Let's set the stage...
You just nailed down your next gig, and in comes the contract. As you are reading through the requirements, you suddenly find yourself staring at insurance jargon, wondering, "Does my policy cover this?" Or, "Do I even need this coverage?"
Sound familiar?
While every event, venue, and/or entity has the right to set its own requirements, many use standardized contracts that are not always tailored to your specific operations. The good news is that contract requirements are often more negotiable than people realize. Understanding what you are being asked to provide and whether you actually need it can save you a significant amount of money (and stress!).
Let's go over some of the most common requirements we see, and how you can navigate them!
Commercial General Liability (CGL)
If you have an active policy with SIA, you are off to a good start for this requirement! SIA's policies are Commercial General Liability (CGL). CGL covers claims arising from your operations that may result in bodily injury to a patron, property damage, or offending someone. Please note that CGL does not cover personal injuries you may sustain.
Be sure to verify that your per occurrence (per claim) and general aggregate (the most you would be paid out per policy period) limits are in line with what is listed in the requirements. The industry standard is $1M per occurrence with a $2M general aggregate ($1M/$2M). However, some gigs may request more.
Anything over $1M/$2M is a lot of coverage and, in turn, will be expensive. Before paying to increase your coverage limits, we always recommend negotiating with the event/venue/entity. Many of our clients have had success with having the limits reduced, or the event/venue/entity helping to pay for some, if not all, of the cost to increase the limits. If they do not budge on their limits, please contact the office to learn about your options.
Certificates of additional insured (COIs) + special endorsements
Many contract requirements ask for a certificate of insurance (COI) or to be listed as additional insured. An additional insured is a third party (such as an event, venue, or entity) that is named on your policy. If a claim arises from your operations, and as a result, the third party is named in a lawsuit, they can file the claim on your policy instead of their own.
Some contracts may also require special endorsements:
- Waiver of Subrogation endorsement:
- "Subrogate" means to pass a claim or lawsuit from one entity to another. This endorsement prevents an additional insured from being held financially responsible if a claim arises from your operations.
- Performer (not MPEP performers) and Mobile Vendor clients have this endorsement included with their policies for no additional premium.
- Music, Photo, and Event Planner (MPEP) clients must purchase this endorsement for an additional premium. You can choose between single-use or annual (unlimited uses, up to the number of events you're insured for). Please call the office or email sheri@specialtyinsuranceagency.com for more information.
- Primary/Non-Contributory endorsement:
- This endorsement ensures your policy is the first (primary) to respond to a claim, and it will not try to force the additional insured's policies to share the cost (they will not contribute).
- Performer (not MPEP performers) and Mobile Vendor clients have this endorsement included with their policies for no additional premium.
- MPEP clients must purchase this endorsement for an additional premium. You can choose between single-use or annual (unlimited uses, up to the number of events you're insured for). Please call the office or email sheri@specialtyinsuranceagency.com for more information.
- Form CG 20 26 endorsement:
- This form schedules the additional insured in your policy. There is no negligence stipulation, and it provides a third party with liability protection tied directly to your specific ongoing operations or property use.
- Mobile Vendor and MPEP clients do not need to pay an additional premium for this endorsement if it is needed by the event/venue/entity. However, an additional email to certs@specialtyinsuranceagency.com may be needed to complete your request.
- Performer clients (not MPEP performers) must purchase this endorsement for an additional premium. Additionally, we need something in writing from the event/venue/entity as to why they need it and/or why they're rejecting the endorsement(s) included with the policy. Please call the office or email certs@specialtyinsuranceagency.com for more information.
Commercial Auto Liability:
Commercial Auto Liability coverage handles claims such as injuries to others or property damage that may occur as a result of you (or one of your employees) driving a commercial vehicle for work. This coverage is often included in general contracts. However, not every client actually needs it! If your operations do not include driving a commercial vehicle, you can often have this requirement removed.
Example: If you're a performer Ubering or taking a bus to the venue, Commercial Auto coverage can often be removed from your contract.
Example: If you're operating a food truck that drives directly onto the fairgrounds, Commercial Auto coverage will likely be needed.
SIA does not currently offer Commercial Auto Liability. If you need this coverage, we recommend reaching out to the company that handles your personal auto insurance or doing a quick Google search for agencies near you.
Workers' Compensation
Like Commercial Auto Liability, Workers' Compensation (Comp) is often included as a standard requirement in contracts. This coverage helps pay for medical expenses and lost wages if an employee is injured while working.
If you do not have employees, this requirement may not apply to you. In which case, many places will allow you to:
- Sign a waiver.
- Provide proof of your business structure.
- Remove the requirement from the contract altogether.
SIA does not offer Workers' Comp coverage. If you need this coverage, we recommend doing a Google search for Workers' Comp agencies in your area.
Umbrella and/or Excess Liability coverage
Umbrella and Excess Liability policies provide additional liability limits above your Commercial General Liability (CGL) coverage. For example, if you carry a $1M/$2M CGL policy and the venue requires $2M/$4M or higher limits, they may request an Umbrella or Excess policy to bridge the gap. However, these policies can be significantly more expensive than standard CGL coverage.
We always recommend negotiating an Umbrella/Excess requirement before purchasing additional coverage. Many venues are unaware of the cost associated with higher limits. Once they understand the expense involved, they are often willing to:
- Lower the required limits.
- Accept your existing coverage.
- Share in the cost of obtaining additional coverage.
If higher limits are ultimately required, SIA may be able to help! Please send an email to info@specialtyinsuranceagency.com for more information.
In closing
Contracts can feel overwhelming, especially when they are filled with insurance terminology. The important thing to remember is that insurance requirements are not always set in stone. They can be clarified, negotiated, or removed depending on your specific operations. Before spending money on additional coverage, endorsements, or policies, it is worth taking the time to understand what is actually being asked of you and whether it's necessary. Try asking yourself these questions:
- Do they truly need this coverage, or is it simply part of a standard contract template?
- Is this requirement actually applicable to my operations?
- Can the requirement be negotiated?
- Is the event/venue/entity willing to share in the cost if the additional coverage is required?
And if you're still not sure? We're always here to help! Give us a call at 715-246-8908 or send an email to info@specialtyinsuranceagency.com. We'll help you understand the requirements, explore your options, and determine the most cost-effective path forward.
