When life was simple, parents would ask a few friends around or businesses would take small groups to a local pub or hotel. Now there’s a whole new industry called event planning which deals with everything from a wedding to major conventions. So this is a complicated business to be in. One minute you may be booking a clown for a children’s birthday party. The next, you may be talking to the Governor and arranging for speakers to fly in for a conference to discuss how to react to Obamacare.
Yet the problems remain the same. It’s just the numbers that change. So you start off looking at dates. Some like birthdays and anniversaries will be fixed. Others can be more flexible. You can plan with alternate dates. Then you need the venue (it may be necessary to get permits), you may have to arrange transport or arrange for parking. Then there’s food and other on-site facilities plus emergency plans should someone have a heart attack. And finally comes the clean-up.
For the event planners, the small business insurance needs are relatively straightforward. You need cover for all the things that can go wrong. This is a long list so the highlights are that you are unexpectedly denied the use of the venue, the weather makes it impossible to hold the event or the client dies. In these difficult economic times, it’s not uncommon for a restaurant, hotel or small convention center to get into financial trouble and close. This can be after you have paid the deposit, with every last piece of advertising material and invitations printed, the musicians and speakers booked, and so on. At the last minute, you have to relocate and spend additional money to warn everyone that the venue has changed.
At this point, let’s take one step back. The client is not going to get the service agreed and the costs are going up. When the client came in to book your services, did you get the client to buy insurance to cover all these problems? Well, you should have made a hard sell. If the client refused, you should have got the client to sign a waiver confirming the advice to buy insurance had been rejected. No matter who the client is, you as the event planner need to be able to rely on your contract limiting your own liability and giving you the right to claim additional expenses should the client authorize changes. For the record, more than half the claims made on the insurance policies are for problems with the venue or those supplying essential services, e.g. the wedding dress does not fit, the catering gives attendees food poisoning, the guest speakers cancel at the last moment, and so on. So you need small business insurance to cover your own losses and to fight claims from unhappy clients. Those clients will be less unhappy if you sold them their own insurance cover.