Small Business

Special Event Insurance for Small Business

Published on January 29, 2020

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As a small business owner, you recognize the importance of having small business insurance coverage, such as health insurance, general liability insurance, and workers’ compensation, to support your company’s long-term goals. But what about short-term concerns like a one-day event?

If you frequently host events where you’re liable for anything, you might consider purchasing a special event insurance policy to cover your small business.

What is special event insurance?

Special event insurance is a temporary insurance policy that provides coverage for problems that may occur during the day of a specific event or occasion. Also known as temporary event insurance or one-day event insurance, this insurance may be relevant for shows, receptions, conferences, or fundraisers.

There are two major types of special event insurance for small business owners to consider:

  • Special Event Liability Insurance – Provides coverage for legal claims and lawsuits related to bodily injury (including slips and falls) or property damage during the event.
  • Special Event Cancellation Insurance – Provides reimbursement for lost fees and deposits if the occasion is postponed or cancelled due to circumstances such as bad weather or vendor issues.

A special event insurance policy needs to be bought prior to an event, and each event requires a new policy, since the coverage only applies to the specific date of the event. If the event date changes, then you would have to update the policy.

Notably, liquor liability coverage typically must be purchased separately and in addition to one-day event insurance if alcohol will be served during the occasion.

Does a small business need special event insurance coverage?

For major occasions and large gatherings, having special event insurance may likely be an essential form of insurance, since it addresses gaps in other types of insurance coverage and helps protect the finances of a small business in case of unexpected event complications due to equipment or service problems.

Furthermore, a significant number of venues may often require your small business to have and provide proof of a minimum amount of special event liability insurance before you can use their facilities.

If you are required to include the venue as an additional insured in the policy, this will allow both you (as the event host) and the venue to have coverage for potentially costly legal claims or lawsuits.

Contact your business insurance company to find out if your current general liability policy will cover an upcoming scheduled business gathering. If the company does not provide coverage, then your small business might consider purchasing a separate event policy for the occasion.

How much does special event insurance cost for a small business?

Major factors that affect the cost of a one-day event insurance policy include:

  • What is the event type and venue? – The scale, complexity, and location of the event will impact the overall cost of coverage.
  • How many people will there be? – As the number of attendees and staff members increases, the potential for risks and accidents becomes greater.
  • Will there be alcohol? – If so, this will create a more significant expense due to having to purchase additional liquor liability insurance.

Ultimately, the cost of this type of insurance will depend on the policy specifications and amount of coverage your small business wants for the particular gathering.

What does special event insurance not cover?

Temporary event insurance does not provide coverage for public events, and does not reimburse costs if an occasion is voluntarily cancelled. Events which include any of the following elements are also typically not covered through a special event policy:

  • Sports
  • Fireworks
  • Animals
  • Aircrafts

To find out more about exclusions, eligibility, and reimbursements, ask your licensed insurance agent or broker which types of events may or may not qualify with a temporary event policy.

Overall, a one-day event insurance policy may be an effective way to provide your small business event with important coverage for critical liability risks and unexpected incidents. Once your small business has found the right coverage, you and your employees can begin to spend less time worrying about what could go wrong, and more time focusing on enjoying the special occasion.

This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice. If you are looking for small business health insurance, get free quotes from eHealth.

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