Our area is blessed with a very robust calendar of special events throughout the year. In addition to the community-wide cultural, charitable and athletic events, local businesses throw parties and families stage weddings, bar mitzvahs and birthday parties all year round. No one wants to consider the ramifications should property be damaged, bodies become injured or unforeseen circumstances require the event to be canceled. But, as an insurance advisor, it is frequently my job to bring the subject of rain into an otherwise sunny topic. So, with that downer of a responsibility in mind, let’s begin with a couple of examples of special events and correlating coverage.
1. The Company Party Company parties are great and sometimes afford a rare opportunity to truly discover what kind of closet cases occupy the surrounding cubicles by day. That said, imagine that your firm is having an end-of-year party at a local country club and somebody brought a karaoke machine. Your firm’s normally placid bookkeeper manages to start a small fire by knocking over the candles on a nearby table during a particularly rapturous rendition of “Wiggle.” The club’s fire sprinkler system discharges both in the dining room your firm rented as well as the adjacent ballroom, which happens to contain the wedding reception of the only daughter of the area’s most-feared plaintiff’s attorney. Subsequently, your firm’s normal general liability coverage is proven to be insufficient to cover the resultant damages. A special-event liability policy, on the other hand, would bring welcome relief to this business owner.
2. The Wedding Altering the example above slightly, imagine that the booty-shaking bookkeeper caused the sprinklers to discharge the day before the wedding reception rather than during the reception, but the damage was sufficient enough to require the reception to be canceled. In absence of event-cancelation coverage, the father of the bride might be out significant expenses if he could not recover from the responsible party. And, were the responsible party shifted to something else (for example, a hurricane damaged the venue instead of someone’s negligence), there might be no party to sue. Thankfully, the availability of event cancelation coverage has broadened over time so that perils such as adverse weather, an accident, significant illness or even the cold feet of a groom can now be insured against.
3. The Booze Everyone’s favorite charitable golf tournament featured beer donated by the local distributor, shot stations provided by three different local banks and all the wine for the awards party afterwards came from a local wine store. Drinks were served by volunteers, employees of the donating businesses and the company that catered the banquet. One of the participants, whose personal auto insurance unfortunately lapsed the day before the tournament, drove his car through the front of a local fine-antique shop on his way home, damaging the storefront, a significant portion of the inventory and putting the shop’s owner in the hospital as a result of a horrific lower-body injury involving a Fabergé egg. The responding officer cited the driver for driving under the influence. Soon after, every one of the insurance agents who provided coverage for the charity, the beer distributor, the three banks, the wine store, the catering company and the golf course had to report a claim to their clients’ insurance companies. Every one of those agents wished that someone had recommended a special-event liability policy including host liquor liability that could have acted as the primary policy and prevented the 18-month legal battle that ensued among the eight different insurers and the plaintiff.
As I mentioned before, availability of special-event coverage has grown dramatically, and the resultant competition has driven down pricing on the whole. That being said, I assure you that it is possible to purchase a $200 worthless insurance certificate for a special event. These policies and their terms and conditions vary wildly. Liquor liability coverage is not always included, exclusions for amusement devices are common and event cancelation coverage must be requested. It is therefore important to give a full description of the planned events to your agent so he or she can go over the policy’s terms and conditions with you, negotiate exclusionary language off of the policy when possible and advise you of any potential coverage pitfalls the underwriter refused to remove.
Once you’ve put the proper coverage in place, however, crank up the karaoke machine and tell that bookkeeper to get weird.