Organising an event is a big financial commitment. If you’re organising it for a client, it leaves you open to risks you probably don’t know about.
And sure, it’s boring compared to choosing the perfect champagne for arrivals.
But potential liabilities get bigger each year, and as an event professional you need to be on top of this. Because dealing with letters from lawyers takes up time you don’t have. Plus when something bad goes down, it’s much better to be able to say “Talk to my insurer” rather than “What outfit should I wear to court?”
To help out we’ve put together a plain-English guide: the Top 10 Questions on how to make sure you’re not putting yourself at risk, and how to get the best deals on event insurance.
1. What exactly is event insurance?
Event Insurance protects against problems like cancellation, equipment damage or theft, and injuries to guests or attendees.
If you are providing advice as a professional organiser then professional indemnity insurance is also recommended, in case of a lawsuit over accusations of professional negligence.
The premium cost depends on the size and scope of the event, as well as the insurance company your broker chooses. Each policy is different and you should look for one that suits your event. If you’re planning a medical conference, and you get offered a policy that seems designed for sporting events and public gatherings, ask your broker to look further.
2. What events can be covered?
Essentially all types of events can be covered. The only issue is that some events attract higher or lower premiums.
3. What makes premiums vary?
Lots of things vary the premium: For annual public liability, things like revenue, average attendee numbers and the limit required also come into play. Your broker should also understand your contractual obligations to the venue to ensure they have not inadvertently passed their exposure onto you.
For professional indemnity policies, things like your fee income and required policy limit will come into play.
Event cancellation insurance is slightly more complex with a few more factors considered. Some or all of the following might come into play depending on the nature of your event.. event location (indoor, outdoor, temporary structures), power backup, drainage quality, proximity to water, bushfire exposure, council leniency, exposure to elements), sensitivity to weather (temperature, rainfall, wind) and available protection (stage covers, electrical protection, natural wind barriers), the ability to move indoors if needed. The more information you can provide, the better the premium deal you’ll get.
The cost will largely depend on the risk at stake. Higher premiums signify higher odds of things that could go wrong.
As an event organiser, it’s valuable to go through this exercise because it alerts you to where the major risks are, statistically-speaking, and you can manage your event so that it presents less risk in future.
4. What aspects of events can’t be covered?
You can’t insure against low levels of registration or ticket sales. Fraud and contractual disputes can’t be covered. Talk to your broker to get further details.
5. What Does A Broker Do?
A broker’s job is to represent his/her client’s best interests to find the right cover for your business at competitive prices. They discuss your insurance needs with you in detail, then put it out to a competitive pitch between different insurers to get you the best deal and the most appropriate cover.
This removes a lot of the confusion, frustration and legwork from the whole process.
If you end up making a claim, your broker will also help navigate you through that process.
6. How Do I Pick a Good Broker?
A good broker should understand your industry in detail. A lot of brokers spend most of their time insuring frozen food warehouses, car dealers and accounting practices, so they don’t understand the specific risks of events.
A good broker should know, without having to get back to you later, information like coverage types available, restrictions, claims response, cost-saving structures and turnaround times. Just like a good accountant or wealth manager, a good broker who ‘gets it’ can be worth their weight in gold, and save you a huge amount of time, money and stress.
7. What If Something Happens That Nobody Expected?
Believe it or not, like event managers, insurers cannot always pre-empt every single eventuality. Sometimes circumstances arise that catch everyone off guard, that isn’t specifically covered in the policy wording. When that happens, it helps to have a relationship with your broker and insurer so you can sit down and come to a satisfactory solution.
If your broker has partnered you with the right insurer, quite often insurers will be flexible in their claims handling approach, as a claim scenario is ultimately the only chance an insurer gets to shine. It’s in their best interests to perform well for both client and broker so they can keep both relationships for years to come.
8. Can I Use Insurance For More Than Just Covering Bad Stuff?
Yes. Looking at personal or business goals is quite often a good way to determine an appropriate level of cover.
There are the basic covers that as an industry professional, you really need to have – see ‘recommended essential protection’ listed below.
Beyond that there are insurance protection mechanisms available that can help guarantee your annual income, despite issues that may occur beyond your control. Insurance, as a business income management tool, is the more creative part of insurance that is often less understood as it tends to be a specialist area.
9. What Protection Is Essential?
Public Liability Insurance
Cover for legal representation and reimbursement of legal defence fees for injury to guests or participants and/or theft/damage of equipment. This is the cover that will protect you in event of a lawsuit, even if you are not directly in the firing line. If you’re an event manager most contracts specify you need this cover, typically between $10-20m of cover.
Lawyers usually take a shotgun approach. Having the right insurer to represent your interests can make all the difference. Insurers also tend to have access to good legal representation, so you can continue with your business without being dragged into lengthy and costly discussions.
Even if the venue doesn’t specifically request you to have Public Liability protection, take it from us that you will definitely still be called into any legal actions.
If you’re hiring or borrowing equipment, you’ll want insurance in case it’s damaged, vandalised or stolen. An amount of cover can usually be included in your Public Liability policy at no additional cost.
Professional Indemnity Insurance
If you are offering advice for a ‘fee’, as most event organisers tend to do, then you need this cover. Again, it essentially covers legal and damages protection.
It only takes a small mistake or miscommunication for a client to claim for lost income or reputational damage as a result of your actions, however best your intention may have been. Typical limits are $1-2m.
Voluntary Workers Personal Accident
If you use volunteers for your event, as they are not actually employees they do not qualify for workers compensation cover. You don’t want to be picking up medical bills in the event of a mishap, and this cover is worth the minimal premium levels charged by insurers.
Event Cancellation Insurance
Sometimes things just don’t go as expected and you will need to get your money back, covering your expenses as a bare minimum. Protecting profit on top (if the event is a money making event) is optional, but certainly worth it if your business depends on the income.
The basic form of this cover is incredibly broad and is sufficient for most events. If you are need to, you can also extend it to cover wet weather for outdoor events or non-appearance of a speaker or artist.
Illness, transport strikes, faulty equipment, safety evacuations, kitchen fires, storms, blocked drains, soggy ground, gas and water leaks, volcanic eruptions grounding airlines – sometimes your event just can’t go ahead and you need to recover your expenses. Most Event Insurance includes cancellation and postponement cover. This should protect you if something unexpected happens, but look carefully at the things the policy doesn’t cover before you decide. You can decide if you want to cover your lost profits or just your expenses.
10. What Exactly Do You Mean By ‘Cancellation’?
Here are some definitions:-
Cancellation – event cannot start at all.
Abandonment – event starts but cannot finish.
Disruption – event runs but not without partial / intermittent interruption.
Postponement – moving the event date (a typical cancellation policy should include an additional expense allowance if you are forced to postpone for reasons outside of your control. This allowance is there to cover costs associated with postponement such as notification to customers, additional venue fees, additional staffing hours, re-marketing.
Relocation – moving the event location (as with postponement, your policy should include an additional expense allowance for things such as notifications, new venue hiring costs, additional staffing, re-marketing.
Despite all due diligence, bad things can happen to good event managers. You can’t stop bad luck or freak events, but you can make sure you adequately protect yourself, so your career, business and personal finances remain intact through it all.
Finally, just as no one business in the event space is identical, the same applies for insurance solutions. There may be additional policies, such as travel insurance, not specifically mentioned in this guide that you should be considering as part of your overall risk management process.
The information in this post is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements before making any financial decisions.
Contact your broker, or Spoke Insure for more information.
That’s it for now!
We hope you find this post useful.
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