Insurance Solutions for Fair, Festival or Event
by Tricia Adams, Georgia Peach Festival
By definition, "special events insurance" is liability pr
otection for organizations that host activities on or off premises for a specific time period. The special events policy provides liability coverage and legal defense for claims of negligence brought on the grounds of mismanagement, improper security, misleading representations, or failure of equipment and fixtures, just to name a few.
It is a sobering and true fact that there are persons out there that plan their entire future on mistakes made during your event. Even if claims are unjustifi ed, defense costs can be significant.
Event organizers face potential claims from spectators, vendors, entertainers, and even contractors. Some events pose a high probability of loss such as fireworks, vehicle races, liquor sales, large amusement rides, animal shows or petting zoos, or rodeos. These risks should be transferred away from your event by contracts with vendors or sponsors who are insured or with insurance purchased specifically to protect you from these risks.
A standard Commercial General Liability policy is not going to cover these things. It is imperative that a special events policy be purchased and each event be disclosed to your underwriter. Special events policies are priced according to the length of the event, the special hazards of the event and the number of spectators estimated. Applications are required and usually ask the following. Some are very simple, and some applications are very detailed. They may even include a warranty clause which voids coverage for anything not specified in the application.
Talk over with your agent or underwriter what you are planning and be very specific.
- Name of event
- Mailing address
- Type of event (festival, concert, fair, horse show, etc.)
- Dates of event
- Types of risks to be covered (fireworks, concert, golf carts, parade,etc.)
It is probably best to send your agent a complete list of events to be forwarded to your underwriter so as to not overlook anything.
- Estimated Number of spectators
- Where event is to be held
Other pertinent questions will be asked and some places allow the festival to purchase t
he coverage directly online. Minimum premiums are as low as $350.00 and increase accordingly with the risks.
One option to minimize exposures is to contract as much as possible to an independent party such as an event coordinator. Generally, the festival is not liable for negligence of an independent contractor; however, evidence of insurance is necessary from that contractor. Avoid hiring or assigning an event to an independent party and then retaining control of specific details of planning and work. Outline with the independent party the goals of the event and the specific items you want to include, but leave the independent party the discretion to decide how to accomplish those goals. Contracting with an independent will not relieve the festival of all its responsibilities. Situations could still occur that require the festival to have their own liability coverage in place for proper protection.
Guidelines for Festivals Requesting Certificates
Minimum liability requirements should be received from each vendor, sponsor, or independent contractor.
Commercial General Liability. This policy pays amounts for which you are legally liable for bodily injury or property damage arising from your event. It is usually an occurrence policy which means it covers incidents that happened during the policy period even if they are reported after the policy has expired. These policies will have a general aggregate and a per occurrence aggregate.
Example: A spectator fell at your festival after trying to get out of the way of a worker riding a golf cart. The accident happened during the event dates outlined on the policy, but she did not make a claim for medical bills until two weeks after the festival was over and the event policy had expired. The policy would respond to the loss because it occurred during the time of the policy being active.
General Aggregate: The most the policy will pay for all claims fi led during the policy period.
Example: You have a huge concert with a big name band and many people are injured and trampled by fans trying to storm the stage. You have a total of 415 claims reported for various stages of injury. The general aggregate states the most the policy will pay regardless of the number of claims reported or paid.
These policies also have the following coverage available and they can be included or excluded at the underwriter's discretion:
- Products & Completed Operations Aggregate
- General Aggregate (other than products/completed operations)
- Per Occurrence Limit
- Personal and Advertising Injury
- Damage (to premises rented to you)
- Medical Payments (per person)
Our festival requires limits of $1,000,000 for bodily injury and property damage combined from each vendor or sponsor of an event; however, we would increase limits depending on what specific event the vendor was handling. Your board needs to have a clear picture of each event, what its risk is, and set your requirements accordingly.
It is also important that your vendors carry workers' compensation coverage. Most of them own businesses and use the festival venue to advertise their product and to obtain new customers. Their workers' policies cover them during that time they are off their premises and if you allow someone without that coverage to display at your event, you may be liable for their injury. At the very least, you could incur defense costs in the event of a suit.
If you have someone who does not under law carry workers' compensation, and does not want to purchase it, but whom you believe to be an asset to your festival, you could write a waiver of liability and have them sign it prior to entering your venue that simply states that the person is there at their own risks, and understands that no bodily injury coverage extends to them while they are on your premises.
These have been upheld and overturned in court and there is no way to know whether or not yours will be honored, but is always best to have it in case. It is impossible to determine all risks involved and suits happen all the time.
I decided in closing to name some of the more recent suits reported by insurance carriers to have happened during special events:
- Tripping over electrical cords running to vendor booths.
- Mini car in parade hit child that jumped into street.
- Amusement ride failed to function properly and toddler was thrown out.
- Festival BBQ was done as fundraiser, and meat was not cooked properly causing sickness to consumers.
- Golf cart being driven by festival board member hit the side of a booth trying to avoid people in the street, and damaged the tent poles resulting in a loss of income to the vendor.
- City power could not support vendors, and several with frozen product loss their entire inventory before power was restored.
- Horse in parade went crazy when the fi re truck horn blew and ran through crowd injuring several spectators.
- Venue could not support power for the band and they blew all the circuits to the venue. Stores on premises at this outlet mall lost power and revenue for the two hours it took to get it fi xed and the festival lost money because all the spectators left. (We have had this problem at our festival and have learned to always have backup generators on hand.)
- Lawn mower racers overturned and went into crowd injuring several, and the driver of the lawn mower sustained back injury during festival.
- Child fell off fl oat when leaning over the side to throw candy. Festivals should be fun and provide entertainment to the community or the venue where you are. They can be safe if all risks are determined in advance and measures are taken to avoid or transfer the risk away from the festival.
The most important thing is-BE SAFE AND HAVE FUN! For questions about special events coverage or to obtain a quote, call me at 800-922-5536, ext. 110.
Tricia Adams, Allen Insurance Group, Fort Valley, www.allenins.com