Event-Season Tips for Restaurateurs & Vendors

man and women with beer glasses sitting outside with other people

By: David DeLorenzo

Summertime often equates to weddings, events, festivals, outdoor concerts and more where a variety of vendors converge to serve food, drinks and more. Establishments and vendors have a unique opportunity through these events to promote their businesses to a whole new demographic. However, these types of events come with their own set of specific circumstances in which restaurants and vendors need to be prepared for — and that they need to protect themselves from.

  First off, the more you know about the situation you’re going into or the event you’re scheduled to participate in, the better. This is key because your extended coverage for these events will depend on exactly what is going on during the event. You’ll want to make sure that you have your own insurance and understand exactly what that insurance will cover and what it won’t for any off-premises event.

  This will depend on not only your carrier but also on whether your current coverage will extend to the event. The extension of the premise may not. Some carriers have a designated premise of the endorsement, which will not allow their policy to cover the business at an event.

  It also depends on the role your business is playing at the event. For example, if you are a vendor of the event and not the host, the coverage requirements needed will be up to the host of that specific event and the city in which the event is being held, if it is held on city property.

  If the host has insurance for their event, it doesn’t necessarily mean that if a vendor shows up there they would have coverage if they were pulled into a lawsuit. So before committing to an event, check with your broker or insurance company to see if that coverage extends.

  Additional event coverage may require an added fee and your carrier will probably want to know the exposure basis of the event. This can include the size of the event and how many people are expected. This includes not only the total attendance count but also what percentage of those ticket sales include alcohol sales.

  The carrier will likely specifically want to know the event’s estimated attendance count of people consuming liquor. That number will be taken into account differently than the total attendance count.

  The carrier will also want to know what exactly is taking place at the event because anything from bouncy houses to ax throwing can become liabilities. It’s important to note that 99% of the time, these types of things are automatically excluded from a policy anyway.

  For example, consider if you’re a vendor participating in an event and you have your own insurance coverage that protects you from liquor liability for serving people at the event. If there happened to be an accident due to ax throwing and they were to get sued based on the ax injury because of alcohol, there would be an exclusion altogether.

  It is highly unlikely that a carrier will cover a vendor for those instances. That’s why it’s essential to recognize that in many cases, events with dangerous activities should be approached with a “buyer beware” attitude. You need to be cognizant that at these types of events, your company could be pulled into a claim or lawsuit that you may not have coverage for.

  Major events and festivals are often seen as opportunities to make more money, get additional exposure and get your name out there. However, if you aren’t fully aware of all the details of the event and all the things happening during it, you could be putting yourself at risk.

  It’s also important to recognize that with proper coverage, your carrier should cover your business for the normal instances of serving alcohol at the event. But with exclusions for things like the examples of a bouncy house or ax throwing, you would not be covered. If there was a claim due to an accident that was excluded on the premises policy, then anyone and everyone participating in the event would be on their own to defend themselves in the case of a lawsuit.

  However, if a person who consumed too much alcohol then decided to get into the bouncy house and broke both their legs may try to go after the vendors that served alcohol at the event, that would likely come out of their pocket, as an insurance would likely automatically decline it. On the other hand, if a patron drinks too much at the event and gets into a car accident, the vendor’s liquor liability coverage would likely protect them in that instance.

  It’s also wise to look for assault and battery exclusions on event coverage policies. Many of these events have assault and battery exclusions, meaning that if someone gets beat up at the event and wants to sue the host or a vendor, they will not have coverage for that.

  While event season is heating up, we’ve continued to see pretty steady and fair market premiums for event and off-premises coverage. This is highly situational and also depends greatly on what the host city or venue requires in terms of coverage.

  In many instances, two different coverages may be required — one from the city and one from the venue. Some cities may require coverages that are through the roof while others may only require a minimum limit. It is vital to understand what the municipality where the event is taking place is asking for in terms of limits on insurance.

  For example, they may ask for $1 million or they may ask for $5 million. However, if they ask for the latter, this can be discouraging for vendors to participate. At that point, it becomes very difficult for a company to see the value in signing a piece of paper for $1,500 for one day of $5M worth of coverage. It’s overkill, quite honestly because you already have all these participants carrying their own insurance, plus the venue, the event promoter and the city, which all have their own insurance as well.

  To foster and encourage a sense of community through local festivals and events, the municipalities really have to keep it reasonable. On the flip side, the insured parties have to understand exactly what it is they are being insured for — and even more importantly, what they are not insured for. That will be determined on a situation-by-situation basis by the carrier.

  Weddings can also create unique circumstances in terms of coverage. What falls on the venue and what falls on the vendor may depend on the venue and the situation as well. In many cases, we recommend that the client gets coverage for general liability and liquor liability. However, liability will likely fall on the venue itself if they are the ones serving alcohol.

  It all comes down to making sure that whoever is serving the alcohol, whether the venue or the vendor, is well-trained and certified in liquor training. This is a key way to protect your business while also keeping staff and patrons safe throughout event season.

  Out of his passion for serving the restaurant and hospitality industry, David DeLorenzo created the Bar and Restaurant Insurance niche division of his father’s company The Ambassador Group, which he purchased in 2009. For more than 20 years, he has been dedicated to helping protect and connect the hospitality industry in Arizona. For more information visit barandrestaurantinsurance.com.

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