Having the proper insurance for your exhibit is the best way to cover your assets when faced with a trade show snafu. Here's what you need to know about your exhibit-insurance options.
Exhibit and event managers deal with a lot of unknowns, most of which get worked through during the planning process. But what protection do we have when we're blindsided by a mishap that is totally out of our control, e.g., the semitrailer carrying our exhibit gets totaled or our expensive audiovisual equipment mysteriously disappears? The best professional safety net is the same one we often rely on when disaster befalls our personal lives: insurance.
There are basically four types of coverage exhibitors can secure to mitigate common exhibiting risks:
➤ Commercial general liability
covers bodily injury or property damage to a third party.
➤ Exhibit-property coverage
insures your exhibit and other company property used at a show.
➤ Limited-liability valuation
is coverage provided by your transportation carrier for property damage during shipment.
➤ Event-cancellation insurance
covers financial losses in the event that the show doesn't go on.
Carefully selecting the proper insurance will keep you and your company sufficiently covered – and prevent exhibit-related incidents from becoming catastrophic calamities.
Commercial General Liability
Think back to that space-rental agreement you signed a year before the show. In the three minutes you had to select space and turn in your contract before scurrying back to your exhibit, did you laboriously pore over the terms and conditions on the back of the agreement? Did you read the 17 pages of rules and regulations in the exhibitor services manual? To refresh your memory, you probably signed something that says you'll maintain a certain level of liability insurance coverage, usually $1 million per occurrence and $2 million aggregate for multiple occurrences. This is called commercial general liability (CGL) during the "lease period" of the convention venue.
This insurance provides coverage against damage or injury to persons and property during setup, show days, and dismantle. The contract usually requires that this CGL policy will name any or all of the following as additionally insured parties during the lease period: the show organizer, show manager, general services contractor, official subcontractors, and venue. You may also be required to send the show manager a copy of this policy/rider or bring it to the show to be viewed upon request.
So where do you purchase this type of insurance? If you work for a corporation, it's almost a given that you already have a CGL insurance policy in place on which you can just piggyback the show's specific requirements. Corporate insurance is usually administered by your internal risk-management or finance department. If neither handles it, one can refer you to your company's insurance agent. The simplest way to provide the insurance carrier with the information it will need is to send it a copy of the space-rental contract and/or the pages from the exhibitor services manual that list the specific insurance requirements, dates of coverage, and names of the various entities that need to be listed on the policy as additional insured parties.
If your organization doesn't carry this type of insurance coverage, you can purchase a policy through companies that specialize in exhibitor insurance. Depending on the length (one show vs. an annual policy) and amount of coverage required, the cost of these policies can range from $125 to $1,000. Some show organizers offer CGL coverage through a preferred carrier in their exhibitor services manuals, while many mandate purchasing coverage through their preferred carriers for $125 to $150 per show.
The penalty for not having the insurance show management requires varies from one show to another. But if there is an incident and you can't provide proof of the requested insurance, your exhibit can be removed from the trade show floor – and you could potentially face severe legal and financial ramifications.
What would happen if your exhibit house burned to the ground with your brand-new exhibit in it? What if the truck transporting your exhibit was totaled in an accident, and your exhibit was demolished? What would you do if your 50-inch OLED monitors were all somehow mysteriously "misplaced" somewhere between arrival at the advance warehouse and delivery to the convention venue?
Talk with your boss and corporate risk manager to determine what coverage you currently have on your exhibit properties. Ask the following:
➤ Is your exhibit currently covered by a corporate-property policy, or can it be covered with the payment of an additional premium?
➤ What are your coverage limits and deductibles (e.g., $150,000 per show or occurrence with a $10,000 deductible) with your current policy?
➤ Does the policy cover your exhibit properties for replacement value or depreciated value? If it's for depreciated value, what is the current value of your exhibit properties and what would it cost you to replace them?
➤ Is your coverage sufficient to make you "whole" after the claim? Would you have enough claim monies to replace or repair your exhibit properties in the event of loss or damage?
➤ Under what circumstances are your exhibit properties covered by this policy: per show, per half year, or per year? Are they covered while off company premises, e.g., at your exhibit house, in a carrier's truck, or at the advance warehouse?
➤ Do you need to notify anyone in your risk-management department or at the insurance company when your exhibit is on the road?
➤ What do you have to do to notify the insurer of a loss and make a claim (e.g., make a report with convention-center security, file a report with the local authorities, call a toll-free number or agent to report the loss, take photos for documentation, notify corporate risk management, etc.)?
➤ What documentation would it take to file a claim, such as serial numbers of lost equipment or invoices for the exhibit properties?
➤ How long after an incident do you have to file the claim paperwork? Some policies only give you a limited time to file the claim, such as 72 hours, and that time frame could very well be while you're still at the show. Other policies I've seen give you up to six months after an incident.
