Event Insurance Questions – Event FAQ’s

Event Insurance Questions & Event FAQ’s
Event Insurance Frequently Asked Questions
By: Event Insurance Quote

What is Special Event Insurance? 

Special Event Insurance is a policy that covers your client’s business assets when they host activities that fall beyond the scope of their General Liability Insurance coverage. Special Event Liability Insurance is a specialty insurance policy designed to indemnify the named insured and/or host / honoree from certain types of claims arising from accidents taking place during the event. Subject to the specific coverage terms, conditions and exclusions, it offers protection for the host / honoree for damage to the facility caused by a guest or vendor, bodily injury to guests they are found liable for, and alcohol-related accidents they are found liable for.

What types of events are covered?

For underwriting purposes, a lot goes into the definition of a “special event.” Basically, special events are short term activities your client sponsors or hosts that are outside of their normal operations. For example, your client may host a black-tie dinner, a 5k fun run, or week long conference. All of these are special events that could be covered with Special Event Insurance. We can write anything from a concert to a private birthday party and everything in between.

Special Event Insurance FAQs

Is property covered under a general liability policy? 

The general liability policy excludes property that you own, rent, borrow, or property that is in your care. This exclusion exists because if you do have property that fits this description, there are separate property policies that are available to insure such exposures.

What type of property does the general liability cover? An example would be a patron whose clothes are damaged when he trips and falls over an exposed sound cable you have improperly laid for your event. Because this property (his clothing) was not owned, rented, or borrowed by you, or in your care at the time of the damage, the general liability policy would pay for the damages to these items.

An exception to this exclusion is Fire Damage Legal Liability which is included in most general liability policies. This is applicable to property damage, by fire, for a premises/space you rent or lease.

Do I need liquor liability insurance?

You do if you are selling, serving, manufacturing, furnishing or distributing beer, wine, spirits or alcohol at your events.

The standard general liability policy excludes liquor related claims if you are in the business of selling, serving, manufacturing, furnishing or distributing liquor (alcohol, beer, wine, spirits, etc.). This exclusion applies even if you are “in the business” temporarily (example a 1 day event where liquor is served), and it applies even if you don’t make a profit from the sale of liquor.

Charging an entry fee to an “open bar” event is considered being in the business of selling liquor.

Many, but not all, general liability policies include Host Liquor Liability. Host Liquor applies when hosts of a business or social functions serve alcohol without a charge.

What is contractual liability?

Usually included as part of the general liability coverage, contractual liability insurance protects you in the event a loss occurs where you have assumed liability under a written contract. For example, under many facility rental agreements, you agree to “hold the facility harmless” for any accidents arising out of your rental of the location. Contractual Liability Insurance would provide you defense you from a claim in which the facility would be liable in connection with your rental.

What does “This insurance is primary and noncontributory” really mean?

This statement may be required by facilities to achieve the assurance that the policy you are providing is a primary vs. excess policy.

Unless otherwise noted in your quote, all of our liability policies are primary and noncontributory except for a nominal deductible ($250-$500) on a few of our products.

Sometimes, the facility rental agreement broadens this definition and will require that your policy be primary and noncontributory with any other insurance coverage that the facility has. The intent here is clear; the facility is attempting to make your insurance pay entirely for any claim, whether it is the fault of the facility or not. This significantly increases your risk of a claim and many insurance companies will not agree to such wording. Those that do often charge extra premium for the increased risk.

What is a waiver of subrogation?

Losses typically happen through someone’s negligence. In general, the negligent party should be liable for such negligence.

Your insurance company could choose to sue a third party to recover the amount of a claim they paid if the loss was caused by that third party. This is called subrogation.

Some contractual agreements, including some facility rental agreements, require you to waive your right of subrogation (and therefore your insurance company’s rights) against them in the event of a claim.

Many, but not all, general liability policies allow you to waive your rights of subrogation as long as it is done in writing and prior to a loss.

If I name someone on my policy as an Additional Insured, does it mean they don’t need their own separate insurance?

No, they would still need their own insurance for their negligence.

A common misconception with additional insureds is the belief that if they are named as additional insured on a policy, they don’t have to worry about buying their own insurance. However, an additional insured only has protection under your policy if they are not responsible for the claim. They would not be protected under your policy if they were at fault for a claim.

The reasoning behind this is simple. If you are responsible for a claim, your own insurance should provide protection, including providing protection for the additional insureds. If an additional insured is responsible, their own insurance would have to provide them coverage. If you are both equally or partially responsible for the same claim, then each would rely on their own insurance for protection.

Example 1: You are promoting a festival and name Great Bacon Company on your policy as an additional insured as required in your sponsorship agreement. Through no fault of Great Bacon Company, a patron slips and falls and brings suit against you and Great Bacon Company. Your policy would provide coverage for Great Bacon Company.

Example 2: Same scenario as above. But instead of a slip and fall, a patron becomes ill from eating a bad batch of bacon manufactured by Great Bacon and sues both you and Great Bacon. Your policy would protect you, but would not provide protection for Great Bacon. They would have to rely on their own insurance.

These are ‘general’ and hypothetical examples.

Is an Accident Waiver & Release of Liability required on sports participant liability policies?

Yes. Waivers have helped reduce or eliminate potential liability of the organizer for injuries, especially those type of injuries that are expected for the sport the participant is involved in.

Why should you bother with having participants sign a waiver since you are purchasing insurance? Because a waiver could protect you from 1) a claim that may exceed your policy limit and 2) the hassle of attending court hearings and trial in a civil lawsuit 3) May be required to obtain insurance.

What are Occurrence & Aggregate Limits?

The Occurrence limit is the maximum amount the insurance company will pay per incident, regardless of the number of persons injured (claimants).

