cancellation or postponing an event.
Cancellation or postponement coverage provides reimbursement for financial losses or expenses incurred due to canceling or postponing your event for reasons outlined in the policy. Severe weather (hurricane, dangerous heat, snowstorms), damage or destruction of the venue, and non-appearance of a vendor or key performer are common named causes covered in policies. Other causes may also include military deployment if the host, an immediate family member, or active event participant — such as the officiant — is called for duty, or an act of terrorism.
Additional costs that may be covered in a special events policy include:
- Photographer/videographer: Reimbursement for expenses related to retaking photographs or video due to a no-show vendor or lost or damaged to files prior to delivery.
- Special attire: Covers the loss or damage of attire for a special event — for example, if a wedding dress is burned while being professionally pressed.
- Special gifts: Gifts that are purchased specifically for the event that become lost or damaged may be covered. In this case the policy may pay to replace or repair the item. Similarly, monetary gifts that get lost, or possibly stolen, during the event may be covered up to a certain dollar amount.
- Special jewelry: Protects wedding rings or other event-related jewelry if they are lost or damaged either during the event or for a specified period of time before and/or after the event.
- Counseling: Pays for emotional counseling recommended by a physician for up to one year following the cancellation or postponement of the event.
Personal Injury/Property Damage
Regardless of the unique details of the event you’re planning, when you bring together a larger-than-normal group of people, personal injury or property damage are your biggest risk exposures. Even if you are ultimately not held responsible for personal injuries or property damage, “the costs of defending yourself can be excessive,” said Ryan.
Liability Coverage under an Existing Insurance Policy?
While it’s always worthwhile to check, general liability on your current homeowners policy is likely to contain restrictions and exemptions (number of individuals on property, provision of alcohol, etc.) that could limit or exclude coverage. Depending on the scope of the event — number of people, duration, and planned activities, for example — liability limits may be too low. “If you’re having a couple over for dinner and you serve wine, that’s something your home liability insurance is intended to cover. Special event coverage is more for when you have larger groups of people — sometimes over 20, usually over 50 people,” said Ryan.
Even if some liability coverage will be provided under your existing insurance, Ryan usually recommends getting a separate special event policy. In most cases you will find that you are better off having event liability insurance that is specifically tailored to cover your situation. “Any claims on the special events policy won’t affect your homeowner’s rates. It’s completely separate. A lot of people are hesitant to put in a claim so their rates don’t go up, but with a policy that’s for a specific event, it’s not going to follow you,” she said.
Assuming Risk at Rented NJ Special Event Venue
If you’re renting a venue, you may have to sign a contract with the facility transferring the liability and risk from them to you. It is probably that the venue will hold you responsible for damages to the premises caused by outside vendors you hired for your event. For example, if the band you hired damages a wall with their gear, or the caterer burns part of the carpet but they don’t have liability insurance, you may be personally liable for repairs or replacements without a special events insurance policy.
New Jersey Host Liquor Liability Coverage
Under New Jersey law, anyone who is injured or whose property is damaged by an intoxicated person has the right to sue the individual(s) who “provided” the alcohol. “Provided” can mean served by a hired bartender, served by you, guest self-service, and even pertain to alcohol that guests bring for themselves. Host liquor liability lawsuits and expenses are substantial and could include criminal charges. “If you do provide alcohol, the safest thing to do is to be sure your special event insurance includes this exposure,” Ryan recommends.
NJ Special Event Insurance Costs, Coverage Eligibility
“There is a lot of misconception about the pricing of these policies and most of the time they are fairly inexpensive,” said Ryan. “Special event insurance policies can start from $200 depending on how many people you’re having at the event and the exposures. The biggest risk comes in if you’re serving or selling alcohol. That can affect the price.”
Other factors that can affect policy pricing include:
- The nature, length, and location of the event
- Activities planned — whether there are activities that can involve injury to spectators
- Provisions for crowd control
- Operation of amusement rides
- Vehicles or other motorized equipment
- Whether food will be provided or sold
- Involvement of outside vendors (whether they have valid proof of their own insurance)
- Limits of liability being requested by the venue
- Policy deductibles
The more complicated or involved your event may be, the further ahead you should think about purchasing special event insurance. "In some cases," said Ryan, "it’s possible to write a policy as soon as the day before. It can be a very easy turnaround if you don’t have a lot of complicated exposures.”
Peace of Mind
Of course, the ultimate goal when purchasing special event insurance is hoping that you never have to use it. Simply knowing you have the coverage if something beyond your control disrupts your event or plans has its own value.
While Ryan’s agency receives requests for special event insurance from individuals who are throwing an event at their house or at a pool club, they see a lot of associations buying the policies too. PTAs, for example, will purchase a special event policy to cover their fundraisers or sporting events. And of course, weddings are a big one. “That’s what we probably see the most of," said Ryan.
To find out about special event insurance options and purchasing coverages specific to an event you are planning, contact an independent insurance agent like Ryan who can provide quotes from different insurers for you to compare, so you can find the coverage you need at a price you can afford.