An Insurance Guide to Event Planner Liability Insurance
By Brent Allen
What Is An Event Planner?
Insurance companies define Event Planners as ďfee based professionals or business that plan, organize, coordinate and arrange public or private events and social gatherings for others.Ē By this definition event planners do not produce events or contract for direct event services other than consulting. Event Planner liability premiums are usually based on payroll and/or gross revenues.
When Is An Event Planner Not An Event Planner?
When an event planner sub-contracts non-consulting services such as musicians, catering, bartenders or equipment rental their liability exposures become much more complicated. How do you know when you have crossed this liability line in the sand? Itís actually very simpleÖ follow the money! If you only bill for your consulting services and your client directly pays for all other event services you are definitely an Event Planner. If you accommodate your client by sub-contracting event services through your company and then send him a him a bill you may have just become an event service provider.
Why is this simple accommodation to your client such a big deal? By acting as the middle man in these transactions you may have assumed liability for an independent contractor. In law it is called vicariously liability which is a legal doctrine that assigns liability for an injury to a person who did not cause the injury but who has a particular legal relationship to the person who did act negligently. In other words, you just became a general contractor.
The Good News. As a general rule, a party is not normally vicariously liable for the liability of itís agent or independent contractor. This is because the contractor does not usually control the manner in which an independent contractor does his work and is to be regarded as the subcontractor's own enterprise.
The Bad News. The "general rule" relating to vicarious liability and acts by independent contractors is nearly swallowed up by no less than twenty-one recognized exceptions to the general rule.
How Can I Protect Myself?
First and foremost, make sure that you have a well written contract between you and your client establishing your duties and responsibilities. If possible, try to agree that you will not be held accountable for the acts of any independent contractors.
Secondly, and possibly more importantly get a certificate of insurance naming you as an additional insured from every vendor and service provider you contract with. Then you will know how much insurance they carry, who their insurance company is and that you will be defended by their insurer if you are included in litigation caused by their negligence. If you sub-contracted their service and they do not have insurance you will almost certainly be included in a claim or law suit.
What if I Do More Than Event Planning?
Many event planners actually do go beyond the role of consultant and offer direct event services such as equipment rental, catering or even special event production. Many of these services can be added to the event planner's policy but they must first be disclosed to the insurance company. If the services are not disclosed in your application there is a strong probability that they will not be covered. Coverage for the special event itself, is normally insured separately. It is wise to always verify that event insurance is in place on every project you work on.
Special Event Liability Exposures
Spectator liability exposures are the most difficult to control and defend against. It is not usually considered reasonable or practical to request a liability release from every event spectator. The best defense option is a good risk management program with clear safety guidelines that are strictly enforced.
A spectator that becomes injured during the course of a sporting event will generally commence an action against the occupier of the facility where the sporting event was held. Occasionally, the action will include the individual participant, team, league, or others that may be appropriate in the circumstances.
The injured spectator as plaintiff has the burden of proving that the occupier was negligent. For an action to succeed, the plaintiff must prove the following elements:
The plaintiff must prove that the defendant, as event promoter or occupier of the premises, breached itís standard of care in the given case. The standard is one of reasonableness and prudent, not perfection. The occupier is not automatically liable by virtue of the fact that someone was on itís premises and sustained injuries.
The operator of a sporting event or facility is under a duty to exercise reasonable care in organizing and supervising the event to ensure that both participants and spectators are reasonably safe. The occupier of the premises or the operator of the event or facility thus has a statutory duty towards spectators that enter the premises.
Spectators at sporting events generally accept the ordinary risks associated with attending a given event. Nonetheless, if a spectator that is injured at an event can prove that the occupier failed to exercise reasonable care to ensure the premises were safe, then the injured spectator may succeed in proving that the occupier was negligent in the circumstances.
Commercial general liability ("CGL") policies provide the broadest coverage available to entertainment and sports businesses for liabilities involving bodily injury and property damage. Typically, insurance most insurance policies contain an exclusion for "Participants in Athletic or Entertainment Events" . Courts have interpreted these exclusions as barring coverage for injuries sustained by athletes and performers during athletic competition or other live events.
Even though courts have applied these exclusions to injuries sustained by participants of athletic or entertainment events, the general rules of policy interpretation require courts to construe all ambiguities in an insured's favor. Therefore, when the injured party is not clearly a "participant" in an athletic or entertainment event, a number of courts have found the exclusion inapplicable.
Many specialty insurance companies will offer participant liability coverage for an additional premium and may require a layer of Accident Medical coverage. Accident Medical coverage pays for the medical bills of an injured participant or staff member * incurred while participating in sponsored activities.
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