An Aggregate means the same as a cap. It’s the total amount, regardless of the number of separate incidents, the insurance company will pay out for all claims during the term of your policy.

Example: Your policy has a $1,000,000 Aggregate limit. During the term of your policy you have 3 claims that are awarded against you. $225,000 was awarded on one claim, $500,000 was awarded on the second claim and $300,000 was awarded on the third claim. Total amount awarded: $1,050,000. The insurance company would pay a total of $1,000,000 (Aggregate max policy limit). You would be responsible for the balance of $25,000.

What is Products Liability Insurance?

Products liability (including completed operations) insurance provides protection for you against injury to members of the public caused by a defective product you either manufacturer, sell, or give away.

Most, but not all, general liability policies automatically provide products liability / completed operations coverage. Sometimes, we are unable to provide this coverage if your products are considered hazardous; for example tobacco, cosmetics, aircrafts, etc.

Here are a few examples of product liability claims:

Example 1: A wood craftsman sells a pair of wood earrings at a local arts and craft fair. The buyer develops an infection after wearing the wood earrings resulting in medical bills and lost time at work. Products liability insurance would provide coverage to the craftsman for any resulting claims.

Example 2: A spectator purchases a souvenir t-shirt sold by the promoter at a concert. The shirt was improperly labeled and contained fabric the spectator was allergic to. Products liability insurance would provide coverage to the promoter for any resulting claims.

What is Fire Damage Legal Liability?

Fire Damage Legal Liability is included in most, but not all general liability policies, and provides you coverage if you’re legally responsible for any fire damage to a building you lease, rent, or borrow.

Example: You rent a Hotel Ballroom for a birthday party. While lighting the candles on the birthday cake, you accidentally set fire to the drapes causing scorch and smoke damage to the wall and ceiling. Fire Damage Legal Liability would cover you for the costs to repair the damage.

What is a Surplus Lines Carrier (Non-Admitted insurer)?

A surplus lines carrier is an insurer who chooses not to be licensed directly by a particular state, although they are still approved to write insurance in that state.

The types of risks insured by surplus lines insurers are unique and sometimes difficult to rate. The advantage of a surplus lines insurer is they can be more flexible with their rates and policy terms. (Licensed insurers must have their rates and terms pre-approved by the insurance department).

What are the main differences between rain insurance and event cancellation insurance?

When should I purchase event insurance?

It’s a good idea to purchase a policy as soon as you begin to pay deposits. Caterers, photographers and other vendors usually require a significant non-refundable deposit up front with the remainder due by the day of the event. EIQ’s event cancellation coverage can be purchased up to 15 days prior to the event date. EIQ’s wedding liability coverage can be purchased up to 1 day prior to the event date.

Will EIQ event insurance provide coverage if military leave is withdrawn? 

Yes. If the guest of honor is serving full-time, active duty in the armed forces, police, or fire department and must postpone the event due to withdrawal of a previously granted leave or unforeseen deployment, we provide coverage.

Who is protected under an Event Liability policy?

The policy protects the person or business/organization under whose name it was purchased (the “Named Insured”). If it is a private event, up to 2 honorees may also be included in the policy. (An “honoree” is the person in whose honor the event is being held – for example, if you hosted an anniversary party for your parents, your parents would be the honorees.)

Your event venue(s) can also be added as Additional Insured. Please note that you cannot add vendors (for example, caterers or musicians) under this policy. Any vendors at your event should have their own liability insurance.

Does EIQ’s event insurance provide coverage if the weather forces us to postpone or relocate our event?

Yes. Coverage is provided if weather conditions are extreme enough to prevent the honoree or majority of guests from attending your event.

What if a guest of honor or immediate family member falls ill or has an accident before my event?

If an accident or illness prevents the guest of honor or an immediate family member from attending the event, we provide coverage, as long as illness is not due to a pre-existing medical condition.

Can I add my vendors, such as the photographer, DJ, musicians, etc. to my liability policy as additional insureds or can I purchase a policy in their name?

Yes. We will list anyone as an AI as long as it is contractual obligation.

What is the refund policy for the Special Event Liability Insurance Policy? 

Policy premiums, taxes, and other charges are fully earned at inception of policy coverage and are non-refundable in the event of cancellation of coverage at any time by the insured. Special Event Policies are FULLY earned upon binding. 

What is Host Liquor ?

Host Liquor Liability is the coverage for event holders that will have alcohol at the event, but are not selling alcohol. The liability could transfer from the drinker to the host when the drinker shows signs of intoxication and then is served, or is allowed to serve themselves more alcohol. Host Liquor will be excluded from the policy if the insured is in the business of selling, professional serving or distributing of alcohol. If the insured is selling, serving or distributing alcohol, Retail Liquor Liability should be included on the policy.

What does “Named Insured” mean? / Who is or should be the “Named Insured”? What is a “COI”?

The “Named Insured” is the person or business/organization in whose name the policy was purchased. Typically the Named Insured would be the same person or business / organization entity that signed the contract with the venue.

Is my information secure when I purchase an Event Liability insurance Policy from your website? 

Due to strict insurance regulations your privacy and security is our first and foremost priority. We do not provide your information to third parties. We encrypt sensitive information using secure socket layer technology to protect your data.

What is on my insurance certificate?

• Your name & address
• Your certificate number
• Your effective dates
• Your coverage limits
• Your additional insured names (if applicable)
• Our agents and contact information (in case of a claim)
• Our company name & address

Who needs special event insurance?

At some point, everyone, including most small-business owners will host a special event, be it a happy hour for their employees or a golf tournament for their business partners. Certain industries, such as nonprofits and schools, rely on fundraisers to make ends meet. No matter the event, the increased exposures necessitate coverage, which makes Special Event Insurance a smart investment.