People use rental halls for all sorts of functions, such as wedding receptions, graduation parties, religious celebrations, community dances and Bingo. For the hall's operator, though, there's a broad range of risks involved, including property damage caused by clients or weather, accidents, injuries, and other risks such as lawsuits for nonperformance. Another set of risks is posed by food and alcohol service, whether your hall provides it or you bring in subcontractors, like catering services. Here are the steps you need to take to get the best insurance for your rental hall.
Take pictures of the hall. Include the public areas like the seating area, dance floors, bar, stage, hallways, restrooms, and entryways, as well as the behind-the-scenes areas including the kitchen and food preparation areas, dressing rooms, employee break and locker rooms and storage rooms. Other areas that should be photographed are emergency exits and lighting, sidewalks, security systems, outdoor lighting, parking lot, and landscaping. Well-lit pictures give the underwriter a better understanding of the risks and help to determine coverages needed and rates to be used.
Gather financial records (income statements, balance sheets), copies of business, food service and liquor licenses, as well as copies of contracts and liability waivers for clients and other subcontractors (entertainers, catering services).
Begin shopping for coverage. Whether on-line or locally, search for independent agencies first. Doing so will save you time and hassle, because one agency can get quotes from several different insurance companies. If you go to exclusive agencies, you'll get quotes only from one company.
Complete required applications, answering all questions honestly and to the best of your knowledge. Attach copies of the licenses, pictures, contracts and any other pertinent information.
Review coverage needs with the agency. Coverages for property, contents, business income, rental equipment, food contamination and spoilage, crime, general liability, employee dishonesty (theft, embezzlement), liquor liability, employee benefit liability, workers compensation and excess liability need to be included in business policies. Level of coverage, however, can be less or more, as dictated by the size and scope of the rental facility.
Indicate any parties that will need to be named as Additional Insureds on the policy. This can also be done during the policy period, by endorsement. Typically, this is reserved for any other party that has a financial interest in the facility (banks, silent partners, etc.)
Pay the premium, or have it financed (through the insurance company or a separate premium finance company), and comply with any underwriting requirements, in order to keep coverage in force. Always notify your agency if any new property will need to be covered, if old property is sold, or if you need additional, specialized coverages.
To further protect yourself, require subcontractors and clients to provide proof of their own coverages as well. Doing so can help keep your insurance rates lower.
Not carrying insurance, or carrying too little coverage can leave you exposed to financial ruin in the event of a loss. Lying on insurance applications or causing loss intentionally to collect insurance settlements is insurance fraud, and is governed by state and federal laws, subject to fines and imprisonment.
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