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A simple guide to business insurance for event organisers and wedding planners

A simple guide to business insurance for event organisers and wedding planners
11-10-23 / Tommy Jackson

A simple guide to business insurance for event organisers and wedding planners

Johannesburg - The COVID-19 pandemic posed a major threat to many small businesses. Event and wedding planning businesses, in particular, felt the pinch with many services being forced to shut their doors in response to the various national lockdowns. Now, in the aftermath of the pandemic, business owners in the events industry must find ways to mitigate risks that threaten business continuity, starting with the appropriate level of insurance cover.

Offering her advice for event planning businesses is Karen Rimmer, Head of Distribution at PSG Insure. As she explains: "If we've learnt anything from the onset of the pandemic, it's that South African small businesses need a financial buffer against unexpected setbacks. In the events industry specifically, this requirement becomes even more crucial. Extensive preparation and earnings can be disrupted by a catastrophe. When events are rescheduled or canceled, organisers may encounter significant financial challenges.

Additionally, this could be compounded by reputational damage if event attendees are not timeously refunded. There are also other factors to consider, such as how staff members will get paid if an event doesn't take place, or what the contractual obligations are in terms of the venue hire, performers and vendors. The good news is that insurance can help protect businesses in the events industry against these possibilities and ensure that the financial impact doesn't result in a permanent closure of the business."

How event policies work

Events insurance will cover the cost of operations if the event is postponed or cancelled. This kind of cover should be taken out prior to the event taking place and can be tailored to cover the business as the service provider, or the individual hosting the event. Policies of this nature are designed specifically to cater to the landscape of risk in the event industry and to provide an additional level of cover for incidents not covered in a standard commercial insurance policy.

The cover options will vary and can be negotiated with the insurer. Certain policies cover events that are specified over a 12-month period, with an option to renew, while other policies will cover a specific event on a predetermined date and for a specified duration. Certain insurers also offer an 'open' annual event insurance policy, which provides cover for a year of events that are not necessarily specified at policy commencement.

Policies for the events industry will be structured according to the insured's business model and details pertaining to each event. For example, organisers who are hiring equipment such as tents may need cover specifically for the liabilities involved. It's also important for event organisers to have adequate liability insurance, for any injuries or unforeseen accidents that happen during the course of the event.

Furthermore, as Rimmer explains: "Some businesses may be covered under their standard commercial insurance policies for events they host or organise, although a number of exclusions will apply."

For example, if the business operates as a fixed venue hiring service that offers wedding planning (such as a wine farm) the business can opt for a standard commercial insurance policy. To supplement this, the business could take out entertainment-specific cover, which will provide an additional layer of protection against incidents not covered under a commercial policy, such as loss of income due to a cancellation.

The responsibilities of event organisers

In addition to having the appropriate level of insurance cover, there are also ways in which events businesses and organisers can mitigate risks by implementing safety-first policies. One of these important safeguards includes following the requirements as set out by the relevant municipality's Joint Operations Committee (JOC).

Each municipality will have a set of by-laws that govern the way events must be run. Prior to hosting an event, an organiser will need to submit the floor plan, obtain a certificate of approval for temporary structures, have a security plan in place and make provision for emergency assistance on-site. The compliance of organisers with these requirements is an aspect of risk management that insurers will look into in the event of a claim.

As Rimmer concludes: "Covering an event with an insurance policy involves taking many moving parts into consideration. We work one-on-one with our clients to tailor solutions that meet their specific needs in terms of the geographical location of the event, the number of attendees, the organiser's contractual obligations and vendor and supplier relationships.

We recommend that companies in this sector work closely together with an adviser who can point them in the right direction and offer guidance on how to make sure that all eventualities are covered."

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