Who should pay for a vendor’s insurance policy?
I’ve recently had clients who secured their own vendors for elements of their wedding, and we’ve run into issues concerning vendor insurance policies. One of the things I do as a coordinator is collect certificates of insurance from vendors to provide to the venue. One vendor sent me their policy, and I found out later from the client that the vendor required the client pay for a one-day policy that cost $100. This was not the first time I heard of a vendor doing this, and I did not realize how common this was for vendors to require of clients. Another recent vendor has an article in their contract stating the client is responsible for acquiring an insurance policy on behalf of this vendor, should the venue require it. I want to share information about this for vendors and clients, and provide my humble opinion about who should be responsible for acquiring and paying for a vendor’s insurance policy.
For those of you who don’t know, a certificate of insurance (COI) is a document that verifies the insurance policy of a business. In this case, we’re talking about wedding service vendors (e.g., planners/coordinators, DJs, photographers, videographers, decorators, etc.). The insurance policy “grants protection against liability for workplace accidents or injuries to conduct business” (read more at Investopedia).
According to multiple vendors I’ve had communication with recently who did not have an insurance policy, it is only more recently becoming common for wedding venues to require vendors—specifically, those who will be onsite for a period of time to perform services—to provide a COI with the venue listed as a certificate holder. Personally, I have always been asked by venues to provide a COI as the coordinator for events from venues I’ve worked at, and we’ve had our insurance policy as long as Cardi Elegant has been in existence. I thought this would be the case for all vendors, but I realized early on that this was not the case.
Why wouldn’t a business owner want to ensure they are protected in the event of an incident on the job? Here are some of the reasons vendors have shared with me:
I’ve never been required to have insurance before.
I don’t work enough events to pay for a policy.
The client is responsible for paying for an insurance policy.
To the first comment, my response is: just because you haven’t been required to have insurance by a venue doesn’t mean you shouldn’t have it. It’s basic business owner responsibility to ensure you and your team members are covered under an insurance policy. To the second comment: okay, so you book one event per month. Insurance policies are not that expensive that whatever you charge would not cover the policy and more. I’ll get into the cost of insurance policies in a bit.
To the last comment about making the client responsible for paying for an insurance policy… shame on you. Everyone knows wedding services aren’t exactly cheap. People pay us hundreds or thousands of dollars to provide services. Some of these people are working on very limited budgets and are scrounging to have the wedding of their dreams.
Some of you may counter, “Well, they want a wedding, it costs money. Weddings are a luxury. If you can’t afford it, don’t have a wedding.” WOW. The lack of empathy. Yes, they want a wedding, and they are paying your fees, which SHOULD include amounts for labor, materials, taxes, and any (reasonable) administrative fees… Administrative fees should be applied to the time you spend on recording, monitoring, and administrative expenses like INSURANCE.
Maybe the problem is that vendors think business insurance policies are as expensive as car insurance or health insurance can be. That’s not the case. There is usually an initial fee you have to pay, and a monthly payment. I’ll say for my own policy through biBerk Business Insurance, I paid $27.50 for the first month, and have paid $24.75 per month since. LESS THAN $30 PER MONTH.
Do you know how much an insurance policy costs for a one-day policy? In my research, gathering quotes from 6 different companies recommended by vendors to my clients, the range was between $100-$200, and varies based on the type of business. For example, it seemed to be higher for 5-piece live band than for a DJ. Vendors who require clients to pay for a one-day policy are adding $100+ to the client’s cost for hiring them. I do not approve. Another thing is… many venues require the client purchase event insurance of their own. Now you’ve required them to pay for their own on top of yours, which costs about 3 times more for a one-day policy than you would pay for a whole month.
All the vendors I recommend to clients are vendors who have their own insurance policy already. The vendors I’ve worked with who did not have insurance, are vendors clients hired before retaining our team’s services. I always try to advise these businesses to get their own policy so they don’t have to worry about not having it in the future, and so the client isn’t spending unnecessarily. For every great vendor out there that does not have an insurance policy, is an even greater one that does.
Advice to clients: As you are considering vendors for your special day, inform yourselves as to whether they carry their own insurance policy, and if they do not, who do they expect to pay for the one-day policy? If you are responsible for purchasing a one-day policy, add that cost to the total amount you will pay toward this vendor. I’m not saying to completely discount this vendor from your options. There could be justification for selecting a vendor regardless of having to pay for the insurance. Here are a few justifications:
They are the only vendor that provides the service/experience you are seeking.
They are the only vendor available on your event date for this service/experience.
The total price invested in their service (including the cost of the insurance policy) is cheaper than other vendors who offer the same services.
Other than that, I think it’s unnecessary for you to have to take on the added expense of an insurance policy for vendors who should really already have it. Vendors should not be okay exposing themselves and their team members to liability.
Let me know your thoughts on this topic. I certainly do not claim to know everything, and maybe there’s information I’m missing to understand why it’s acceptable to have clients pay for one-day policies instead of us having our own consistent policy.
