The following is a guest contribution from experienced event insurer Graeme Hay. To read the original article in Marsh Advantage Insurance, click here.
Political turmoil, adverse weather conditions and late withdrawals of key personalities can all lead to events being cancelled or postponed, leaving organisers with significant bills.
As event organisers there is much to consider in preparing for an event and making sure that event plans are outlined in detail and executed precisely to ensure its success – on time and within budget.
There are many aspects to juggle from securing the venue and firming up the programme through to consideration of health and safety requirements, conducting client and supplier progress, venue access and travel logistics.
No matter how rigorous your preparation has been for an event, there is always a residual risk that an unforeseen circumstance could lead to it being abandoned, interrupted or postponed.
Consider the range of things that can go wrong:
- Adverse weather conditions.
- Venue closure or accessibility issues.
- Outbreak of disease.
- Loss of public utilities.
- Non-appearance of keynote speakers or performers.
- Terrorism or threat of terrorism.
- Travel delays.
- Non-delivery or failure of equipment.
With items such as television and satellite broadcasts, sponsorship, marketing, corporate hospitality and merchandising costs involved the financial impact can be significant and immediate for both the client and the event organiser. In addition there is also potential damage to the reputations of all parties.
An Event Cancellation insurance policy can provide a tailored solution to suit the individual needs of your clients. While ordinarily any and all of the above scenarios could be covered under such a policy, the coverage is usually far broader and may cover an insured event for a multitude of reasons beyond the control of the event organiser.
There is also a lot of flexibility to enable event owners to protect themselves from loss of:
- Irrecoverable costs and expenses (either 100% thereof or specified expenses).
- Gross revenue, thereby protecting any event profit.
In addition, many policies will pay for extra expenses incurred by the client in order to prevent the cancellation, interruption or postponement of an event. Often the insurer can also provide ‘on-the ground’ support and risk mitigation advice to event management staff as part of the policy.
Whether you are organising a sporting event, community event, awards show, convention, concert or exhibition there are unique risks and challenges. Whatever your clients, or your own, financial interest in an event it’s possible to arrange a policy to protect against their specific loss concerns associated with that event.
Case study: Last day of a food and wine festival cancelled due to bad weather
The final day of food and wine festival was rained out resulting in a significant loss of income for the organiser.
The event was scheduled to run over four days with two ticketed sessions per day. The first three days proceeded without incident. On the last day of the event, severe weather conditions resulted in the event being abandoned due to safety concerns for vendors and patrons.
The event organiser provided refunds to ticketholders for the cancelled session, which led to its net profit earned from the event being significantly less than it would have been had the event proceeded as planned.
However the organiser held an Event Cancellation policy, which was purchased to cover the costs and expenses and the net profit associated with the event, putting the Insured back in the same position that they would have been in had the event not been affected by weather.
For more information regarding Event Cancellation insurance contact:
Graeme Hay, Client Service Consultant,GRH Insurance Services Pty Ltd.