Insurance 101

We have a special treat for you…a guest blog post from venue owner, Tammy Johnson! Tammy delves into why our venue requires each vendor to provide a certificate of insurance, no matter their service. Read on to find out why insurance is crucial to any business and how it protects everyone against liability during special events.

One of our policies here at The Old Cigar Warehouse is we require every vendor working in our space to provide us with a Certificate of Commercial General Liability Insurance listing the venue as an additional insured.  Even though this is common business practice in most regions and industries, we have a lot of vendors and clients ask us why we do this, so I thought I would explain our reasoning a little.

First of all, let’s talk about what general liability insurance, or “GL” is.  GL is a business insurance policy that protects a company’s assets, and pays for medical payments if someone is hurt due to your employee’s negligence.  GL also covers the cost of your legal defense and any settlement should you be successfully sued for causing any type of accident.

As a venue, we of course have liability insurance that covers us if say, someone slips on a puddle that my staff fails to clean up.  However, if the catering staff knocks over a pitcher of water and their staff does nothing to clean it up, then most likely their company along with the venue would be held liable for any medical payments and possible lawsuits.  We ask to be named as an additional insured on the caterer’s policy, that way if they cause an accident, their insurance company will cover my attorney fees and company assets.  We live in a litigious society, and if there is any kind of injury on my property, regardless of if I’m at fault, I’m most likely going to get sued along with the vendor at fault.

Of course most accidents thankfully are very minor, resulting in hopefully minimal medical bills.  However, just like personal insurance works, there are deductibles to consider.  If someone gets hurt on my property, I automatically have to pay up to $2,000 of their medical bills before our insurance policy kicks in.  Now imagine how I feel if that accident wasn’t my fault.  Say the band leaves a dolly in the center of the room, and an elderly lady trips over it and breaks her hip.  She is going to come to me because it’s my building.  If the band doesn’t have insurance, I have to pay $2,000 out of pocket and my insurance rates go up because someone has to pay for the damages.  If the band has insurance, then their policy kicks in and I don’t have to worry.

Think of GL like driving a car.  If you have car insurance and you get rear-ended by an insured driver, then you know that their insurance will pay for your vehicle repairs, rental car fees and any medical bills.  Now take the same accident with a driver that doesn’t have insurance.  Yes, your insurance policy will cover most of the damages, but you still have to pay the deductible, you’ll probably end up in court and your insurance rates will go up.  I know we’ve all been in that position, and probably still have the dents and scratched to prove it.  I had to go to court last year because someone without insurance hit my car.  Not fun!!

Aside from medical payments, there are of course risks with hosting any kind of event, such as fires, electrocutions, stage collapses, etc.  I would hate to lose my entire business because candles are left unattended and the building catches on fire.  If something like that happens, it does make me feel a little better knowing that the negligent vendor has insurance and would help pay some of the damages.

I know everything I’ve mentioned seems like ridiculous scenarios, but trust me, I’ve been in this business a long time and I’ve seen crazy stuff happen.  I’ve seen guests trip over vendor equipment and get injured, I’ve seen tablecloths get caught on fire, tables crash during an event, and guests get food poisoning from poorly managed food.  Let’s not forget about the nightclub fire in Rhode Island caused by a band’s pyrotechnics that killed 100 people.

The point of the matter is, we host events for up to 500 people and see over 20,000 people walk through our doors each year.  That’s a lot of accidents waiting to happen, and we want to make sure that we, and our partner vendors, are appropriately covered.  No one ever intends to cause an accident, but we all work long hours, have inexperienced employees, and sometimes just forget to do simple things.  Having general liability insurance is standard business practice, and it also legitimizes your business.

If you have more questions, feel free to read the articles below.

http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/general-business-liability-insurance-%E2%80%93-how-it-w

http://blackwellinsurance.net/business-insurance/general-liability/

 Purchasing insurance is relatively easy, they base your rate off your sales and how many events you do each year.  Below are some sites and local brokers that can help you purchase a policy.  Each policy is valid for one day or an entire year, and they aren’t as expensive as you might think.  If you operate your business out of your home, you may be able to add your company as a rider on your homeowner’s policy.  When speaking to your agent, just mention that you have a venue that needs to be added as an additional insured, they will know what that means.

SC Insurance Brokers:  http://www.scinsbrokers.com/

K & K Insurance: http://www.kandkinsurance.com/Pages/Home.aspx

Pro Photographer’s Insurance:  http://www.prophotographersinsurance.com/

Band Insure Now:  http://www.bandinsurenow.com/

NASEP: http://www.nasep.org/benefits.html

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