Dan Rose illustrates the importance of getting insurance cover right for function venue owners and event organisers.
Whether you are the owner of a function venue holding weddings, or an event organiser putting on any kind of outdoor event, you already know you have a complex task ahead, which can be influenced by a multitude of factors.
Despite the myriad of issues that could arise – from adverse weather conditions to an unexpected accident or even theft – you are not under any legal obligation to have any kind of insurance in place. The only compulsory requirement by law is that you have employers’ liability insurance, which offers protection to you, as the event organiser or venue owner, against the cost of any compensation claims arising from employee illness or injury – whether the worker is paid or a voluntary helper.
This means that you could still be found liable for your errors or perceived negligence, and without adequate insurance in place, you may have to pay all costs out of your own pocket, including the legal costs of defending a claim. This could have major consequences for your event or venue in the future.
From public liability insurance to adverse weather cover to non appearance cover, this article looks at the various types of insurance that you, as an event organiser or venue owner, may need and why it could be advisable for you to have certain types of cover in place.
Function Venue Owners
With the exception of the aforementioned employers’ liability cover, there is no legal requirement on you, as the owner of a function venue, to have any kind of event insurance in place. However, as the owner of a business you want to make sure you and your venue are protected against any potential risk of loss, damage or a claim against you.
The main cover here is public liability insurance. The level of indemnity that you require would be determined by a number of factors, but with the market offering cover from between £1m and £10m as standard, with the option to extend these cover levels, it is a simple process to make sure you are adequately protected.
Public liability insurance will protect you against accidental damage to your venue or accidental injury to a member of the public at an event being held at your venue. Here are a couple of examples of how this policy might be used. If a carpet at the venue had been laid incorrectly and a guest tripped over it and injured themselves, it could be you, as the venue owner, who might be liable. Similarly, if a staff member at the venue left a spillage on the floor and a guest slipped up, it could be considered negligence on behalf of the venue.
Having worked with venue owners of all types and sizes across the country, one of the most important recommendations is to ensure that your clients, and the users of your venues, also have adequate insurance in place. We recently settled a claim with a client who had taken out their own wedding insurance policy at the request of their venue, that had specified a certain level of public liability cover. At the wedding itself, a Versace chaise longue was irreparably damaged by a guest. The cost of the claim was £15,000. If the venue hadn’t specified that their client have their own insurance, and if their own public liability policy didn’t include accidental damage to contents, the cost of repair would have fallen to the venue owner.
No matter how comprehensive your policy, even if it covers the liability of loss or damage caused by a guest at your venue, if you have to make a claim, this may cause your insurance premium to increase significantly at renewal. By asking users of your venue to have their own adequate insurance in place, you can minimise your financial risk if a claim has to be made.
On top of this, it is your responsibility as the venue owner to ensure that all third parties such as suppliers, contractors or entertainment companies have their own public liability insurance policies, as your policy will cover your negligence but not theirs.
Outdoor Event Organisers
The number of outdoor events in the UK is growing every year, and we have certainly seen a huge increase in the diversity of those looking for insurance. From chilli festivals to cheese rolling and music festivals to agricultural shows, the one thing they all have in common is the need for adequate insurance cover should the unforeseen happen. There are various cover options that are available to you, and that you may wish to consider as the organiser of an outdoor event, as well as some points to consider that may help to reduce your premium.
Public liability insurance is the most common type of insurance taken out by organisers, and it will provide cover for your legal liability to pay damages and claimant’s costs and expenses that arise as a result of and in connection with your event. The premium you will pay depends on the level of public liability cover you are looking for, the number of attendees expected over the duration of your event, and the number of days cover you are looking for – to include pre-event setup and post-event break down.
It is also important to ensure that any exhibitors, performers, stallholders and third party providers have their own public liability insurance, as your policy will only protect you against your negligence, not theirs.
Employers’ liability insurance is the only cover type that is a legal requirement, and for most outdoor events there are likely to be high numbers of employees, helpers and volunteers involved. The moment you instruct an individual to perform a task at your event, whether they are paid or unpaid, they are no longer a member of the public, and therefore the public liability insurance would not be valid should there be an accident. Employers’ liability would provide cover for your legal liability to pay damages, claimant’s costs and expenses that arise as a result of an injury to anyone you employ at your event, including temporary staff, volunteers or helpers, whether paid or unpaid.
