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How Much Insurance Do I Need to Cover My Nonprofit Event?

Written by Kallie Drewyer on

If you run a nonprofit organization, such as an association or public charity, events likely play an important role in your operations. Some nonprofit events generate significant revenue, accounting for a sizable portion of the operating budget. Others are critical to serving the organization’s members or other constituents. 

You know that a successful event demands diligent planning and effective execution. But you might not realize that insuring the event with proper coverage is equally critical.

Why Does a Nonprofit Event Need Insurance?

Nearly any event your nonprofit hosts could expose you to risk. Whether it’s a major trade show or conference, a small dinner or reception, a golf outing or other fundraiser, or an off-site board meeting, any time you gather people together—especially at a third-party site—you need to consider the risks and whether your current insurance protects you sufficiently. 

For most nonprofits, there are two main risks associated with hosting events, both requiring proper insurance.


Think about what could go wrong when you hold your annual conference at a hotel or other venue, for example. With potentially thousands of registered attendees, in addition to speakers and exhibitors, there is always the risk that someone will get injured or cause damage to the property.  

Yet it doesn’t take a large event to create a liability exposure. Even a small reception for 50 guests can open your organization to liability risks, especially if you serve alcohol. And in today’s litigious society, liability settlements and jury awards can be astronomical.  

Event Cancellation 

If you’re hosting an event that typically generates substantial revenue or entails very large expenses for your organization, and the event needs to be cancelled, postponed, or curtailed, you could face two forms of financial risk: the lost revenue, as well as any out-of-pocket expenses you’re still liable to pay to the venue or vendors even if the event doesn’t take place.  

And while no one wants to think about these possibilities, there are many incidents that could keep your event from proceeding as planned. A hurricane or blizzard could trigger power outages, cause damage to the venue, or make travel to the area impossible; the venue could sustain severe fire damage; or a sudden and catastrophic incident could shut down travel, as we learned on 9/11 and when the COVID-19 pandemic was declared. (It’s important to note that event cancellation policies no longer include COVID or other communicable diseases as a covered exposure, after insurers incurred billions of dollars in losses due to pandemic-related event cancellation claims.)

Don’t Standard Policies Cover Nonprofit Events?

The trouble emerges when a nonprofit organization discovers the insurance policies that they currently have in place don’t provide sufficient coverage for event liability or cancellation.  

For instance, a standard general liability (GL) policy might exclude or limit coverage for your nonprofit events, especially if they draw large groups, include high-risk activities, or involve alcohol. In some cases, the GL insurer is willing to underwrite and schedule the event onto the policy; otherwise, you’ll need a separate event liability policy. 

On the other hand, event cancellation always requires a standalone policy. Event cancellation insurance protects your nonprofit against loss of revenue or commitment of expenses if the event is cancelled, postponed, or curtailed due to a covered peril. Often, insurance carriers are willing to cover multiple events under a single policy—assuming you can provide all the data the underwriter needs—but each event is underwritten and rated separately. 

How Much Event Coverage Do You Need?

There is no one-size-fits-all answer to the question of how much insurance it takes to properly cover your nonprofit events. Factors like the following will impact the amount of insurance you need, how easy (or difficult) it will be to obtain, and your premiums.

  • Event location. Events at a third-party site always open you to greater liability risk. And if you’re hosting an event in south Florida during prime hurricane season, your risk of an event cancellation will go up!
  • Event duration. A four-hour charity auction is underwritten differently than a four-day conference, for example.
  • Number of attendees. As a general rule: The more attendees, the greater the liability risk. Events involving more than 50 attendees tend to get an underwriter’s attention, and those that gather 2,500 or more people are more difficult to get coverage for.  
  • Type of attendees. Anytime children are involved in an event, the liability risks (and the coverage needs) go up.
  • Types of activities. If your event involves activities a carrier would view as high risk, then liability coverage becomes more essential—yet, you could have more difficulty securing it and you’ll pay more for it. Many event liability policies exclude coverage for fireworks, inflatables, contact sports, mechanical rides, hot air balloons, rodeos, parades, firearm demonstrations, air shows, concerts, and car racing, among other activities. However, for some activities the carrier may be willing to add the coverage back through a separate endorsement, with certain stipulations related to safety and security measures.
  • The presence of alcohol. Whenever alcohol is served, the risk of injury or damage goes up significantly—especially if high-risk activities are taking place, too. Alcohol drives up the amount of event liability insurance you need and how much it will cost to secure it. When you’re hosting an event where alcohol is sold or served, it’s prudent to purchase host liquor liability coverage. If this coverage isn’t available through your general liability insurer, you’ll need to add it onto your event liability policy (if it’s offered as an option) or purchase a standalone host liquor liability policy. If you’re contracting with a third party to sell or serve the alcohol, confirm that they have the proper insurance in place, too. Any third party that serves alcohol at your nonprofit event should have liquor liability insurance specifically designed to cover businesses that make, serve, or sell alcohol, with your organization listed as an additional insured on the policy. (Ensuring you and your vendors have the right liquor liability coverage is complex, so be sure to consult with an advisor that has deep business liability insurance experience!)

Given all those variables, how much coverage should you secure for your event?

  • For event liability insurance, the coverage limits are often dictated (or greatly influenced) by the insurance requirements in the contracts you’ve signed, especially third-party venue contracts. Most specify minimum event liability limits, although you might need or want more or less coverage, based on the variables discussed earlier as well as your risk tolerance.
  • For event cancellation insurance, the amount of coverage is typically equal to the amount of revenue the event is estimated to generate OR the amount of expenses you could be liable for if the event is cancelled, postponed, or curtailed.

How to Ensure Your Next Nonprofit Event is Protected

The key to ensuring your nonprofit event is covered is to plan and communicate early. When your insurance advisor knows your plans well in advance, they can assess the market, determine your options, and secure the insurance you need to avoid an uncovered loss. If you’re considering an activity that may be too high risk to secure coverage for, your advisor can let you know before you finalize your plans.

B. F. Saul Insurance works with nonprofits of all types, helping you reduce your exposure to risk. When it comes to events, we talk with you about your plans at two critical times: during a mid-term policy review and as the policy is coming up for renewal.  

If you’re planning to host events during the next policy period, we obtain the information to determine if your GL carrier is willing to write the event onto the policy or if we need to secure a standalone events liability policy. For event cancellation coverage, starting the planning process at the right time is critical since most carriers won’t allow you to implement an event cancellation policy more than 24 months before the event or within 30 days leading up to the event.  

We also review any third-party contracts associated with the event, to ensure you’re meeting your contractual obligations and you aren’t unknowingly exposed to risk. For example, most venue contracts stipulate minimum event liability limits, though we can often negotiate those on your behalf. And contracts with third-party vendors (like entertainers, photographers, and others) should specify that they carry their own liability insurance and indemnify, defend, and hold you harmless, along with listing your organization as an additional insured where applicable.     

If your nonprofit is planning to host events, contact the advisors at B. F. Saul Insurance to learn how we can help insure them against risks!

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About The Author

Kallie Drewyer is an Account Manager on the Commercial Lines team at B. F. Saul Insurance, specializing in assessing the risk management needs of prospects and clients and helping market new and renewal accounts. She is responsible for servicing a designated book of business/clients as it relates to marketing, claims, and administration. Kallie interned with Saul Centers for three summers before joining the B. F. Saul Insurance team in July of 2019.

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