Ways to Reduce Legal Risks When Holding a Nonprofit Event in Someone's Home

With some forethought and advance preparation, your nonprofit can minimize the risks that either the homeowners or guests will claim you owe for damages after a special event held in a home.

Worried by the various types of risks your nonprofit could face when hosting an event—such as a donor appreciation party or a dinner and silent auction—in someone’s home? The last thing you want is for your nonprofit, or the homeowner, to face liability after an accident or injury. Here are some suggestions on how to decrease those risks.

Make Sure to Have Adequate Insurance Coverage

While the property owners may have insurance for themselves and their home, your nonprofit will need special event insurance to protect itself. Event insurance is designed to protect your nonprofit from liability claims made by attendees, volunteers, staff, sponsors, vendors, and even the property owner.

Event insurance is something your nonprofit may be able to have added onto its business insurance policy and if not, can be purchased separately. Many insurance companies offer a quick online process to obtain event insurance, and their policies generally cover a combination of things, including injuries and damage to property.

Depending on the size of the event, the price of these policies can be expensive, but it’s worth the piece of mind knowing your nonprofit is protected.

Sign Contracts With the Relevant Parties

Contracts are an important business tool and one that nonprofits often underutilize. For events, your nonprofit should create a signed contract between itself and its sponsors, vendors, volunteers, employees, and attendees. There should also be a signed contract between the nonprofit and the property owner, even if the property owner is a board member or otherwise affiliated with the nonprofit.

While each contract should contain different language dependent on the relationship between the nonprofit and the other person or company, each of those contracts should include a liability waiver and indemnification clause.

The liability waiver states that the nonprofit is not liable for injuries incurred during the event, except in certain situations, like if someone from the nonprofit intentionally caused injury.

The indemnification clause is important because it says that if an injured person sues your nonprofit, the other party to the contract will defend your nonprofit by paying for court costs and attorney’s fees. For everyone except your attendees, your nonprofit should have a formal contract signed by each person or company involved in the event.

It’s a little more difficult to have each attendee sign a formal contract. Instead, your nonprofit may want to have this language on an event ticket. Or, if your attendees register online, the language could be inserted on the registration form and the attendee can be required to check a box and initial indicating that they read and understood the language.

Here’s some sample language that is often used in contracts, but remember, this is general language and your nonprofit should consult with an attorney prior to using it:

I am attending/involved in [nonprofit’s name] event on [date] as a [sponsor, vendor, volunteer, employee, entertainer, or attendee]. I understand that [nonprofit’s name], its owners, officers, employees, and volunteers (collectively, Releasees), are not responsible for my safety or the safety of my property during this event. I understand that the Releasees are not responsible for any damage caused to myself or my property during this event. I agree to release, waive, hold harmless, and promise not to sue, Releasees, from any and all liability, claims, demands, losses, or damages, to myself and my personal property, as a result of my participation in this event, except for any injury or damage caused by the intentional misconduct or gross negligence of the Releasees. I agree to indemnify and hold harmless each of the Releasees from any loss, liability, damage, or cost which they may incur as a result of such a claim, including reasonable attorney’s fees.

Use Common Sense When Planning and Holding Events

Your nonprofit can avoid many liability issues by simply using common sense. If there is something wrong with the property, warn the attendees and staff about it. If your nonprofit will be serving alcohol, be careful with who you're serving and how much everyone is drinking. If there’s someone who wants to volunteer but you’re seeing red flags during the interview, it’s probably best to skip over that person. Don’t be so excited about the event that you let common sense go by the wayside.

Events are fun and a great way to bring in funds for your nonprofit’s cause. Having an event in someone’s home can help alleviate the costs of hosting an event. Being aware of the legal risks that can come up, and how your nonprofit can avoid those risks, will help ensure that your nonprofit has a successful event while minimizing legal risks.

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