PromoTix University Class

William Royall (00:00)
A critical but sometimes overlooked aspect of running an event business is insurance. From general liability to event cancellation and equipment insurance will break down the types of coverage available, why they're essential, and how to choose what's right for your business.

Now, every event business faces certain risks. These might include accidents, property damage, weather-related cancellations, or even issues with rented equipment. In my 15 years, I've dealt with all of those issues. Insurance is essential because it protects your business financially, ensuring that one incident doesn't lead to overwhelming losses and put you possibly out of business. In some cases, you're going to be required to have insurance by suppliers of yours

for the event such as the venue or talent that you possibly hire.

Let's go over the main types of insurance you'll want to consider for your event business. The needs of each business will differ, but these types of coverage provide a strong foundation.

First, there's general liability insurance. This is the core insurance for most businesses. It covers property damage or injuries that might occur at your event. For instance, if a guest accidentally trips over an electrical cable and gets injured, general liability insurance can cover the medical costs and protect you against potential lawsuits. This insurance typically also covers personal injury, like a guest claiming defamation or emotional distress.

It's especially important for event businesses since events often bring large groups of people together, which can increase the risk of accidents or injuries.

The next type of insurance most popular in events is event cancellation insurance. This covers you in the case an event has to be canceled due to unforeseen circumstances like severe weather, natural disasters, or even illness. For example, if you're planning an outdoor festival and a storm makes it impossible to proceed, event cancellation insurance can help recover the lost revenue and cover any non-refundable expenses you may have incurred.

Event cancellation insurance can be tailored to cover things like vendor deposits, venue fees, and other non-recoverable costs. Keep in mind that insurance doesn't cover cancellations due to low ticket sales, so make sure to review policy exclusions carefully to understand what you're buying and if it's going to cover you in the case that you plan to cancel.

those who own or rent equipment, equipment insurance is another essential type of coverage. This protects your gear against losses, damage, or theft. Imagine you're running an event where you've set up lighting, sound systems, and staging equipment. If some of that equipment is damaged or stolen, equipment insurance can help you replace or repair it. This insurance is often available for both owned and rented equipment.

So even if you're only renting the equipment for a single event, consider adding this coverage as it's usually less expensive than covering replacement costs out of pocket should something happen to the equipment that you're renting.

So now that we've covered the basic types of insurance, let's talk about how to determine your coverage needs. The right coverage depends on your business structure, the event size, and the specific services that you're offering.

Your business structure plays a role in determining your insurance needs. For example, if you're a sole proprietor, your personal assets may be at risk in the event of a lawsuit. In this case, liability insurance is essential. LLCs and corporations have limited liability protections, but they still need general liability insurance to cover business-related incidents. For businesses that host multiple events each year,

an annual policy may be more affordable and provide continuous coverage. If you only host occasional events or an annual event, you may consider short-term or per-event insurance policies.

Now the size of your events also affect the amount of coverage you're going to need. A small gathering may not need as much coverage as a large festival does, where higher attendance increases the potential risks that somebody may get hurt. Many venues actually require event planners to carry a minimum level of insurance, so check with your venue to understand any specific insurance requirements that they may have.

William Royall (04:26)
Event insurance providers offer different coverage tiers based on the size of event and potential risks involved, so assess your needs based on both attendance and location and the activities taking place at the event. There are also several optional coverages you might consider depending upon the specifics of your business. Liquor liability insurance, for example, is essential if you're serving alcohol at your events.

as it covers incidents related specifically to alcohol consumption. Workers' compensation insurance is required in most locations if you have employees covering workplace injuries and medical expenses.

Professional liability insurance is also called errors and omissions insurance. This covers claims related to errors in your services such as scheduling mistakes or not meeting the contract terms.

So once you've identified the types of insurance you're going to need, choosing the right insurance provider is key. Look for insurers that specialize in event insurance, as they'll better understand the unique risks associated within the industry. Comparing quotes from multiple providers can give you and ensure you the best value for your coverage. Many insurance companies offer customizable packages for event businesses, which allow you to mix and match coverages

based on your needs. So be sure to review the policy details, especially any exclusions, and ask questions to ensure that you understand exactly what your coverage is going to provide.

William Royall (06:03)
So one final pro tip, review your insurance coverage annually. Don't just let it renew. As your business grows and you take on different types of events, your insurance needs may change. An annual review helps you adjust your coverage and make sure you're adequately protected. It's also going to make sure that you're consistently getting the best rates.