Insurance for Event Planners: What You Need to Know
According to Forbes, event planning is a $450 billion dollar industry that continues to grow. In-person and online events are essential for businesses to connect with their customers and clients. However, enduring success as an event planner takes care and preparation. Event planners work not just with clients, but also venues, vendors, and staff. It is their responsibility to ensure clear communication between these different parties.
While excellent planning and clear communication can mitigate foreseeable risks, something may always go wrong in the course of an event. As an event planner, your job is to troubleshoot on the fly and adapt. Thus, risk management becomes an essential part of your job description.
If you’re learning how to start an event planning business, this is your guide to managing your risks as an event planner, including taking out the right kinds of event planner insurance.
Risk Management
As an event planner, it’s essential to take stock of each event’s risks. It’s important to have a plan—and a backup plan. Better understanding your risks will help you to take preventative steps, as well as understand your exposure to liability. This can help you to select an appropriate insurance policy (or policies).
CVENT recommends event planners take stock of the following kinds of risk:
- Regulation – Make sure your events comply with all federal, state, and local laws. This can include taking out permits and providing proof of insurance to local authorities.
- Relationships with vendors – Partner with well-established, reliable vendors who have their own event planning insurance policies. If a vendor injures an event guest or damages their property, the event planner could be named as a third party in the lawsuit. If your vendors are responsible and insured, it reduces your exposure to liability as well. Create clear expectations in your contracts with vendors to avoid miscommunication.
- Budget – You take on financial risk and responsibility for each event you plan. Keep good accounting practices. Human accounting error and fraud alike can result in incomplete or incorrect payments. Should your error or negligence lead to a clients’ financial loss, you could be held liable. Therefore, it’s important to assess not just your budget for an event, but your business’ liquidity, too.
- Safety and Security – There are some things you can’t control, including severe weather and even labor strikes. Have a contingency plan for canceled or postponed events. In addition, create a safety plan for each event and be prepared to communicate the details to all relevant stakeholders.
Consider Virtual Threats
Don’t limit your thinking on safety and security to your event’s physical location. If you’re hosting an online event or even requiring attendees to register online, your event could be subject to security breaches and hacks that put your participants’ privacy at risk. According to CNBC, a single cyber attack can cost a small company $200,000.
Consider cyber liability as part of your event’s overall security plan. In addition, take steps to cover your financial liability in the event of a cyberattack.
Event Planner Liability Insurance
Once you’ve assessed your risks, you’ve gone a long way toward preparing yourself in the case that something goes wrong. In addition, you’ve identified your business’ capacity to cover costs associated with cancellations, accidents, and lawsuits. You should now better understand your exposure, which can be telling of your insurance needs.
Let’s review the policies that provide insurance coverage for the kinds of liability you take on as an event planner along with how to get liability insurance for an event.
Professional Liability Insurance
Professional liability insurance provides liability coverage when a client holds you responsible for their financial loss as a result of a mistake in your services.
As an event planner, clients sometimes put their financial futures directly in your hands. However, regardless of the event, negligence or errors on your part could lead to a clients’ monetary loss. Professional liability insurance could provide event planning insurance coverage in situations like the following:
- You plan fundraisers that directly affect the success of your clients’ business endeavors. Should the main act fail to show up, leading attendees to ask for a refund, you could be held liable for your client’s lost revenue.
- You plan parties of all kinds. Should you book an unreliable caterer who takes a deposit and then drops off the map, your clients could lose their money, as well as have to pay for a new vendor. They hold you responsible for the extra costs.
General Liability Insurance
Equally as essential for every event planner is general liability insurance. This kind of policy can provide coverage in the event of a third party’s injury and property damage, as well as other instances in which you were at fault (and owe monetary compensation to the aggrieved party).
It’s difficult to know which scenarios will arise in the course of your events, but general liability insurance can help to cover a wide range of third-party damages. A general liability insurance policy can provide liability coverage in situations like the following:
- Your event is more crowded than anticipated on a hot summer day, and the venue becomes overheated. Should a guest pass out and be rushed to the ER, you could be responsible for their medical costs.
