Article by latest.insure
Event cancellation is a major bugbear of the hospitality sector.
An estimated 21,000 events were cancelled during the pandemic in 2020, and that’s only counting Australian mass participation sporting events. There are also community events, weddings, entertainment shows, conventions, concerts, exhibitions, fashion/art/award events, and more.
However, event organisers, including hospitality businesses, are no longer at the behest of unforeseen disruptions, thanks to coverage available. It’s known as event cancellation insurance.
The Importance of Event Cancellation Insurance
Minimising the risk of your event being interrupted, curtailed, relocated, postponed or abandoned is a tall order. Any of these circumstances could be a disruption:
- Natural disasters, such as those that are weather-related
- Disease outbreak
- Loss of access to public utilities
- Celebrities or performers not showing up because of sickness, death, an accident, or travel delays
- Terrorism (or the threat of it)
- Closed venue or accessibility problems (such as fire or other damage)
- Infectious communicable disease(s) (as agreed when you take out the policy)
- Travel delays
- The failure or non-delivery of equipment.
Event planning costs may be considerable. Think about your investment in sponsorship, corporate hospitality, merchandising, marketing, television, satellite broadcasts, and more. That list doesn’t include reputational damage to your business if an event has had to be cancelled.
Why should your business foot the bill when you’ve done everything to make the event happen?
What Does Event Cancellation Insurance Cover?
An event cancellation policy typically can protect you from the various circumstances listed above. Such a policy can be quite broad, covering you for many reasons beyond your control as the event organiser.
Event cancellation insurance can include cover for:
- Costs and expenses you can’t recover – this can be specified or 100% coverage
- Gross revenue, which protects your business from loss of event profit
- Additional costs you incur in trying to prevent the event’s postponement, interruption, or cancellation
- Public relations expenses to maintain your brand reputation
- Money in transit to a bank
- Expertise ