Eco-Friendly Events: Can Sustainability Efforts Lower Insurance Costs?

Reduce, reuse, recycle. Sustainability used to just be putting a few recycling bins out at events and being frustrated that guests mix it up with the trashcan. Now, the events industry has learned more about reducing waste, renewable energy, and sustainable venues. But do green initiatives have any impact on insurance premiums?

A cleaner event venue with recycling and trash cans means lower chances of slips and falls. That’s just one way sustainability can lower your liability risk. Let’s go over the relationship between eco-friendliness and insurance costs, sustainable event options, and practical steps for event organizers.

The Connection Between Risk and Insurance Costs

How insurers determine premiums

Premiums are mainly decided based on the insurance company’s risk assessments. A greater risk means the event is more likely to result in insurance claims, or the claims are expected to be more costly.

For example, if an event serves liquor, the liability risk increases dramatically. Overserved guests may get injured in an incident and file a lawsuit against the event organizer.

On the other hand, if your event is relatively safe, you can obtain lower insurance quotes. Corporate events are typically cheaper to insure because they are held in controlled, lower-risk environments.

Traditional factors

Event insurance premiums rely on many factors, such as:

• Event size: Larger crowds are more expensive to insure because of greater risks. If a fight or fire breaks out, for example, it will be much harder to keep people from getting hurt and needing to evacuate.

• Location: Some venues are riskier. Outdoor spaces need to account for weather risks that result in cancelled events, like thunderstorms. Crowd mismanagement happens more in high risk locations.

• Type of activities: Modern concerts often use pyrotechnics, flying props, and other impressive but risky technology. Sports events are dangerous because spectators and participants can get severely hurt. Holiday festivals have food stalls and kitchens that can set ablaze and be hard to put out.

• Safety protocols: If your event has strong safety measures in place, like security teams or emergency response protocols, they may be able to lower your event insurance premium.

Where sustainability efforts may intersect with risk reduction

Solar power, waste management, green transport vehicles, and green venues can all coincidentally lower the risk of your event. The overlap can benefit the insurance company, event host, and guests by creating a safer event.

Sustainability Practices That Impact Risk

Waste reduction & recycling

Trash buildup can be a hazard at events, especially ones with catering and drinks. Plentiful trash bins and recycling bins can help events have fewer hazards from trash buildup.

Energy-efficient equipment

Energy efficient equipment can be safer for events, with reduced fire and electrical risks. Solar energy has a significantly lower fire risk.

Sustainable venues

Venues made or operated with sustainability in mind generally have safer infrastructure and better compliance with safety codes. LEED-certified buildings, for example, are favored for their healthier and safer construction practices.

Eco-friendly transport options

Green transport options can lower the chance of vehicle-related accidents, emissions, and liability risk. However, it depends on the green transport option.

Shuttle buses: If you encourage carpooling, it will mean less traffic congestion on the way to your event. Still, if the shuttle has a problem on the road, that can cause a mass incident preventing many event-goers from arriving safely, so the risk is different.

Walking and cycling: Walking and cycling are fantastic for reducing the overall emissions due to your event. If your event offers safe walking routes and secure bike parking options, it lowers the risk of car crashes and other transportation accidents.

EV charging stations: Having an electric vehicle charging station at your event can support sustainable driving.

Digital ticketing and communications

Paper tickets and documents can be lost, mishandled, or incorrect. Going completely digital is a popular risk management strategy for events these days. Examples of cutting down on paper waste include:

• Digital event apps and passes
• Email and SMS alerts
• Scannable QR codes
• Mobile check-ins

Insurance Industry Perspective on Green Events

From an insurance company’s perspective, green events typically bring them lower risks. Sustainable practices during an event signal that the event organizer is proactive and committed to meaningful missions, such as environmentalism. The event organizer will also likely be more committed to the safety of event guests, managers, and vendors. It’s natural for event insurance companies to be happier to partner with event hosts who act with professionalism

Insurers increasingly tracking ESG efforts

ESG stands for Environmental, Social, and Governance. Around 80% of global investors believe that a company’s ESG management influences investment decision making. In accordance with this perception, more insurance companies are beginning to look at a business’ ESG efforts when assessing risk.

Possible incentives for eco-friendly practices

There are already insurance products that give great incentives for eco-friendly, green practices. For example, green buildings often receive incentives in the form of discounts for installing solar panels, energy efficient appliances, and other renewable energy options.

Current limitations

At the moment, for event insurance policies, sustainability is not yet a major premium-reducing factor. While it can make a small difference for some insurers, there are still limitations to how much you can save.

