Insurance for meetings, events, and tradeshows

The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.

In this video, you'll learn what is the purpose of insurance for your live events. Why do hotels require vendors to have insurance at your event? What does having an additional insured mean for your event? Why would hotels resist naming groups as additional insured? How to check if your vendors have insurance and what to look out for when reviewing your vendor's insurance?

Check out what Barbara Dunn (Partner at Barnes & Thornburg LLP, representing groups) and Lisa Sommer Devlin (Devlin Law Firm, P.C. representing hotels) have to say in Legalease With the Ladies- powered by HopSkip!

Video Transcript:

Insurance for meetings, events, and tradeshows 

Barbara: Hi, I'm Barbara Dunn, an attorney that works with groups in connection with their meetings travel and hospitality contracts.

Lisa: And I'm Lisa Sommer Devlin an attorney that represents hotels and resorts regarding convention related matters.

Barbara: Together we're Legalese with the Ladies powered by HopSkip. Thank you for joining us. The focus today will be on insurance for meetings, events and trade shows. And in particular looking at insurance that is often required by facilities including hotels. So, stepping back for a moment, the purpose of insurance is really to manage a group's risk. If you can procure insurance (pay money for premiums in order to get a benefit if something bad happens), that's really what insurance is all about. It's a bit of a risk mitigation strategy. So, you have car insurance, something bad happens to your car, you agree that a certain amount of the payment (whether premium or deductible) gets paid first and then everything else gets paid by the carrier.

Meetings and events have certainly inherent risk, and that's everything from the proverbial slip and falls at meetings to circumstances in which someone drinks too much alcohol and something bad happens. So, liability insurance is really the backbone of what most businesses consider to have the basics of insurance. So, general liability insurance, sometimes it's called commercial liability insurance. Certainly, for your group and from your group's perspective, it's always important to take a look at your whole insurance portfolio and make sure you're looking at it and updating it on a regular basis. But when you're working with venues like hotels it's important to make sure that you understand what hotel's requirements are with regard to how much insurance your group is carrying.

There may be particular types of insurance. Again, in addition to general liability there might be automobile liability and there may be also certain provisions with regard to amounts of coverage and insurance. So, it's really going to be important to focus on that at the outset. Similarly, it's important to make sure that you're doing business with vendors who have insurance. So, vendors that may be audio visual or decorator that are having folks or bringing folks on site for your meeting and event to do work at the meeting and event. And one topic that comes up frequently Lisa with regard to vendors coming on site is the hotel wanting to make sure that the vendor has insurance.

I know hotels have a number of different strategies when groups have asked for permission to bring a third party or a vendor on site that they're looking at particular insurance requirements.

Lisa: It depends on what the vendor is going to be doing. If the vendor is a florist just dropping off bouquets, it's one thing. If the vendor is bringing a circus act onto the property to entertain the guests (and I've seen that happen), that's a different thing. You know everybody just heard about that tiger that was loose in Houston. If somebody's bringing a tiger in that has more potential liability. You have to think about the order that people are going to get sued. And what I mean by that is, if there's an event being held at a convention center or hotel and that tiger breaks loose and hurts someone, the hotel or the convention center being the big facility with the big assets is almost always going to get sued. As the operator of the premises, they're going to get sued no matter whose fault it is.

Then probably next in line that the person who's injured is going to sue is the event sponsor because they're the one that had the event and decided to have the tiger. And last but not least, then they may sue that vendor. Well, the point of the issue is if that person gets hurt and they have a million dollar claim (and let me tell you million-dollar claims are very very common in today's world), If they have a million dollar claim and they sue the tiger trainer, the tiger trainer may not have any money and can't pay for that million dollar claim unless the vendor has a million dollars’ worth of insurance. So, insurance is there to pay for the attorneys to defend the case, to pay if there's a settlement, and to pay if there's a court judgment.

The insurance is there to protect each level of those participants in the event. And the reason that hotels ask for proof of that insurance is if you have a contract that says, you will have insurance but you don't get it. It doesn't do anybody any good. So, the hotels want to know that that insurance is out there, so that if they get sued that that insurance will protect them. Now groups often ask for the hotel to name the group as an additional insured on the hotel's policy during the event. Hotels resist that, because hotels have hundreds if not thousands of events each year. And if they had to go out and name every customer that comes through the door as an additional insurer, not only would it be a full-time job for somebody on their staff to make those arrangements but it would drastically increase their insurance premiums.

So, hotels typically resist that requirement. Sometimes hotels or other venues will ask that the group or the vendors name the venue as an additional insured. That's not as big a deal because it's a one- or two-night event and it won't really impact the individual. But it's something you should negotiate and discuss; however you deal with those additional insured requirements.

