You’re planning a wedding and you have to come up with several expensive deposits, even though the ceremony is still two years away.
What if the hall goes out of business? Or burns down? Or your daughter changes her mind and ditches the hubby-to-be? Do you just lose all that money?
Not if you buy event liability insurance, a relatively inexpensive guarantee that you’ll get your deposits back as long as the reason you’ve called off the event is on the list of acceptable excuses, including — with some policies — cold feet.
Protection for misbehaving guests
Event liability insurance is also likely to protect you if the groomsmen get in a fight in the back of the hall and start throwing the china, says Janet Ruiz, spokeswoman for Fireman’s Fund. If the fight moves outside to the parking lot and somebody gets hurt and you get sued, the policy will pay for an attorney and any damages assessed you, whether the result of the suit or personal claims by guests or the hall.
If you’re having a holiday party in your backyard or someplace like the VFW or the neighborhood clubhouse where you’re bringing the booze and your brother-in-law is serving it — or you’ve hired a freelance bartender — then you need liquor liability insurance or a liquor liability rider on the event insurance, says Melissa Maybury, manager at HCC Specialty Underwriters. That way, if one of the guests gets in an accident on the way home and sues you, saying the alcohol you served caused the accident, the insurance will pay to defend you and, to the extent of the policy, cover any damages.
In some states, serving kids alcohol is a criminal offense. If the kids sneak a few beers and then do something stupid, you could be in big trouble. “Even if kids go through the trash and get semi-empty glasses, you might be held responsible and you’d probably have to defend and that requires a lawyer in today’s litigious world,” says Sandra B. Haley, vice president for underwriting at Hospitality Mutual Insurance Co.
If you think any of these incidents are unlikely to happen at your event, think again. “You can’t control what your guests do or don’t do or cause to happen,” says Jeff Kleid, CEO of Elite Risk Insurance Solutions.
Kleid says one of his most expensive claims ever came from a tipped-over votive candle in a holder that set a camera on fire. The blaze quickly engulfed the room and at least one person who tried to put out the flames was badly burned.
Protection for the venue
Many people first encounter the need for event liability insurance when they sign a contract at a big hotel or a large catering hall. The contract will require that the signers provide $1 million, or sometimes $2 million, in liability coverage and make the venue a named insured on the policy, meaning that if claims are made against either the hall or the renter, both are covered.
Oklahoma Insurance Commissioner Kim Holland says requiring such an insurance policy is smart and something that lots of people should consider even if the venue doesn’t demand it. For instance, if you sign a contract for your bridge club’s annual picnic in the park pavilion and while you’re there, one of the bridge players gets deathly ill on the deviled eggs, one of the people named in the lawsuit could be you — the club volunteer who signed the contract, Holland says. “Anytime you are planning an event, you are assuming responsibility,” Holland says.
Cost of the coverage
Will your homeowners insurance protect you? Maybe, says Holland. She suggests that before you buy any sort of separate liability policy, call your insurer and ask what the limits are on your homeowner’s policy. Some policies won’t cover the event and some will have strict and often low limits. If it appears that you need an event policy, ask if the company will sell you one or suggest a company that will.
How much will all this cost? Fireman’s Fund offers a policy that starts at less than $300 — “as much as you’d spend to invite another guest to the wedding,” says Ruiz.
Hospitality Mutual’s Haley says cost depends on which policy you select, but she advises against going cheap on the policy limits. Choosing a policy that has a maximum cap of $100,000 per event could leave you in a hole. She recommends at least $1 million and probably $2 million, which is likely to cost you about $450. Whatever liability limits you choose, make sure that coverage extends to all the perils you need.
Start your search for event insurance by contacting your homeowners insurance provider. If you aren’t a homeowner, try your auto insurer. Or you can find lots of event insurance agencies by searching online. Ask which insurance company is providing the coverage, make sure A.M. Best gives it a rating of least A- and read the policy carefully before you sign.
While everyone expects to have a good time at your party, it’s best to be prepared for unexpected calamities.