Events are a great way to attract attention to your small business and expand your client base. However, given the wide variety of moving parts an event entails, there are many opportunities for potential liability issues to rear their heads.
If you’re feeling confident that your small business liability insurance carrier has you covered, you might want to look again. Here’s why you need to supplement your General Liability insurance when you’re hosting an event.
Liquor-Related Claims
The party’s rolling, everybody’s having a great time, the cash bar is racking up huge sales — the event is a runaway success. Suddenly, two revelers, one of whom is holding a martini, collide. The glass crashes to the floor and breaks. Another guest, walking by at that very moment, slips in the freshly spilled beverage, falls and sustains a cut from the broken glass.
A General Liability policy would usually cover you here.
Here’s the thing though. You’re operating a cash bar.
Your General Liability insurance won’t cover it. Nor will it protect you if one of the event attendees should have an alcohol-related incident on the way home and it’s determined your event encouraged excessive consumption and contributed to their episode.
You’ll need the shelter of Liquor Liability insurance in those instances.
Venue Damage
But wait, there’s more.
That guest also crashed into one of the stage supports on the way down and caused it to collapse. In so doing, part of the stage gouged a hole in a wall.
The owner of the venue is now coming after you for the cost of the repair.
And sadly, your woes are continuing.
The bandleader, whose violin player sustained a fractured wrist and the destruction of a Stradivarius in the stage collapse, is also seeking relief. You’re being held liable for the treatment of the wrist, the replacement of an irreplaceable violin — and the loss of income the violin player incurred because they had to cancel a concert they were slated to play the next day.
Limit Extensions
Granted, Small Business Liability insurance will cover many of the issues that might arise as a result of hosting an event. However, you must also consider the liability limits on your policy. Getting back to that violin — will your general policy cover a priceless musical instrument?
Do you really want to wait until you have an incident to find out?
Cancellation Coverage
Aside from the potential issues above, there’s another one a lot of laypeople usually overlook — until it’s happened.
What if there’s a huge storm, a fire, an earthquake, an act of terrorism or some other circumstance that prevents your guests from attending the event? Meanwhile, you’re on the hook for the rental of the facility, payment of performers, food and drink, the catering crew and A/V related costs — with no way to recoup your investment.
It’s a total loss.
Event Cancellation coverage will be a welcomed policy to have in that instance.
It’s Better to Have and Not Need…
All it takes is one chain of incidents like the one described above (however improbable it may seem) to leave your business terribly impaired. When viewed in that light, one can see it’s far better to have the protection and not need it, than it is to need it and not have it.
Event coverage is a relatively inexpensive way to supplement your General Liability coverage to ensure you’re protected in every possible circumstance surrounding the hosting of an event. It’s just smart business.
