Sourcing Academy

Insurance Requirements

Understanding Insurance Requirements for Hotel Events

In this video, you’ll learn the purpose of insurance for your live events. Why do hotels require vendors to have insurance at your event? What does having an additional insured mean for your event? Why would hotels resist naming groups as additional insured? How to check if your vendors have insurance and what to look out for when reviewing your vendor’s insurance?

Experts

Barbara Dunn (representing Groups) Partner at Barnes & Thornburg, LLP

Lisa Sommer Devlin (representing Hotels) Devlin Law Firm, P.C.

Overview

• Insurance is critical for events of almost any type. If an attendee or third party is injured during an event and makes a claim for compensation against the venue or the event sponsor, a liability insurance policy will pay for the lawyer to defend against the claim, the costs of defense, and for any settlement or judgment.
• Depending upon the type of injury suffered, the settlement or judgment could be millions of dollars, which the event sponsor would be unable to pay. Insurance protects the event sponsor from that catastrophic liability.
• Other types of insurance may compensate the policyholder for business interruption, event cancellation, cyber liability, liquor liability, and loss or damage to property.

Group Perspective

• Groups should regularly review their insurance policies to ensure they cover all activities of the Group and are in such amounts sufficient to cover the group’s obligations under contracts and overall risk.
• Groups should require vendors to carry general liability insurance in specified amounts, to provide the group with a certificate evidencing such insurance, and should name the group as an additional insured on such liability insurance policy(ies).
• If a group’s meeting will include exhibits, the hotel will often require the group to take responsibility for exhibitor’s actions; as such, the group should ensure all exhibitors carry insurance and agree to indemnify the group and the hotel.
• Any of group’s vendors providing services at the hotel should be prepared to show proof of liability insurance to the hotel and, if requested by the hotel, to agree to indemnify the hotel against the vendor’s actions at the hotel.

Liquor liability insurance coverage is important even if the group is not serving liquor at its event – social host liability may make the group liable for liquor-related claims along with the liquor license holder (hotel/venue).

Hotel Perspective

• Hotels require customers to provide Certificates of Insurance to prove that the customer does have insurance.
• A hotel may “self-insure” for some or all of its potential liabilities, meaning that its insurance does not apply until the loss is above a certain dollar value. The hotel has sufficient assets to pay claims itself and saves insurance premiums for the hotel.
• Hotels may ask customers to name the Hotel as an additional insured under the customer’s policy for the dates of the event. This means that the customer’s policy will pay for claims against the Hotel that arise out of the customer’s event.
• Hotels resist naming customers as additional insureds. Hotels host thousands of events each year. If the hotel had to add all of its customers as additional insureds, it would be an administrative burden and would increase the Hotel’s insurance premiums.
• Hotels resist accepting customer clauses that require particular types and amounts of insurance. The hotel cannot change its insurance for each event that it holds.
• Hotels require third parties who come on premises to provide proof of insurance as their actions can result in claims against the hotel. The amount of insurance required depends on the type of activity/service that the third party will be providing for the event.