Some corporations choose not to cover exhibit properties because they don't want a series of small claims filed that could cause a jump in their overall corporate insurance premium rates. If you learn that your company falls into this category and considers itself "self-insured," which means you have no external coverage for claims, or if it carries a high-deductible policy, figure out how you would cover a loss. Is your budget robust enough to absorb the cost, or do you need to purchase a supplemental policy from a firm that specializes in exhibitor insurance?
Limited-liability valuation, also called released-value or trip-transit valuation, is automatically provided to you, the shipper, at no additional cost as part of your carrier's liability under the shipping tariff. It covers the freight in your shipment during the time it is loaded on your carrier's truck, from one point of origin to one point of destination. Carriers' limits on valuation range from $.30 to $.60 per pound, per article of freight, or are sometimes determined on a per-item basis (e.g., $100 per item), whichever amount is greater.
An important side note: This coverage is "valuation," not insurance. These two terms are often confused and considered synonymous, but carriers are not insurance companies and therefore cannot legally call this coverage "insurance."
Early in my career, I learned the harsh reality about making a valuation claim. An expensive graphic panel came up missing from a pallet during shipment to a show. When I inquired about coverage, the carrier's agent asked me about the size and weight of the graphic. I stated that it was 18-by-18 inches and mounted on foam board, so it probably weighed about 3 pounds. The agent laughed and told me the company probably wouldn't process a claim for $1.80 (3 pounds at $.60 per pound).
KEY INSURANCE TERMS TO KNOW
Additional Insured (AI) – This term refers to the additional parties (often the show organizer/manager, general services contractor, event facility, and official show subcontractors) who, by contract, must be added to a commercial general liability policy at no additional premium. A named insured's vendors cannot be listed as additional insureds.
Certificate of Insurance (COI) – A COI is a document that provides information on specific insurance coverage. The certificate offers verification of the insurance policy in place and usually contains information on the types and limits of coverage, the insurance company and policy number, the named insured(s), and the policy's effective period.
Host Liquor Liability Insurance – This insurance offers protection for the event holder (who is not in the business of furnishing alcoholic beverages) against lawsuits by parties whose injuries arise from the actions of an intoxicated guest. Host liquor liability coverage applies only if there is no transfer of money for alcohol or service/product packages that include alcohol. If there is any money changing hands and alcohol is served, host liquor liability coverage doesn't apply.
Liquor Liability Insurance – Liquor liability insurance provides coverage and defense for an event holder who charges for alcohol and is sued for bodily injury or property damage caused by an intoxicated guest. It generally covers the venue, the event planner, bartenders/servers, and the event host in negligence lawsuits (especially in states with "social host" laws) if an attendee or employee overconsumes and is involved in an accident, causes injury, or damages property.
Named Insured – The named insured is the organization or individual (generally the policy holder) with whom an insurance contract is made.
Third-Party Claims – Liability claims brought by persons allegedly injured or harmed by the insured are third-party claims. The insured is the first party, the insurer is the second party, and the claimant is the third party.
If this amount of limited-liability coverage isn't adequate, carriers may offer to sell you additional valuation, also known as full valuation protection, at a price of around $8 to $12 per $1,000 of value you wish to cover in thousand-dollar increments. This cost will be added as a line item to your invoice for each shipment.
Don't forget that this valuation is in force only when the shipment is on the truck. When the shipment hits the docks – at the advance warehouse, convention venue, or exhibit house – there is no further coverage. It only covers property being shipped while it is in the carrier's possession.
The most comprehensive way to cover your shipment's value is to add a "door-to-door" all-risks insurance rider (aka "portal-to-portal rider") to your corporate insurance policy. This coverage can include physical damage or loss during transit or on the show floor, water damage, breakage, and theft or pilferage. Work with your corporate risk-management department to determine the replacement value of your entire shipment and how much risk you want to assume with your deductible. All-risk policies are also available for purchase through some freight carriers and online insurance brokers.
Event-cancellation policies can be purchased with varying policy limits (most start at $10,000 and go up to as high as $50,000 without special underwriting) to cover anything from a single exhibit at a single show to multiple exhibits for an entire year. Depending on the types of risks covered, premiums can range from a few hundred dollars to $1,000.
Incidents typically covered by event-cancellation insurance include terrorist activities, venue damage, labor disputes, nonappearance of principal speakers, natural disasters, and the lateness or absence of items essential to the event, such as exhibit properties. Some policies also include coverage for future marketing expenses if the event is rescheduled.
Trade show disasters can and probably will happen to you. But if you're ready with the right insurance, you'll not only ensure your exhibiting program's ability to bounce back from any unpleasant scenario, but also sleep much better at night knowing that no matter what happens, your program is covered.
CTSM, CEM, CMP, CMM
"The Booth Mom," is an independent exhibit project manager, trainer, speaker, consultant, and an Exhibitor Conference faculty member. CandyAdams@BoothMom.com