As Murphy’s Law goes, “If anything can go wrong, it will.” It may not be possible to account for everything that could go haywire with exhibiting, but being prepared can help ease any potential financial ruin that could result. Anything from natural disasters to accidents on the show floor could affect a show’s success.
Every penny invested into an exhibit is worth protecting with a proper insurance policy. Choosing coverage can depend on factors far beyond the square footage of an exhibit booth. Any external element that may interfere with the operation of a show should also be covered.
“Besides the standard insurance every business needs – liability, workers’ compensation and property – the events/tradeshow industry also concerns themselves with an interruption or cancellation of their event,” shared Sandra Zumbado of InsurEvents.
Shows and events of all sizes and locations need detailed insurance coverage. Outdoor events and exhibit spaces, for example, should also be covered for inclement weather and other hazards posed by their locale.
“An outdoor event carries with it higher cost and risk since it is a less controlled environment. Often, tents are affected by the weather or there’s chaos from a lightning storm,” explained Andy Carson, owner of Show Insurance and Insurance4Exhibitors.com.
Other factors may be special circumstances, such as a show or event at which alcohol is served. Supplementary alcohol liability would need to be added to the policy as well.
Show organizers vs. Exhibitors
Insurance needs are not just unique to the specific event or tradeshow, but also to the particular participant. Both show organizers and exhibitors must carefully consider their options. As with most insurance policies, a comprehensive plan is recommended by events and exhibit insurance carriers.
“The best coverage is one that includes liability with products and completed operations, tenant’s legal liability to cover damages that may occur to the facility, property coverage to protect losses to the contents brought to event and during transport. A type of coverage to avoid is premises only,” advised John Neofotistos, managing partner, Exhibitor Insurance.
Responsibility for accidents and other incidents falls first on the shoulders of the organizers who brought a show or event to the venue.
“When an event planner signs a lease, the event planner becomes fully responsible. Planners rarely read the agreement, and so, may not be aware of the fine print. Problems may arise from not obtaining additional policies, not obtaining certificates from exhibitors, not keeping track of items going in and out of venue, etc.,” cautioned Andy Carson, owner of Show Insurance and Insurance4Exhibitors.com.
“A good planner mitigates risk by requiring exhibitors to sign a contract to have insurance in place so that the exhibitor is responsible for their portion of damages. Every show producer should require insurance from every exhibitor and vendor such as exhibitor-appointed contractors; otherwise they can’t get coverage for someone else’s actions.”
Carson provides insurance for event planners and show owners under Show Insurance while Insurance4Exhibitors.com is geared specifically for exhibitors. Show producers should largely consider policies for cancellation, general liability and weather whereas the exhibitor is best protected by general liability and possibly property coverage, depending on the type of products exhibited at a show.
Show Insurance offers an all-inclusive product in partnership with show organizers to collect, verify and store certificates for individual exhibitors in order to guarantee 100 percent of participants are covered when the show opens. The organizer will likely subsidize the cost of the policy.
An additional measure of protection for show organizers is to ensure individual exhibitors carry proper coverage.
“Organizers need to be aware that most event liabilities do not extend coverage to their exhibitors. Many organizers are also unaware that their exhibitors may not have coverage for the products they give away or sell at the event. So it’s imperative that they have a strong certificate collection program in place for their exhibitor’s liability.”
Exhibitors have the option of temporary coverage by day. At Insurance4Exhibitors.com, beginning rates for individual plans up to $1 million in general liability coverage are based on the length of the event:
- Single day, $89
- Up to 3 days, $109
- From 4-10 days, $119
- From 11-30 days, $199
- 6 months, $475
- Annual, $650
Not to be overlooked are policies that differ between venues, and cities and states.
“Each insurance company has its own underwriting criteria. It’s important for organizers and exhibitors to confirm the coverage they need as some risks may be excluded from their policy,” Neofotistos continued. “For example, workman’s compensation regulations differ from state to state, so many event and exhibitor liabilities exclude this coverage.”
Determining liability requirements for individual booths starts from the top, according to Neofotistos.
“This benchmark usually comes from the facilities downward,” he said. “Many facilities mandate to the organizers the amount of liability insurance required by them and their exhibitors.”
Standard industry limits are set at $1 million, with rare exceptions such as exhibits involving high-risk activities like bungee jumping, animal acts or an archery shooting range, etc. Additionally, exhibitor-appointed contractors may be required to carry policies at higher insurance liability limits than others.
“Currently we are seeing more and more policies purchased for both organizers and exhibitors at $5 million. The highest liability limit we have seen requested was for an international event in the UK, where they requested exhibitors for have liability coverage of £10 million,” noted Nefotistos.
Non-traditional venues may also exceed the $1 million mark in liability limits to protect their properties. Events taking place at locations like Pier 94 in New York must carry coverage for the entire pier in the event of damage or destruction to the structure. Meeting and event spaces located within Las Vegas casinos require limits from $2 to $5 million.
According to Carson, depending on the venue, some may be willing to negotiate limits required by the event planner or show producer. .
Policies involving specialty or novelty items could also require higher premiums. Exhibit spaces containing valuable artwork or collectibles may incur a $1,250 minimum premium, said Carson. The most expensive item at a tradeshow is typically not the booth itself.
Shipping and transporting exhibit crates is a separate insurance concern, usually covered by the logistics company handling the exhibit materials.
Collecting on Claims
Honesty is vital to filing insurance claims at tradeshows and events, stated Nefotistos.
“When obtaining your insurance, the key is to be truthful. Not disclosing or hiding information required by insurance company may result in a claim being denied,” he said.
The most common claim processed by event insurance companies is a slip & fall suffered by an attendee. And while most claims are cut and dry, some fall outside the usual scope.
“Claims can arise from all sorts of parallels and not just the slips, trips and falls that most people commonly associate with,” Nefotistos revealed.
Unforeseen occurrences could involve people, products or even animals.
In one incident, an exhibitor at an art show placing something on his own wall damaging a $20,000 piece of artwork in the adjacent booth.
Other examples include convention delegates suffering food poisoning from food vendors, getting cut during a haircutting demonstration or suffering burns on hair or skin from products, and attendees bitten by an animal in an exhibit booth.
With proper coverage, natural disasters may not be so disastrous. Andy Carson of Show Insurance was able to refund all monies to exhibitors and cover all expenses for a show organizer who was forced to cancel one of two yearly events due to a hurricane Katrina in New Jersey in 2012.
Instances when claims are not paid out range from lack of or inadequate coverage to claims falling outside of coverage dates.
For example, exhibitors may have obtained coverage for their product but not for shipment of the product. While property coverage is not typically date-specific, and can usually be obtained through business insurance, such insurance should be covered by the organization handling shipment, Carson counseled. Ultimately, exhibitors should make themselves fully aware who is responsible for insuring and handling shipments, and consider insuring shipments should handlers not have proper coverage.
Cancellation Insurance also does not compensate for bad investments or lack of interest or ticket sales from attendees, according to Sandra Zumbado of InsurEvents.
Lawsuits may also arise from tradeshows or events. Most common result from attendees injured in a slip & fall or damages to a product on display.
Add to the list of best practices budgeting for show and event insurance – yet another line item certain to increase the cost of exhibiting. But not properly insuring your tradeshow investments can end up costing much more than a pretty penny.