The Law & The Planner
Does Your Insurance Cover Enough?
Be sure you're protected against unforeseen events
by Jonathan T. Howe, Esq.October 1, 2012
Jonathan T. Howe, Esq.A senior partner of the Chicago, St. Louis and Washington, D.C., law firm of Howe & Hutton Ltd., specializing in meetings and hospitality law. E-mail questions to him at email@example.com.
Takeaways• Cancellation insurance is designed to protect against unexpected circumstances.
• What are the financial ramifications if your program can't go forward as planned? If it's one of your organization's most expensive or lucrative events, protect it well.
• Comprehensive general liability protects everyone from the planner to the supplier against third-party claims for injury, property damage and the like.
In my many years in the meetings industry, I've found that event hosts rarely put risk management high on their planning agendas. Protecting their events becomes, unfortunately, more of an afterthought.
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But it must be taken into consideration, and having the right insurance is the granddaddy of all risk-management techniques. Use the following guide to help make sure you're events are covered adequately.
Policy Perfect Cancellation insurance. This is a bit of a misnomer -- it actually is business-interruption coverage. Examples of when it might come in handy: transportation companies on strike, a hotel burning to the ground, a venue hit by a hurricane, a vendor prevented from getting materials to you because of some untoward event. These are all happenings that can be minimized through cancellation insurance, which is specifically designed to protect against unexpected circumstances.
Of course, if the event is canceled, the insurance will provide coverage for the loss within the limits of the policy. Terrorism, postponement or delay in a hotel's opening -- anything that might require you to stay longer than the terms of your license with the venue or otherwise make it impossible to vacate the premises might all be covered. Some policies even will cover your event when a speaker or entertainer who would contribute to the success of the gathering is unable to appear. If your program is interrupted because of a health warning or scare, you also might be protected.
When buying coverage, organizations should consider the financial impact that would result if the event couldn't go forward or the program had to be shortened. If this event is your cash cow, you'd best protect it adequately.
Comprehensive general liability. At a minimum, the planner and the host organization should have this kind of insurance. Sometimes called commercial general liability, it covers third-party claims against everything from bodily injury to property damage.
This important piece in the insurance puzzle protects everyone from planner to supplier. And when you buy CGL, consider a rider matching any contractual obligations already in place, because you want coverage for instances that are mentioned in the contract's indemnification and any hold-harmless provisions.
Umbrella coverage. As the name implies, this fills in the blanks between what your current insurance covers and what might be lacking. You will be required to have certain minimal coverages in order to qualify for an umbrella policy.
Knowledge is Power In the insurance jungle, make sure you have a knowledgeable broker on your side who understands what you and your organization do and has an appreciation for the risks inherent in conducting meetings and events. The broker also can be the go-between for you and the insurance carrier should the sledding get rough. If you are conducting high-risk activities, you will need special insurance to protect not only the participants, but the organization as well. Figuring out what you require is where good brokers earn their keep.