- In the above situation, you’re taken to court by the aggrieved party (who seeks to collect compensation). You incur expensive attorney’s fees, as well as costs related to filing court documents.
- A member of your staff spills wine on a guest’s expensive jacket. They hold you responsible for the cost of a replacement.
Your event insurance planning cost may seem like a lot up front, but will protect you from potential expenses in the future. In any of these situations, your general liability insurance policy could help cover your costs—depending on your deductible, the limits you select, and the specifics of your policy. Be sure to talk with your insurer to understand any exclusions, as well as your policy limits.
Together, general liability insurance and professional liability coverage protect your business from many client and third-party claims. However, your policy may have limits that don’t quite cover your special events—or your other insurance needs.
Cyber Liability Insurance
Do you plan events on Zoom or other virtual platforms? If not, are event attendees ever asked to input personal or financial information when they register for your event? It’s important to take steps to protect your attendees’ personal information, as well as your own data. A security breach can result in expenses like the following:
- Cost of notifying attendees
- Cost of data recovery
- Lawsuits for privacy breaches
Without cyber liability insurance, you would be responsible for these costs. However, with a policy, you know you’re covered in the event of a data breach.
Special Event Insurance
Special event insurance is essentially general liability insurance that is taken out only for the duration of an event. It can supplement an existing general liability policy, or it can be taken out on its own. Special event insurance may contain coverage beyond general liability insurance, including:
- Event cancellation insurance – A special event policy might help cover costs related to your event’s cancellation or postponement, including:
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- Non-refundable expenses
- Lost revenue
- Cost of booking a new venue or paying vendors for a different date
- Signage and posters for the new event
As a note, special event cancellation insurance will usually apply to cancellation in the event of severe weather or government closure—not, say, a wedding canceled because of the groom’s cold feet.
- Host liquor liability – Most general liability insurance contains an exclusion for bodily injury and property damage by an intoxicated guest. As an event planner, you take on liability when you serve event attendees alcohol: it is your responsibility to stop serving them if they are visibly intoxicated. Special event insurance that contains host liquor liability coverage could provide coverage in the event that a drunken guest damages the venue’s decor.
- Special item coverage – General liability insurance provides coverage for damage to a third party’s property—not to your own. However, some special event insurance may allow you to take out coverage for the damage or theft of specific, high-cost items you’ve bought or rented for an event.
If you’re planning a one-off event and don’t need general liability insurance on an annual basis, consider special event insurance to protect yourself from liability while hosting your event.
If you already have a general liability policy, be sure to check with your insurer to see if and how special events are covered. You may be able to make changes to your policy to cover special events. If not, take out a supplementary special event insurance policy.
Commercial Property Insurance
General liability insurance covers third-party property loss and damage—but not the damage or loss of your business property. Take out a commercial property to cover your work laptop and any other specialized equipment you use for your event planning business.
NOW Insurance: Easy, Comprehensive, and Affordable
Professional liability insurance and general liability insurance are an essential party of every event planner’s risk management strategy. However, it’s important to find a policy that meets your unique needs related to special events. That’s why NOW Insurance works with event planners one-on-one to customize their policies. While other insurers may exclude specific risks and bury the details in the fine print, we make sure your policy meets your specific needs in terms of coverage and limits.
To better protect yourself from risk, add on a cyber liability insurance policy to provide coverage in the event that you experience a cyber attack. This additional layer of security can help provide coverage against the virtual threats you face when planning your events online.
Once your business is covered by event planning insurance, you can turn your attention back to the risks you can control.
Sources:
- CNBC. Cyberattacks now cost companies $200,000 on average. https://www.cnbc.com/2019/10/13/cyberattacks-cost-small-companies-200k-putting-many-out-of-business.html
- CVENT. Event risk management planning. https://www.cvent.com/en/blog/events/event-risk-management-planning
- Forbes. Make it work. https://www.forbes.com/sites/shenegotiates/2011/10/27/make-it-work-the-zen-of-event-planning/#4e225d5f3382