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January 3, 2011 / Brett Cohrs

Hayrides, Bounce Houses, and Beer Gardens: Special Events & Nonprofits

Special events go hand-in-hand with nonprofit operations. Unless an organization subsists solely on grants, donations, government or private contracts, or fees for services, it probably has a special event fundraiser or two.

Even if it doesn’t need the event to serve as a fundraiser, an organization might have a special party or event to celebrate successes, holidays, or its members or clients. It’s one of the ways a nonprofit can pass out a big ‘Thank You’ to those who donate their time or finances.

From an insurance perspective, though, most special events include activities that aren’t part of the normal operations of the organization.

It’s vital to know how your nonprofit’s general liability policy extends to the special event.

When planning an event that hasn’t been disclosed to your insurance agent or carrier, your first job is to go disclose it. Call your agent and give him or her a description of the event.

If you have an insurance package tailored for nonprofits, there’s a good chance the activities are covered and a certain level of event is already addressed in your policy.  If you don’t have a tailored package, you might have to take out a separate policy or endorse your current policy to include the activity.

Some specific items that I see come across my desk often that you might want to be aware of:

  1. Bounce Houses: You almost can’t have a fall or spring festival without a few of these opportunities for collar bone breakage. Many companies will want to exclude this exposure. However, there are a few that will include it. Regardless, they will want to know that you are using a reputable, insured resource for the inflatables.  Always get proof of coverage from the company that provides the inflatables.
  2. Beer, Wine, Liquor: Some companies offer primary liquor liability for nonprofits’ events. Others aren’t so excited about the exposure to a liquor liability claim. Their policies are somewhat vague regarding liquor exposure at an event. Make sure to disclose that there will be alcohol. Even if you have to take out a small separate policy, it beats having to pay for a claim when a person ended up w/ 10 instead of their allotted 2 beer tickets and caused a wreck on the way home.
  3. Athletic Events: Is this a 3-on-3 basketball tournament? A 5K run? A paddle race on a local river? Are your participants or spectators covered if they are injured? Ask your agent. She should be able to find out or find the coverage you need for this type of exposure.

Some coverages to consider:

Volunteer or Participant Accident Insurance: If your liability policy excludes coverage for participants of an athletics based event, then take out accident insurance. There will be a small cost per participant.

Single Event Policy with Liquor Liability: If you are responsible for getting a liquor license or are just selling the liquor and want to be sure, just take out a policy.

Special events are wonderful ways to build community and raise funds. A special evening or picnic or festival can do wonders to bring supporters together around a common cause.

Just make sure that an event that is supposed to bring your organization together, doesn’t tear it apart because of a fluke accident.

Discussion: What are some unique special events you’ve experienced? Have you experienced a claim that was covered or not due to a unique special event situation?

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