Indirect Ways Sustainability Can Lower Costs

Fewer claims due to reduced waste and safer equipment

If you’ve ever walked up to a wastebasket at an event, you’ve probably experienced the distaste of seeing an overflowing trash can. Smelly fruit, paper, Waste bins overflow if there are not enough trash cans posted at convenient, high foot traffic locations.

Improved public perception and sponsor confidence

Events with good public perception tend to gain more fans. Sustainability is on a lot of people’s minds, but they often feel like the events available to them do not care about eco-friendly choices. These people will feel better supporting events that they know are dedicated to green initiatives and sustainable methods.

Sponsors may also feel more ready to invest in events that have begun sustainable efforts because of the better public perception.

Easier compliance with local environmental regulations

In some states, you will need to comply with local environmental regulations and standards. Otherwise, you might have to pay fines or penalties.

Note that if there are any environmental consequences from your event, such as an oil spill, this is usually not covered by event insurance. You may need special environmental impact insurance.

Better business relationships due to shared sustainability values

If the event host, vendors, and/or the venue managers have the same green values, it allows for better, more harmonious relationships. There is a greater chance that these groups will work together again in the future.

Practical Steps for Event Organizers

Document eco-friendly measures to show insurers

Organizing any event requires meticulous documentation of all communications, receipts, and purchases. Documenting your eco-friendly measures. It becomes proof to your insurance company that you are partaking in green, proactive risk management methods.

Choose venues with green certifications

Certificates and ratings are used to measure the environmental sustainability of a building or location.

The LEED rating system is the most widely used green building rating system. It can be applied to any project type or phase, from residential buildings to entire cities.

A more specialized system is the ISO 20121, a guide for sustainable event management.

When choosing an event venue, organizers can look at a venue’s green certifications and rating details to learn more about the sustainability (or lack thereof) of a potential venue

Partner with vendors who carry both liability insurance and sustainability credentials

Vendors with liability insurance are already desirable for event organizers who want lower liability risk. If you add sustainability credentials as a requirement, it can greatly decrease the number of vendor options available to you. However, choosing sustainable vendors, like local farmers, can go a long way in improving the sense of community and eco-friendliness at your event.

Explore insurers offering “green event” discounts

Some event insurance companies will provide incentives and benefits to event organizers who adopt sustainable practices at their events. Insurers may also assess your event’s risk and lower the premium if you have adopted safety measures like safe, sustainable buildings.

Case Examples of Green Practices at Events

Let’s take a look at a couple of event situations where sustainable practices can reduce risks or lower insurance needs.

Music festival switching to solar-powered lighting reduces electrical hazards

A large outdoor music festival needs enough liability insurance coverage to safely operate. Electrical and fire hazards are a significant risk at music festivals. A small spark can erupt and cause widespread chaos.

Solar power, like solar lighting towers, can lower emissions and noise pollution. This can mitigate the risk of fire hazards, electrical issues, and fuel leaks.

The lower the fire risk, the less likely a large fire will spread and destroy venue property or hurt event guests.

Corporate conference going paperless lowers logistical errors and fraud risks

If you have ever run an event using paper, you likely know how much paper needs to be used. It’s expensive to use thousands of pieces of paper.

Going paperless is a great way to lower fraud risks, since everything will be clearly preserved digitally.

Farmers market with strict composting and recycling rules minimizes slip-and-fall risks

Trash on the ground becomes slip and fall risks. Slip and falls are extremely common compared to other liability lawsuit types. If your event has litter on the ground because of overflowing trash cans, the injured guest may sue you for their medical expenses.

Future Outlook

Thinking about environmentalism can be discouraging, with news articles often focusing on the downsides. But many different industries around the world are now prioritizing greener practices, from planting trees to reducing carbon footprint.

Growing alignment between sustainability and insurance

Insurance companies are not known for their sustainable practices. The main reason is because who thinks of sustainability when they think of insurance in the first place? Insurance is about risk mitigation and saving money, not about saving the planet. But insurance underwriters always look out for new risk factors and risk management methods.

Anticipation of specialized “green event” policies

You can always expect the insurance world to continuously come out with new specialized insurance policies. Green event policies will likely give more benefits and features to policyholders who invest in eco-friendly initiatives.

Insurers using sustainability as part of broader ESG evaluation

ESG evaluation refers to evaluating a company’s environmental, social, and governance.

E (for environmental impact) refers to the event’s impact on nature, carbon footprint, resource usage, and more. Sustainability is already a part of a company’s ESG assessment.

Conclusion

Eco-friendly events have a side benefit of reducing your event’s risks. Insurance savings in this situation are indirect but trending up, suggesting that event insurance companies will increasingly reward sustainable choices.

Going green protects the planet and mitigates risk for your bottom line. Review the best event insurance options to protect your event today.