Barbara: Lisa I agree that it is another strategy for groups and venues to protect their interest by making sure that they're a covered party. And just stepping back for a moment, the concept of the additional insured is that someone else puts your name on their insurance policy. The net benefit is you get the same coverage that that party does, so that you're triggering a claim under their insurance instead of your insurance. For certain types of insurance, this is a good strategy. For example, if a group is hiring a transportation company to shuttle attendees at its event. That transportation company may have a significant amount of insurance (they should), 10 million dollars, let's say, or up, where the group might not have that type of coverage.

So, coming along for the ride (no pun intended) having the group be named on that insurance policy is one really good strategy. From my standpoint, where additional insurance become important is the more dangerous the activity. So, in addition to the tiger, live animals, chainsaw juggling and fire juggling, anything in your mind that you might say, it's a little bit of a higher risk. That's the time that you really should look to the vendor and make sure that the vendor has the insurance that you need and also that they'd be willing to name you as an additional insurer. Again, that's a bit of that stop gap. How do you know the vendor? How do you know anyone has insurance?

Well, you're asking for a copy of their certificate of insurance. Many of you are familiar with a standard form that shows a number of fields of different information. A couple things to look for. First, make sure the party that's covered under that insurance policy, make sure that's the same vendor name as what's in your contract with that vendor. It might be a completely different company name; in which case you're going to need to make sure that this vendor, the vendor you're working with, is covered under that insurance policy. Second, make sure the dates of the policy are current. It's very common that you might get a stale or expired a certificate of insurance from a company. So, you want to make sure it's current you want to make sure ultimately that you have a copy of the certificate that will cover your event dates. And then finally, if you have additional insurance listed, your legal names the group's company's legal name should be listed in that certificate as well.

So, those are all important things to do. Many planners say to me, ‘What do I do with the certificate?’ I say, ‘Hold on to it, put it in your file or your electronic file or cloud or wherever you choose to have it.’ But make sure it shows you acted in due diligence. You contracted with a vendor that has insurance that could pay their claims if in fact there was something bad that happened. So, it's really important I think Lisa to emphasize to groups and hotels that coming to the table walking in the door with insurance is just that extra stop gap that might be needed from a risk management standpoint.

Lisa: Another thing that I often hear from smaller events like weddings or other social events is they say, ‘Well I don't have any insurance.’ Well, those are exactly the kind of people you should be worried about. Because the less assets the customer has, the more risk there is that they're not going to be able to pay if something goes wrong. And it's those very social events that are more likely to lead to injuries. You know, I always talk about putting grandma and grandpa on the chairs and dancing them around during the wedding reception. That's a lot more dangerous than the boring dinners that corporate events have.

So, when a customer says, I can't afford insurance, oftentimes, if they talk to their own insurance broker, they'll find out that their homeowner's insurance policy will cover that event. But if it doesn't, it's very easy to go online and simply google event insurance and you can buy a policy for a very affordable amount to cover you for just that one night for that event. And that will protect you, the assets of your house, all those other things in the event that something goes wrong. When customers say, ‘Well, I can have a million dollars but I can't have 2 million or 3 million.’ The cost in premium between 1 million and 2 million is very small. It's that initial premium that's going to cost you and every increment you add on top of that, it's cheaper and cheaper.

So, insurance is a very important way to protect yourself and your assets. And anybody who says they can't do insurance is somebody who might want to be leery of doing business. Right Barbara?

Barbara: I agree Lisa. Two other points to make. One probably most important part of any insurance policy to review are the exclusions. If there's anything on that list that you're doing, you need to get coverage for and you need to ask whether you could get the coverage and if so if it's going to cost extra. Liquor liability insurance is one of those components. Sometimes it's excluded under the general liability insurance and yet you want coverage for liquor claims whether you're certainly required to do so (if you have a liquor license) or if you're a group that's considered in many states as "social host" and has the potential of liquor liability. Looking at exclusions, looking at liquor liability those are two components as well.

And that is just to dovetail with what Lisa said. While a million dollars sounds like a lot of money and we'd love to have that in our bank account, when it comes to a claim, when it comes to a lawsuit and hiring attorneys and paying costs to get out of a lawsuit, costs can go up dramatically. So, looking to see the most insurance that you can get, certainly making a business decision on the cost is really a good thing to do. And bottom line, talk to your broker. Look at your insurance policies, look to see what you have in your portfolio. Update those regularly. And most importantly look at your vendors and we're each partnering together to be part of a larger meeting. It's important along the way that you have that financial stability that risk management strategy that will serve all parties well.

Lisa: And I would just add one more thing to that when Barbara said look at your exclusions. If you're doing something in particular at your event that may pose a risk if you are bringing in that tiger or you are bringing a car display or something like that. It's a good idea to put that in writing and send it to your broker saying, ‘I need you to confirm for me that if we're doing this at our event that it will be covered.’ So, that way if after the fact, some effort is made to deny that coverage to you, you can say, hey this is verified in advance, so that you will be protected.

Barbara: Absolutely. Thank you so much for joining us today on Legalese with the Ladies powered by HopSkip. Please leave your comments below. Thank you.

The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.