Event liability insurance: How to keep your party from turning into a royal pain

One day, the prince decided to marry. Everyone in the kingdom rejoiced, and the prime minister asked that on the day of the marriage, all of the queen’s subjects make merry and feast.

However, when one of the queen’s subjects — Hayley Mills of Rochester, England — informed her town council that she wanted to throw a block party in honor of Prince William’s marriage to Kate Middleton on April 29, town clerks told her she needed to take out an event liability insurance policy worth roughly $8 million.

After a public scolding by British Prime Minister David Cameron, Mills’ town council backed down and even agreed to reimburse her for the cost of the insurance.

Although your next party almost certainly won’t be on the scale of Prince William and Kate Middleton’s wedding, you can give yourself the royal treatment with event liability insurance.

The troubles faced by Mills and other fans of the royal family seem to have been worked out, but the scenario might have played out differently in the United States. Planning for a special event can be a bit complicated in a huge country where hosts must meet the requirements of any one of thousands of municipalities.

Insuring the event

Whether they’re celebrating a storybook wedding or marking another occasion, people imagine parties a certain way: Over here, we’ll put the barbecue. Over there, we’ll set up the inflatable bouncy castle for the kids. No one imagines that the barbecue grill’s propane tank might explode or the bouncy castle might deflate and injure the kids inside.

Clearly, some liability insurance is probably a good idea. But as with so many insurance questions, the answer to how much coverage you need — or even whether you need to take out a special policy at all — is this: It depends.

First, the amount of coverage required will depend on what you’re planning. If you’re serving alcohol or planning something else that could be risky, the cost of your premium could be higher than if your plans are limited to punch and cookies, according to Arthur Flitner, senior director of knowledge resources at The Institutes, a Philadelphia-based organization that merged the Insurance Institute of America and the American Institute for Chartered Property Casualty Underwriters.

The extent of the coverage you need also will depend on where you’re holding your party, as insurance requirements vary greatly depending on the city or town where it’s being thrown.

It’s not always easy to find an insurance agent who knows how to find this coverage. Sometimes a consumer insurance agent will be able to help, but more often, a commercial insurance agent will be more familiar with the process, Flitner says. Coverage isn’t scarce at all, though.

Check with your city or town before you take out a policy, Flitner says. Some ordinances require organizers of an event to add the municipality as an insured party, in case someone were to sue. If you are renting a space, you most likely will need to get liability insurance.

Dollars and sense

Griffin Janes, an agent at Allen Financial Insurance Group in Phoenix, says the cost of special event insurance varies by the activity and the size of the group. Janes, whose agency handles event insurance on everything from rodeos to hip-hop concerts, says the premium for a $1 million liability policy for a party of 200 people probably would cost $250 to $300.

At TheEventHelper.com, an event liability policy starts at $75 for a group of up to 100. The policy provides $2 million in general liability coverage, including liquor liability for the host (in case something goes awry with a drunken guest). Events that TheEventHelper.com insures range from anniversary parties to baby showers to funeral services.

If you’re not renting a space, you may want to look into your existing coverage. If the party isn’t a massive blowout, you may already be covered, according to Flitner. Often, if the function you’re planning is under the auspices of a formal organization, such as a condominium owners’ group or a neighborhood association, your group may already have general liability coverage.

Even if there is no organization, a policy may not be necessary. If the bash you’re planning really is just a small get-together and not the next Woodstock, the home insurance policies for you and your neighbors might provide adequate coverage. Homeowner’s policies typically cover injuries and property damage either on the premises or on the sidewalk and street in front of a house, according to Flitner.

Homeowner’s insurance policies typically don’t specify the context of the injury, so whether you just fell off a ladder or a bunch of your friends and neighbors break their crowns cheering on William and Kate, it’s all the same to the insurer.

–Bennett Voyles