CLAUSE: Insure This
“Group will obtain and maintain and provide evidence of insurance upon request in amounts sufficient to provide coverage for any liabilities arising out of or resulting from the respective obligations pursuant to this.”
EFFECT: What Does That Mean?
Always be wary of vague words like “sufficient” and “adequate.” When a group contacts its insurance company to have a policy written for a meeting, the insurance company writes the policy in a specific dollar amount. What dollar amount is “sufficient to provide coverage for any liabilities?” If the group accidentally knocks a hole in the wall of the meeting room during set-up, damages may be less than $1,000. If the group accidentally knocks over a can of sterno, burning the entire hotel down, damages could be in the millions or billions of dollars.
Insurance policies are written with a cap on the total amount of insurance available to the insured. This cap, or maximum amount to be paid out by the insurance company, also affects the price the group must pay for the insurance policy. The more risk the insurance company takes (the higher the total amount that may be paid out), the higher the premium. In the case of insurance for a meeting or event, a common policy amount for a Commercial General Liability policy is $2 million per occurrence, $4 million in aggregate. “Per occurrence” means that the insurance company agrees to pay up to $2 million dollars for each accident, damage, or liability occurrence, but under no circumstances will it pay more than $4 million total (“in aggregate”) on the policy.
Insurance clauses should always be written to specify the type of insurance required and the policy amounts required. Also, the clause should be reciprocal, specifying that the hotel must also have insurance of the type and in the amounts required for the group. Types of policies, coverage, and exclusions vary widely, so meeting planners should always consult with their insurance company before agreeing to insurance language in meetings.
Tyra W. Hilliard, Esq., CMP (email@example.com) is a meetings industry attorney and Assistant Professor of Event and Meeting Management at The George Washington University in Washington, D.C.
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