Kerry Leighton-Bailey explains the four cornerstones of venue insurance
Making part or all your land, property or venue available to hire out for events is a great way of generating an income. But despite the myriad of issues that could arise as a result – from unexpected damage caused by a guest, to adverse weather conditions, even theft – there is no legal obligation on you, as a venue owner, to have any kind of insurance in place. The only compulsory requirement by law is that you have employers liability insurance to protect you against any potential claims that may arise from staff or volunteers (whether paid or unpaid), where you may be required to pay compensation.
Of course, if you are making your venue or property available for hire and running it as a business, it is never advisable to adopt a “bare minimum” approach to insurance. And when it comes to insurance needs for any type of business, liability insurance is essential. This would offer you protection against claims that may arise if someone slips or falls at your event as a result of your negligence, or protection against mishaps with event equipment.
Without adequate insurance in place, if you are found liable for errors or perceived negligence, you may have to pay costs and compensation out of your own pocket – including the legal costs of defending your claim. This could have major implications for the future of your venue or event. Despite this, 46% of event organisers admitted to not spending anything on insurance last year.
Do your clients have insurance?
Having worked with venue owners of all types and sizes across the UK, and across the globe, one of the most important recommendations is to ensure that your clients, and the users of your venue, have their own insurance in place. 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 the cost of your insurance may rise significantly at renewal.
I am seeing more and more venues – both private and local authority-owned – making it a contractual requirement for clients to take out their own public liability insurance before their event can go ahead.
As soon as there is accidental injury caused to a guest, or damage caused to the venue and/or its contents, through the negligence of your client, the responsibility no longer lies with you as the venue owner. To give you an example, if, while setting up the event, the client left objects lying around which a guest later tripped over and injured themselves upon, your client could be liable if the individual wanted to make a claim.
If your client doesn’t have their own public liability in place, you, as the venue owner, could potentially be held personally responsible for the claim. We saw a claim against a wedding policy, where a guest at a wedding in a stately home damaged a Versace chaise longue. The cost of the claim totalled £15,000. If the venue owner had not insisted their client have their own insurance, they may have had to cover the cost of the repair themselves.
As a venue owner, even with your own insurance in place, you should generally require that the client have their own public liability policy, suitable to the event taking place. It is also important to consider third party contractors that your client may be bringing on to site (marquee hire, caterers etc.) to ensure they, in turn, have their own public liability insurance to protect their indemnity in case of any loss or injury arising out of their negligence.
The four cornerstones of an event insurance policy
All this talk of negligence, liability and indemnity can be confusing. But, an event insurance policy is very straightforward and comprises four main cornerstones that can be taken independently of each other (in most cases), or combined to suit your needs, to give you the levels of cover that your event, or the users of your function venue, may need.
Public Liability Insurance. The foundation of any event insurance policy. There are four main cover levels ranging from £10m, down through £5m and £2m to the basic level of £1m of cover. Local authorities and larger stately homes are increasingly specifying that clients take out £10m of cover and I am seeing that trend spread out to other venue types as well.
Premiums here can start from as little as £60, but will depend on the number of attendees at the event, as well as the length of the event itself.
Employers Liability Insurance. A legal essential for you to have in place, yet so often an overlooked level of cover. Employers liability is potentially relevant if you have any staff, volunteers or helpers working or assisting you at the event. This could range from stewards, catering staff, ticket collectors or marshalls. It doesn’t matter whether they are paid or unpaid, but they must be under your control and supervision at the time they sustain an injury. With cover starting from only around £53 for up to £5m of cover for up to 10 volunteers/employees, this is frequently taken out in conjunction with public liability.
Event Equipment Cover.This level of cover relates to items that your client may be bringing in to, or hiring for, an event they are holding at your venue. So this excludes items which are already part of the fixtures and fittings at your venue. Our policy in particular would provide accidental damage, loss or theft cover for the event equipment that your client is legally responsible for, for the duration of their event. This cover can start from an additional premium as low as £34.
Cancellation Insurance. This is a big one, and yet as an optional cover many event organisers choose not to add it to their policy. Organising and hosting an event can be costly, and this cover looks to try and recover costs if the event you are organising or attending was forced to cancel for reasons beyond your control. There are also several extensions to cancellation cover, which are becoming increasingly common:
- Adverse weather cover: With the unpredictability of the British weather, and the increasing number of outdoor events, this is one of the most common cancellation extensions
- Terrorism cover: Sadly, a sign of the times. For an additional premium, we can offer terrorism cover for your event, limited to threats and acts of terrorism occurring within a specific number of days and miles of the event (usually 50 days and 50 miles). There is an option to upgrade the cover to remove time and distance restrictions
- Non-Appearance cover: Designed for events which are dependent upon a key individual or a group of performers.
The median spend on event insurance last year was £2,500, according to a recent Eventbrite report. However, this figure has been pushed up by the increase in the number of very large events, such as Glastonbury, which have huge premiums.
Whatever the size of the event you are organising, hosting or attending, there are several ways that you can look to reduce your insurance premium. The key is working with an insurance provider or broker that fully understands the needs of your event. By explaining the policies and procedures you have in place to help mitigate risk, you will give the insurer confidence that you are doing everything possible to reduce the risk of having to make a claim.
If you are organising, hosting or attending multiple events per year then there are annual event policies available which generally offer a lower cost-per-event than insuring each event individually.
If you work with an insurer for a period of time, it is likely they will be able to maintain your insurance premium, or in some cases reduce it, based on their long standing experience of your event or venue. Building a relationship with your insurer will stand you in good stead for the long term.
By opening up your venue, or organising/exhibiting at an event, you want everyone involved to have an enjoyable, rewarding and profitable event. Ultimately, an insurance policy is a risk mitigation tool. Ensuring you have your own insurance in place to protect your negligence is important; by stipulating that your clients also have adequate insurance in place can give you peace of mind that they have financial security to cover any claims.
ABOUT THE AUTHOR
Kerry Leighton-Bailey is the marketing director at Event Insurance Services. Established in 1996, Event Insurance Services provides affordable, reliable insurance, tailored to fit the scale and style of the occasion – from school fêtes and small ceremonies to high profile weddings and events. The team works with companies and individuals across the full spectrum of events, as well as supporting a broker network of over 2,500 brokers and 450 of the country’s top venues and hotels. www.events-insurance.co.uk