What is one day event insurance?
It is an insurance policy that addresses the risks of either an individual or business, who organizes or sponsors an event that invokes heavy exposure and which lasts for 24 hours or less. “Heavy exposure” means that there is a very high probability that the promoter can be held liable for either injury or property damage. This can be due to the number of attendees and/or the nature of the event.
One day event insurance is designed to cover large events like concerts, fairs, exhibitions, a 5km run, sports tournaments, farmer’s markets, food truck festival or any other events that need coverage from multiple sources of liability. In addition to a one day event insurance coverage that will be in place for a concert for example, promoters of such events may also limit their exposure by having in place a liquor liability insurance.
Certificate of One Day Event Liability Insurance
An example of a certificate of liability for a one day event is shown below.
Image sourced from Frank For Fall Festival
What Does One Day Insurance Cover?
There are three main lines of coverage for one day insurance as follows:
This part of the insurance covers losses and/or damage to physical property like vehicles, equipment, clothing, or similar that has been intended to be used because of and during the event. It also covers and reimburses the promoter should the event be postponed or cancelled due to unforeseen circumstances.
This portion of the insurance is rather broad. Its main purpose is to cover losses due to negligence that results in personal injury or death. The losses include medical and funeral expenses and income lost.
This portion of the insurance protects the promoters from lawsuits. Imagine the number of actions that would be filed for an incident that affected 50,000 spectators of a concert. This is why liability coverage of a one day event insurance is extremely important.
How Much Does It Cost?
To be on the safe side, it is highly advisable to have in place a one day event insurance because just one injured person or one damaged piece of property can lead to substantial legal liability risks if you are the event promoter.
Although one would think that such an insurance coverage might be very high due its short term duration (24 hours or less), it will probably come as a surprise and probably not as high as you would expect.
The premium of a one day event insurance will vary and depends on a number of factors including:
- The number of attendees
- The level of risk of an incident occurring
- The total amount of coverage
- The previous history of the promoter
Some examples of the premiums required to cover a one-day event are:
|A basketball game||5000||$1225|
The above premium payable will cover you for:
|Standard liability limits for coverage:||$3000000|
|Fire and property damage to leased properties||$250000|
In general, insurance companies have standard coverage amounts for one-day events, but you can request variations of the standard amount and obtain the coverage you deem necessary.
If you intend to serve alcoholic beverages during the event, you will need to add to your policy a provision for Liquor Liability at an extra charge of about $500 per million dollars of coverage. You can avoid this fee by clearly notifying the attendees that it will be an alcohol-free event and implement security measures to prevent the consumption / use of alcohol for the whole duration and at the premises of the event.
Below is an extract from socialhostlaw showing the number of minors who get most of their alcohol from “Social hosts”.
(Image source: socialhostlaw)
Can a one day event insurance affect other policies?
As aforementioned, one of the factors taken into consideration for determining the premium of a one-day policy, is the past history of the promoter. If past history indicates that there is an inordinate number of claims and payouts by a particular promoter (which means money payable by the insurance company to this promoter), then the insurance company will charge a higher premium not only for a one day event but also for any yearly insurance policy this particular promoter has with them. Of course, the insurance companies are in the business of making a profit and therefore need to cover their risks and associated costs.
This is why major event promoters setup a “mother/parent” company and then incorporate a “subsidiary” who in turn is tasked with the responsibility of organizing a particular event. The subsidiary signs the contract and is responsible for its terms and conditions. Therefore, the mother/parent company remains unaffected by whatever happens. This is simply because the mother/parent company cannot be held liable for the conduct and/or actions of the subsidiary.
What can cause the cancellation of a one day event insurance?
There are many reasons as to what can cause cancellation of one-day events, however, have you thought about a natural catastrophe? It is definitely something that can happen and is always a valid reason to cancel a one-day event. Please refer to the chart below which shows the number of natural catastrophes worldwide from 1980-2012.
Image sourced from hotwhopper
Where can a one-day event insurance be bought?
No one can accurately predict the number of incidents that may occur at a one day event. Due to this very fact, not all insurance companies are willing to provide policies to cover one day events. Those that do are usually the top rated companies who maintain a very high amount of cash reserves in order to carry out the terms and conditions of the contracts should it become necessary. When you need a one day event insurance policy, it is always best to obtain a few quotes and:
- Compare prices and terms
- Ask if there are any deductibles from the coverage amount. Some companies assume responsibility above and beyond a certain amount. For example, if the damage to a property is calculated at $100,000, the contract may stipulate that the insurance will cover any amount above and beyond the first $10,000. This simply means that you will have to cover the first $10,000.
- See which insurance company is offering the contract and ask for an independent company rating that should provide all pertinent information as to the company’s financial strength, status and reputation. After all, you do need to know if the contract will be valid in the event that you need to lodge a claim and whether you will have coverage or not.
- Ask how many days of notice you need in order to provide the necessary information to be able to sign the contract. Some companies require a few days of notice whilst others may require the contract to be signed and paid the day before the event. Other companies can do it online or over the phone. The information required is usually:
- Your name and contact information
- The date and place of the event
- Information on the venue of the event
- The expected number of attendees
- The amount of coverage required
It is also possible to obtain different insurance contract policy through different insurance companies. For example, you can obtain one insurance policy through a company who will cover the cancellation part while another company will cover the liability part. However, this is not recommended as companies that offer a bundled insurance policy will end up charging you a lower premium. Further, should an incident happen, you will have a higher degree of certainty that it will be successfully handled. If you have two insurance policies from two different companies, one insurer may wish to pass the blame to the other and it will end up in a messy situation.
I have listed here a website which will give you a list of insurance companies that offer a one day event insurance:
In summary, if you are organizing or responsible for a one day event, please do not risk your assets and peace of mind: simply get an online quote or contact a licensed insurance agent and sign up for a one day event insurance coverage.