“Most business owners think that insurance is a burden, not a benefit,” notes Doug Lane, founder of Denver-based technical production company Fastlane Productions. But he believes in it. “You can never have enough insurance coverage,” he says.
According to Frank Parkhurst, president of Great Neck, N.Y.-based Gold Coast Specialty Insurance Agency, coverage for planners staging special events is provided under a commercial general liability policy, which protects the event planner, organizer or promoter (referred to as the “named insured”) against spectators' claims of negligence arising from bodily injury to themselves or damage to their property.
Coverage under a CGL policy is commonly known as “spectator liability insurance” and may include:
Covering damages arising out of goods or products manufactured, sold or distributed by the named insured.
Covering damages occurring after the event operations have been completed, or after an item has been installed or built and released for its intended purpose.
Covering damages arising out of the ownership or occupancy of the insured premises and the operations performed by the insured business.
Covering bodily injury and property damage for which the named insured may be liable due to the assumption of liability in a contract or agreement.
Advertising injury liability:
Covering damages caused by an offense committed in the course of advertising the named insured's goods, products or services.
Fire damage legal liability:
Covering property damage for losses arising from fire to property rented or temporarily occupied by the named insured.
Covering injuries resulting from sudden events, a long-term series of events, and continuous or repeated exposure to some harmful condition.
Additional insured persons:
Covering the employees, subcontractors or volunteers of the named insured.
Parkhurst notes that there are two different types of coverage under a CGL policy: an “occurrence form” and a “claims-made form.”
The occurrence form covers claims made during the term of the policy, regardless of when the claim is actually reported. These claims even could be made after the policy expires.
The claims-made form covers only those claims reported during the period the policy is in effect — not after the policy has expired.
According to Parkhurst, a standard spectator liability insurance program for an event would include these features:
- A $2 million aggregate limit (meaning that the named insured has a total of $2 million in coverage)
- A $1 million limit on products and completed operations coverage
- A $1 million limit on personal and advertising injury liability
- A $1 million “each occurrence” limit
- A $50,000 limit on fire damage liability
Just as important as what a policy covers is what it does not cover. Parkhurst notes that standard policy exclusions include pyrotechnics, amusement rides, rap or heavy metal performances, liquor liability, and damage to property that the named insured owns, rents or borrows.
He recommends that planners staging events at established venues (such as hotels, museums or public beaches) purchase a CGL policy plus optional coverage including:
- Volunteers and employees as additional insureds
- Commercial auto/hired/non-owned auto liability (which covers rented cars and vehicles owned by employees that are driven on company business)
- Liquor liability (if liquor is served)
- Workers' compensation/employers' liability
- Property coverage
- Volunteer accident coverage
- Adverse weather insurance (which reimburses event expenses and lost profits if the event is hurt by bad weather)
- Event cancellation and non-appearance coverage (which covers expenses and profits if an event is cancelled because of uncontrollable mishaps such as a power outage or the headlining artist falling ill)
It's vital to understand exactly what protection your policy gives you. Although event cancellation coverage may seem like a panacea, it won't help Britons, for example, whose events must be cancelled when the beloved Queen Mother — who celebrated her 101st birthday Aug. 4 — dies.
“The government will call a period of state mourning when she dies; therefore, it would be very bad form to have an event during that time,” notes Sally Webb, managing director of London-based The Special Event Co. “Most event insurance policies now carry an exclusion on event cancellation for the death of the Queen Mother.”
PROTECTING ALL PARTIES
A unique characteristic of the special event industry is its extensive use of subcontractors. It is critical for the event planner to get a certificate of insurance from his or her subcontractors naming the planner as an additional insured, insurance experts say.
But don't stop there. “It's very important that the planner get that certificate as far in advance as they can — at least a month,” cautions Marvin S. Kaplan, founder of the Boston-based insurance agency bearing his name. The planner should give the certificate to his or her own insurance agent, who can check to make sure the subcontractor's coverage is adequate and that the subcontractor's insurance company is properly licensed and financially strong.
“One of the things it says on the certificate is that ‘coverage may be reduced by paid claims,’” Kaplan notes. “So you don't know how much coverage they really have. So I usually tell [subcontractors], ‘Look, I want to be sure that you have $1 million for this event, and I want you to so specify.’”
ASK THE AGENT
Your insurance agent not only can help defend you against claims; he or she can also help you avoid them in the first place.
Los Angeles-based event design/production company EventWorks suffered through two lawsuits in the last three years involving accidents on event setups. “Our insurance company takes care of handling all litigation and dealing with these suits,” notes company founder Janet Elkins. Better still, “Our insurance company has given us pointers on how to avoid similar claims in the future. For example, we now have bright yellow ‘caution’ signs that we use liberally around event setup locations. If we had these signs in the past, neither of the injury claims against us would have been allowed.”
Chicago-based wedding planner Frank Andonoplas has the best experience with special event insurance. Has he ever needed it? “Thank God, no,” he says. “But I carry a load of it!”
RESOURCES: Gold Coast Specialty Insurance Agency, 516/466-5302, www.globalweatherinsurance.com; Marvin S. Kaplan Insurance Agency, 617/345-0666