By Aletta Marciano, ADV Insurance Agency
If you’ve spent any time working for, or around, community associations, you know that they tend to carry a lot of insurance. These standard policies include general liability insurance - to cover the slips, trips, and falls that can occur on association ground; property insurance - to insure the value of the common areas, association property, and buildings and clubhouses the association is responsible for; directors & officers insurance - to protect the interests of the community members serving in their capacity as elected board members; and workers compensation - to protect the association in the event an employee is injured during the course of work at the association (to name a few, many associations have additional policy types, but these four are standard).
With so many different policies and coverage types, many associations fail to see the need for an additional short-term policy, because these underlying policies should be more than sufficient, right? Not quite. The policies listed above are designed to protect the association during the day-to-day activities seen on premises, not for the types of risks seen during a special event. Special event insurance should be obtained if the association is planning any of the following:
- Weddings, Birthday Parties, Fundraisers
- Event open to the public, not only unit owners
- Event involving alcohol for sale or distribution
- Event involving bounce houses, slides, or other structures children will climb on
- Events involving the pool or other water features
- Events with live music
- Events involving sports or activities
- Events with food for sale or distribution
Now, you may very well be thinking, “every event in the history of enjoyable events has one of these features”, and you’d be right! Special events insurance should be obtained for any out of the ordinary planned occurrence where people may congregate to ensure the association is adequately protected from the additional risk present as a result of the event. The benefits of this type of policy are tremendous, but for convenience and quick reference, the four biggest benefits are listed below:
- It’s inexpensive relative to the coverage provided
The premium for a special events policy averages $250 for a one-day event and can provide coverage of $1 million per occurrence (per claim). This coverage would apply to property damage and bodily injury that arise as a result of the event.
- You can add additional insureds that apply onlyto this event
Many cities and counties require permits for large events, and require they be listed as an additional insured in order to obtain the permit. Instead of adding them to the liability policy for the association, and then taking them off again after the event (a hassle for both you and your insurance agent), you can simply add them to this short-term policy to satisfy the requirements to obtain a permit.
- Many policies offer the addition of liquor liability to the special events policy
If you’re serving or selling alcohol at the event, you need liquor liability insurance. This will protect the association from claims of contributing to the intoxication of a person, serving to underage patrons, and/or violating ordinances or regulations relating to the distribution or use of alcoholic beverages.
- Many policies offer the addition of workers compensation coverage
If your association has no employees, they may not carry workers compensation insurance. If this is the case, obtaining this coverage as a part of your special event insurance policy will provide for medical, disability, or death benefits in the event an “employee” is injured in the workplace.
These policies are quick and easy to obtain, and provide a tremendous amount of coverage and an additional layer of protection for your community. There are programs online where board members can input the event specifics and have a policy in hand the very same day, and any insurance agency specializing in community associations will be able to assist boards and managers in reviewing and obtaining these types of policies should more assistance be needed. Insurance should provide peace of mind, and in obtaining special event insurance you’re purchasing just that! Plan the party, get the policy, then relax and enjoy your hard work!
ADV Insurance Agency is an independent insurance agency specializing in habitational risks and community associations, working closely with board members and managers to provide the education, products, and understanding needed to empower associations to make the best insurance choices for their communities. Aletta Marciano is the Lead Community Association Producer for the state of Colorado, and has specialized in community associations since 2019.