Certified Meeting Professional (CMP) Practice Exam

What overlooked budget items should be included for comprehensive planning?

1. Employee salaries and benefits

2. Event insurance and gratuities

3. Marketing and sponsorship revenues

4. Advertising and travel expenses

The correct answer is: Event insurance and gratuities

Including event insurance and gratuities in your budget planning is vital for comprehensive event management. Event insurance protects against potential liability claims and financial losses due to unforeseen circumstances, such as cancellations, property damage, or injuries. This type of insurance is often overlooked during budgeting, yet it can save organizations from significant financial burdens that may arise if a problem occurs. Gratuities, on the other hand, reflect the appreciation for services rendered by various vendors, such as catering staff, security personnel, or event facilitators. Not accounting for these expenses could lead to strained relationships with service providers, impacting the quality of service and the overall success of the event. Understanding the importance of these budget items ensures that all aspects of the event are well-planned, which is crucial for both effective risk management and maintaining good vendor relationships.