The Occurrence limit is the maximum amount the insurance company will pay per incident, regardless of the number of persons injured (claimants).

An Aggregate limit is the same as a cap. It is the total amount, regardless of the number of separate incidents, the insurance company will pay out for all claims during the term of your policy.

Example: Your policy has a $1,000,000 Per Occurrence limit & a $1,000,000 Aggregate limit. During the term of your policy, you have 3 claims that are awarded against you. $250,000 was awarded on one claim, $500,000 was awarded on the second claim and $300,000 was awarded on the third claim. Total amount awarded: $1,050,000. The insurance company would pay out a total of $1,000,000 (Aggregate max policy limit). You would be responsible for the balance of $50,000.

Many times, your rental/lease agreement will dictate what each of these limits must be. They will usually require a minimum of $1,000,000 per occurrence and $1,000,000 or $2,000,000 Aggregate. In today’s litigious environment, it is no longer unusual to see $5,000,000 & $10,000,000 limit requirements. Especially on higher risk events.

This endorsement may be required by facilities, and others, to guarantee that your policy pays first on a claim before theirs do (primary) and that their policy will not contribute towards the payment of a claim at all (noncontributory).

This significantly increases your risk of a larger claim and insurance companies charge extra premium for the increased risk.

While a Primary & Noncontributory endorsement seems similar to, or overlap, coverage provided by Waiver of Subrogation endorsements, primary and noncontributory protect the additional insured’s insurance policy from contributing toward the payment of a claim during the claims process; while the waiver of subrogation is intended to provide protection from having to reimburse all or some of the payout after the claim is closed and the insurance company looks to sue other responsible parties for reimbursement.

Losses typically happen through someone’s negligence. In general, the negligent party should be liable for such negligence.

Your insurance company could choose to sue a third party to recover the amount of a claim they paid if the loss was caused by that third party. This is called subrogation.

Some contractual agreements, including some facility rental agreements, require you to waive your right of subrogation (and therefore your insurance company’s rights) against them in the event of a claim.

Many, but not all, general liability policies allow you to waive your rights of subrogation as long as it is required by written contract.

There is additional cost to have the endorsement added to your policy.

When you have negotiating power when drawing up contracts (with sponsors, co-promoters, subcontractors, vendors and perhaps even facilities, etc.)  you should try to implement prudent risk management techniques by following these guidelines:

• Rights of subrogation should be waived only to the extent of your available insurance recovery. (You don’t want to be faced with waiving your rights of recovery, then having a $2,000,000 loss when your insurance policy limit is only $1,000,000).

• Waivers should be mutual. If you are waiving your rights of subrogation, the other parties of the contract should waive their rights against you as well. You probably won’t get this with a facility/venue contract. But you should try to get it on every contract you sign.

While Waivers of Subrogation seems similar to, or overlap, coverage provided by Primary & Noncontributory endorsements, primary and noncontributory  protect the additional insured’s insurance policy from contributing toward the payment of a claim  during the claims process; while the waiver of subrogation is intended to provide protection from having to reimburse all or some of the payout after the claim is closed and the insurance company looks to sue other responsible parties for reimbursement.

No, they would still need their own insurance to be properly protected.

A common misconception with additional insureds is the belief that if they are named as additional insured on a policy, they don’t have to worry about buying their own insurance. However, an additional insured only has protection under your policy if they are not responsible for the claim. They would not be protected under your policy if they were at fault for a claim.

The reasoning behind this is simple. If you are responsible for a claim, your own insurance should provide protection, including providing protection for the additional insureds. If an additional insured is responsible, their own insurance would have to provide them coverage. If you are both equally or partially responsible for the same claim, then each would rely on their own insurance for protection.

Example 1: You are promoting a festival and name Great Beer Company on your policy as an additional insured as required in your sponsorship agreement. Through no fault of Great Beer, a patron slips and falls and brings suit against you and Great Beer. Your policy would provide coverage for Great Beer.

Example 2: Same scenario as above. But instead of a slip and fall, a patron becomes ill from drinking a bad batch of beer manufactured by Great Beer and sues both you and Great Beer. Your policy would protect you, but would not provide protection for Great Beer. They would have to rely on their own insurance.

You do if you are selling, serving, manufacturing, furnishing or distributing beer, wine, spirits or alcohol at your events, or if someone is paying you a cut of alcohol sales.

The standard general liability policy excludes liquor related claims if you are in the business of selling, serving, manufacturing, furnishing or distributing liquor (alcohol, beer, wine, spirits, etc.). This exclusion applies even if you are “in the business” temporarily (example a 1 day event where liquor is served), and it applies even if you don’t make a profit from the sale of liquor.

Nonprofit corporations are not exempt. They would need liquor liability insurance just like a for profit corporation or individual would.

Charging an admission fee to an “open bar” event is considered being in the business of selling liquor.

Receiving a percentage of liquor sales from someone else (like the bar, or the promoter) is considered being in the business of selling liquor even though you do not directly sell or serve.

Having a liquor license in your name is considered being in the business of selling liquor. Even if others are doing the selling or serving for you.

Many, but not all, general liability policies include Host Liquor Liability. Host Liquor applies when hosts of a business or social functions serve alcohol without a charge or admission fee.