Event planners and small business owners need to know how to protect the investment they make into every project. Here’s how to do exactly that.
Here are the must-know legal requirements for your event planning business
If you own your own business you might have some of these covered already. But it’s good to review just in case there are some new (or even surprising) legal issues you hadn’t considered before.
1. Pay business taxes
If you don’t have your own tax advisor, you need to start by reviewing common tax pitfalls, which include things like deductions specifics and proper documentation.
Problem: It’s your first year as an event planner and because you haven’t had a ton of clients you forego paying quarterly taxes. At the end of the year, your tax preparer tells you that the business was responsible for quarterly IRS payments.
Solution: Speaking with a licensed tax professional to make sure your business is properly set up with the government. And make sure to set aside the proper amount of taxes you’ll owe from each and every job.
2. Get a business license
Some cities will fine or suspend your business activities for not having the right paperwork in order when you’re first starting out.
Problem: You get a mysterious letter in the mail from your city’s small business office claiming you owe them a large lump sum after neglecting to apply for the proper license.
Solution: Pay the fine immediately and get your business registered. Your local office should be able to walk you through the process online or over the phone. A little payment up front now can save you big surprise fees in the future.
3. Create the right client contracts
Every event planning contract you write for a client should include certain clauses that cover all your bases in case things go wrong for either party.
Problem: You’re approached by a longtime friend about a large event they’d love for you plan. Because you have a pre existing relationship or have done business with them before, you figure you might as well avoid the discomfort of asking them to sign anything. Then, in the midst of planning the event, something beyond your control goes wrong and they no longer want to pay you for your time.
Solution: Always have a contract in place. Always. Not only does it protect your business it can also set expectations, explain the scope of your work, and streamline communication if or when issues come up.
4. Get ahead of business name disputes
A quick Google search can save you a potential lawsuit. Don’t let competing businesses (even the ones with out of date websites and barren social media accounts) say you stole their name.
Problem: After registering your business name and receiving your official license, you receive a cease and desist from a company that claims you blatantly copied them.
Solution: Do your research first. But if you don’t and you find yourself in this situation, it’s worth it to start over from scratch, especially if they’re threatening legal action. Sorry, but no business name is worth all you could possibly lose if you went up against them in court.
5. Secure Commercial General Liability Insurance
Whether you’re a corporate event planner or a private party planner, having insurance is the most important thing you can do to protect not just your business but your entire career.
Problem: An elderly person trips over a light cable at your event, breaking their wrist. They say you’re responsible for the accident and their insurance contacts you about the hospital bills.
Solution: As with most of the items on this list, this situation is taken care of with a little advanced preparation. Find the best insurance for your needs, just make sure you have it ready to go well before your first event.
Learn top legal issues in events management
Your clients, venues, sponsors, and partners will all likely have their own protections and insurances in place for events. However their legal back up plans might not cover you if something were to happen. So make sure you consider what you’d do to solve these issues before they even come up.
1. Have a Child Protection Policy
If you aren’t already aware, event planners are responsible for providing safe and appropriate spaces for children at events. That’s in addition to keeping them away from alcohol, providing some form of entertainment, and coordinating search efforts in case anyone goes missing.
Problem: Some teens get ahold of alcohol and are pulled over for drunk driving on their way home from the celebration. When asked how they obtained the alcohol they say it was given to them by someone working your event.
Solution: Always comply with police investigations but, more importantly, make sure you responsibly store and serve alcohol. A child protection policy may cover you in case of any lawsuits however you’ll still need to make sure your employees and bartenders are all well trained, properly certified to serve alcohol, and are given access to a restricted area for bar storage.
2. Set up Hired and Non-Owned Auto Insurance
Whether they drive themselves to the event or not, you may be held responsible for any auto issues that occurs before, during, or just after your event.
Problem: An event attendees falls while climbing out of a charter bus that takes guests from the parking lot to the event center. The driver’s insurance doesn’t cover all of the expenses so they’ve turned to you to make up for the rest.
Solution: When it comes to event planning, you really can’t have too much insurance coverage. Find a policy that fits your needs and, if this does happen to you before you get it, make sure to have your event venue put their vehicle policy in writing ahead of time. They might not cover it for you so it’s always good to check.
3. Prepare for Event Cancellation
You might find yourself in the middle of a messy dispute if you or your client decide not to follow through with an event.
Problem: After planning a wedding the past six months, your client tells you they’ve run out of money and are going to postpone the ceremony for an undetermined amount of time. They also can’t afford to pay you for the work you’ve already done.
Solution: Cancellation terms should always be clearly laid out in your event planning contracts. Cover your bases by making sure to include all your policies for if they, the venue, or even you decide to cancel.
Finally, discover legal requirements for venues conducting an event
Whether it’s a backyard, a convention hall, or a conference room, your venue should be well prepared for any possible legal issues that come up for event specific needs.
1. Get a Liquor License
Most event types include alcohol so you want to make sure your bases are covered if you plan to let your guests imbibe.
Problem: The venue you booked for your client’s wedding reception just informed you that they lost their liquor license. With the big day only a couple months away, there’s no time to switch venues plus your client wouldn’t want to lose out on the deposit.
Solution: Ask the venue to purchase liquor liability insurance if they don’t already have it. If they don’t cooperate, get some of your own. You won’t be able to sell alcohol but you can accommodate open bars. Plus the venue might still even provide you with bartenders or other help, so be sure to work together with them on this issue.
2. Get a Fire Marshal Permit
Your city might require special events permits. If they do, build this process into your event timeline because it could take longer than you think to obtain the fire department’s permission.
Problem: At the last minute you and your client check the weather forecast. The outdoor event is tomorrow and will now be forced to endure a thunderstorm. Neither one of you think cancelling is necessary but you’ll need tents to shield attendees from the rain. The area is very large and exceeds the minimum dimensions that would require you to obtain a fire marshal permit.
Solution: The fire marshal permit process requires paperwork, fees, and a site inspection. Depending on when and where you plan to host your event, it might be wise to go ahead and have this taken care of to accommodate your bad weather back up plans.
3. Get a Health Department Permit
Serving food at your event? The health department would like to have a say in how you do it.
Problem: The county your event will take place in requires a temporary food facility permit which you apply for. But when it comes time for inspection, the venue fails and your application is denied.
Solution: Different counties have different requirements but for the most part you can use a self inspection checklist like this one before they make their visit. Work together with the venue manager to ensure they pass the test with flying colors and your event gets approved.
Overcoming legal issues for events is do-able with plenty of planning
Starting your own event management business requires an understanding of what common problems you might run into while on the job. But with these and other event planning tips, you’ll be well on your way to a successful career in no time.