The goal of effective risk management is to make those that host or promote events are financially responsible for the risks that may naturally occur from an event. A detailed review of the contracts should include requirements for indemnification, as well as insurance requirements related to third party liability.
Indemnification is only as good as the strength of the assets of the individual or company that is agreeing to indemnify. In the absence of strong financial resources that would support indemnification, the best recourse is to protect against the legal liability that may arise with insurance.
Essential to an event is a liability policy that will cover the potential claims that may arise from the event. There are a number of specific modifications that can be made to the insurance policies, to assure that they will be responsive .Other considerations may include the use of auto which requires an auto liability policy or employees must be insured by workers compensation.
The required liability insurance limits should be based upon the type of hazards that will be present, the size and proximity of the crowd and if high hazard displays will be part of the event, such as fireworks. The prevailing limits carried by the local entity, which bears similar risk should also be reviewed, to set a fair and equitable limit requirement.