Cancellation or abandonment insurance is one of the most common types of cover and offers a couple of add-ons in the form of adverse weather cover and non-appearance cover. Of course, having to cut an event short or cancel it entirely is any event organiser’s worst nightmare, but having cancellation and abandonment cover will help protect the financial investment you have made. Cancellation insurance will provide cover for irrecoverable costs incurred as a result of the unavoidable cancellation of your event (excluding extreme weather). This could include deposit payments, future costs already committed, and any costs that have already been paid to third parties. It is worth noting that poor ticket sales would not cause this part of your policy to respond!
Adverse weather cover is also a common insurance purchase by outdoor event organisers, given the unpredictability of the British weather. The cover and premium offered will vary on a case by case basis and is dependent on a number of factors, which include time of year, the likelihood of the event being cancelled due to bad weather and whether the event has been cancelled previously for this reason, as well as the ground conditions and the nature of the event. It is worth noting that most insurers will not offer adverse weather cover within 14 days of the date of the event.
Non-appearance cover is also worth considering. Does your event rely heavily on one special guest, performer or band? If they couldn’t attend, would the entire event have to be cancelled? If the answer is yes, and if for unforeseen circumstances they couldn’t attend resulting in the cancellation of the entire event, this section would respond and any irrecoverable expenses would be covered.
Revenue cover is one of the newer and less readily available forms. This insurance will compensate you against loss of income from ticket sales and additional income from the event itself (such as sales of food, clothing etc) if you have to cancel or curtail your event for reasons beyond your control. This cover type is especially valuable for less well established events that may use the bulk of any profit generated for investment into the following year’s event. Many smaller events that have to cancel unexpectedly simply do not take place again the next year due to the loss of revenue. Of course, to make a claim on this policy will require proof of ticket sales and copies of previous years’ management accounts to validate it, but it is an excellent way to ‘future proof’ your event, and make sure that even if you have to cancel, you will still be able to stage the event again.
Event equipment cover is pretty self-explanatory, providing cover for any loss of, or damage to, equipment that you own or have hired while in your custody, care and control at your event.
Working with your insurance company
Developing a relationship with your insurance company can not only make it more likely that you will be offered the cover levels you need, but can also lead to a reduction in the quoted premium. Taking the time to explain your event thoroughly, including policies and procedures you have in place to help mitigate risk, will mean that the insurer can feel confident that you are not negligent in your role as an event organiser, and that you are doing everything possible to reduce the risk of having to make a claim.
The most common thing you will be asked for is your risk assessment. As the organiser, ensuring the safety of all the guests at your event or function venue will be essential and a risk assessment is an important step when it comes to the organisation process. Without a valid risk assessment, you will struggle to find an insurance company willing to offer the all important cover, and without a comprehensive insurance policy in place, you may struggle to hold your event or function at all – particularly if it is being held on public or council owned land.
When preparing your risk assessment, the key issues to consider include:
- identifying all possible hazards
- deciding who might be harmed and how
- evaluating the risks and deciding on precautions
- recording your findings and implementing them
- reviewing your assessment and updating if necessary.
If you are an event organiser, an insurance company will also want to see copies of any permissions needed to use the land on which you are holding your event (for example, from a local council, farmer or private land owner). Other factors such as having marshals and stewards, the presence of St John Ambulance and whether the local police and fire brigades have been made aware of your event, will all help an insurance company to measure the level of risk that your event poses, and could therefore potentially reduce your premium.
Choosing an insurance company
Choosing an insurance company that is best suited to your needs will give you confidence that you have all the cover you need in place, and that the premiums you have been quoted are based on your individual event or function venue and you have not just been sold a standard package that may have more or less cover than you need. Make sure you can talk directly to the underwriter (the person that evaluates the risks and exposures of potential clients, deciding how much cover they should receive and how much they should pay), rather than just a sales team, check out customer reviews and make sure you choose a specialist insurer that has plenty of experience in what is, after all, a pretty niche insurance sector!
We have been lucky enough to work with a large proportion of our customers for many years and as an insurance company it is especially rewarding to be able to reduce premiums at renewal based on our long standing experience of their event or venue. Building a relationship and having a personal contact at your insurer will stand you in good stead for the long term.
About the author
Dan Rose is the managing director of Event Insurance Services, one of the UK’s leading providers of all types of event insurance. Established in 1996, the company works closely with a network of over 2,200 brokers throughout the UK, representing over 450 of the country’s top venues and hotels. Its dedicated team of underwriters are on hand six days a week and the company prides itself on a reputation built on outstanding personal service, having consistently achieved five star reviews on independent review site Trustpilot. Call 01425 484861 or go to www.events-insurance.co.uk