By Brent Allen
Allen Financial Insurance Group
Event planners play a major role in the planning and implementation of special events ranging from private weddings to music festivals. Before we look into an event planners insurance needs we should start with a job description. Insurance companies define Event Planners as “fee based professionals or business that plan, organize, coordinate and arrange public or private events and social gatherings for others.” By this definition event planners do not produce events or contract for direct event services other than consulting.
When Is An Event Planner Not An Event Planner?
When an event professional 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? It’s actually very simple… 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 or event promoter.
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 it’s 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.