Every single event rental company needs insurance. Period. The results of not having it can be catastrophic for not just your company, but you and your team members personally. If someone is injured at an event, they can hold you or one of your employees financially responsible, meaning any medical bills and/or other fines could come directly out of your personal finances, which potentially includes seizing your assets.
Do I have your attention now?
Good. Now we can talk about the different types of event business insurance that event rental pros should get to protect themselves, their company, and their team members. When you talk to your insurance provider, be sure to ask about policy bundles, as many companies will give you a discount for bundling multiple policies together.
Additionally, the exact coverage terms of policies may vary from company to company; be sure to discuss the specifics of your policies with your insurance agent.
General Liability Insurance
General liability insurance is a must for all event rental companies. This type of policy covers things like medical payments, legal fees, and property damage if there is an accident. Additionally, some policies cover legal fees and damages in cases of slander, error, and personal/advertising injury, so if someone says or writes something inappropriate, you’re protected up to your policy’s coverage limit.
For instance, if you rented a bounce house for a children’s birthday party but an adult who exceeded the weight limit used the bounce house and injured themselves, they could sue and you could be held liable. If, at that party, a team member called the adult a name in response to the behavior that resulted in their injury, they could sue for that, too. General liability insurance would protect you up to the amount of your plan’s coverage.
Commercial Property Insurance
Commercial property insurance will protect any buildings or structures on your property, plus everything within them. In the case of burglary, theft, fire, etc., you’d be protected under your insurance policy. Make sure you understand the limitations of your policy before you sign.
Please note that flooding is generally not covered by standard insurance policies; you will most likely need to purchase additional flood insurance if you live in a flood zone.
Commercial Auto Insurance
If you have an event rental company, you probably have trucks and other company vehicles for delivering rental items. As you’ll probably have other employees driving some of these vehicles, it would be wise to cover them under a commercial auto insurance plan. That way, if an accident does happen, you’ll be covered and it won’t impact your personal auto insurance rates and records.
Inland Marine Insurance
This type of policy will cover your rental items while they're in transit. Why do you need a seperate policy for that? Isn’t that covered by one of the other policies? Confusing as it may be, not always— that’s why it’s important to discuss your policies with your insurance agent. Some policies will include coverage for items in transit, while others will not.
Workers compensation is extremely important for all rental companies. Because your warehouse employees may be moving furniture and other heavy objects with some frequency, their risk of injury is higher than that of a standard office worker. While you should implement safety SOPs for your warehouse team members to help prevent injury, you’ll still want coverage in the event of an accident.
Commercial Umbrella Insurance
Commercial Umbrella Insurance is vital for event rental companies who rent bounce houses, climbing walls, or any other items that have a risk of injury. It provides an extra layer of coverage in addition to your general liability insurance. In the event of an accident, your coverage won’t go as far as you’d think it would if your clients decide to seek legal action. Legal fees, medical bills, fines, and legal judgements add up, fast.
Business Interruption Insurance
Some event rental companies may find business interruption insurance to be a worthwhile investment. This type of policy will provide you with supplemental income in the event of a disaster. The specifics of this type of policy’s coverage do vary, so make sure to discuss the coverage and limits with your insurance agent.
If you operate internationally, you’ll want to consider purchasing multinational coverage for your company. While the other policies will cover you within your home country, they may not cover you (or cover you to the same degree) if you are in a different country. Check your coverage, and consider purchasing this additional layer of protection if your normal policies don’t protect you.
LLC or Corporation
This isn’t technically insurance, but if your business isn’t already an LLC or corporation, you should reconsider that ASAP. Creating an LLC or corporation for your business ensures that any amount not covered by your insurance is your company’s responsibility, not yours personally.
Let’s take a second look at the situation of the adult who used the bounce house and hurt themself. If you are not protected by the LLC or corporation status, any legal fees and medical bills that are not covered by your event business insurance could be taken from your personal bank account. The worst case scenario for your company if you have an LLC or corporation is bankruptcy and closure; the worst case scenario if you don’t have an LLC or corporation is that you must declare bankruptcy, and the courts may seize your assets and garnish your wages. It’s not a good situation, but it is easily avoidable. We highly recommend that any event rental business owner takes the time to create an LLC or corporation to protect themselves.
Event rental companies have some unique insurance considerations, and it will likely take several policies to cover you completely. Talk to your insurance agent about bundling your packages to save some money, as they may have some great money-saving options available. While we hope you never have to use your event business insurance policies, having them in place before an accident happens will protect you, your team, and your company is a smart idea. Without it, your company could face bankruptcy and you could even be held personally responsible for any fines, fees, and/or legal judgements. It’s just not worth the gamble!