Your organization may host special events for many reasons, from partnering with local charities to celebrating holidays and milestones. From an insurance perspective, a “special event” can be almost anything that’s not part of regular operations. Some of the most common include:
- Community festivals and fairs
- 5K races, marathons, fun runs
- Concerts and performances
- Holiday celebrations and parades
- Farmers’ markets and craft shows
- Outdoor movie nights
- Sporting tournaments
Because these events are out of the ordinary, they add a certain amount of risk:
- Concentrated exposure: Large groups in temporary settings
- Variable control: Third-party vendors, contractors, participants, etc.
- Time-limited nature: One-time or infrequent occurrences
- Elevated activities: Non-routine operations (alcohol, entertainment, sports)
- Infrastructure variations: Temporary structures, equipment, setups
The most common method of handling added risk is through added insurance coverage—special event insurance, in this case.
Finding Coverage that Fits
In general, there are three types of special event policies, based on the type of event in question:
- Single Event Policies offer one-time coverage for a specific, short-term event (usually anywhere from one day to a week). The most common type of special event policy for municipalities, it features event-specific limits and terms.
- Annual Special Events Programs cover multiple events under one policy, generally running on a 12-month policy period. This is a more cost-effective option for frequent events, and works for both pre-scheduled or ad-hoc events.
- Seasonal/Series Policies provide coverage for a series of events, such as a concert series. Operating on a defined season or timeframe, these policies offer simplified administration for similar events with a consistent risk profile.
Once you’ve determined what type of policy fits your event, you’ll work with the carrier to ensure that all the coverages you need are included. Standard coverages typically available include:
- General Liability: Bodily injury and property damage arising from event operations
- Legal Defense: Defense costs for covered claims, even if the allegations are groundless
- Products/Completed Operations: Coverage for incidents related to food, beverages, or activities
- Liquor Liability: Alcohol-related incidents (if applicable) often require separate coverage
- Additional Insured Coverage: Extends coverage to venues, sponsors, and vendors as required by contract
As with most insurance policies, these policies will come with standard exclusions. Most often, that will include:
- Professional liability/errors & omissions
- Workers’ compensation (employee injuries)
- Pollution/environmental damage
- Intentional acts or criminal activity
- War, terrorism (sometimes can be added)
- Cyber liability/data breaches
- Aircraft, watercraft, autos (except incidental)
- Pre-existing property damage
- Communicable disease (varies by carrier)
- Certain extreme sports/high-risk activities
Planning Ahead
Typically, a considerable amount of time and effort goes into planning these events; the insurance piece should be no different. Though the timeline for special event insurance can be much faster than longstanding policies, a rushed process limits your options. The best practice for special event insurance is to start the process 2-4 weeks before the start of the event. This gives you plenty of time for underwriting review and any negotiations needed.
If necessary, you can still get coverage within two weeks of the event, though the shortened time frame can be detrimental. A late start can limit carrier options and cost you more—both in higher premiums (as you’ll have less time to address underwriting concerns or negotiate) and rush fees. If at all possible, avoid last-minute (within three days) coverage. At that point, coverage may be declined entirely, leaving your organization to manage the risk entirely on your own.
Cost Considerations
The special event insurance premium is an important part of your event budget, but determining the premium depends on the details of your event. Some key rating factors carriers use are:
- Attendance: Larger crowds mean higher risk, which translates to a higher premium.
- Event Type/Activities: The level of risk varies depending on the nature of the event; for example, a concert holds a very different risk profile from a farmer’s market.
- Alcohol Service: Serving alcohol may enhance your event and its profits, but it will also significantly increase the premium.
- Coverage Limits: As with most insurance, higher limits mean higher premiums.
- Duration: Multi-day events mean a prolonged exposure to risk, and therefore cost more than single-day events.
- Venue: The choice of venue makes a direct impact on your premium. Of particular note is whether the venue is indoor or outdoor, and whether it is public or private property.
- Claims History: Prior claims can impact pricing.
- Risk Controls: Security and safety measures may reduce costs.
Typical range for municipal events: $500 – $2,500 per event.
