Event Liability Insurance
Why do I need Event Liability Insurance when holding an Event?
You have decided on a venue and are about to secure the event by paying the deposit and signing a venue hiring agreement. STOP! Sign a venue hiring agreement (a contract; with terms and conditions)?
Read the venue hiring agreement carefully before you sign it, once signed it's too late to consider the consequences. If you are concerned about the content or don't understand your obligations within the venue hiring agreement, speak to the venue manager. Perhaps they will consider crossing and initialing a clause to remove it or speak to a lawyer, this may seem extreme but this is risk management.
A comment often made by the hiring party is "but doesn't the venue hold their own personal indemnity insurance", the answer is yes but it insurers them, NOT YOU, the hiring party!
These are steps venues traditionally take as part of their risk management and to protect themselves:
- They ask the hirer to sign a hiring agreement.
- The hiring agreements are written by lawyers and their job is to protect their clients, the venue.
- Within the agreements are clauses which transfer the venues liability to the hiring party.
- The venues insurance policy is there to insure the venue as the insured business and will act upon their insurance loss, however insurers are there to minimize their client's losses. Should their client suffer a loss through the negligence of a hiring party, the insurer will seek to recover the financial loss from the hiring party.
As an example: a candle which burnt a hole in a wooden floor in a heritage venue or a fire hydrant set off can cause quite a bit of damage, why should the venue be responsible for this loss, if it's related to the behavior or negligence of the hiring party and guests. The insurance company will repair the venue's loss to minimize their business interruption but the next step for them is to seek recovery from the hiring party for the damage and the business interruption, if applicable.
Within the hiring agreement there may be two relevant clauses which relate to indemnification and will impact the hirer, the indemnity clause &/or the insurance clause, however it is important to read the whole hiring agreement. The hiring party may be asked to indemnify their sub-contractors, people such as caterers, entertainment, event planners. Consider asking all sub-contractors to provide a Certificate of Currency of their insurance.
People who organise regular events have commented "we have never been asked to provide Liability Insurance in the the past", but what they really mean is that they have never been asked to confirm that they have Liability Insurance by providing a Certificate of Currency. The insurance clause within a hiring agreement may state that the hiring party organises Liability Insurance for their event, if the hiring party chooses not to arrange insurance they are accepting personal liability and may be responsible for any loss.
Many large venues around Australia have strict risk management processes in place and will not allow an event to take place without the provision of a Certificate of Currency.
If you would like to know more you can contact:
Mojomo Insurance Brokers Pty Ltd
ABN: 75 103 403 854 | AFSL 297464
P: 1800 24 33 12 or 8410 0154
M: 0419 440 061
PO Box 127, GOODWOOD SA 5034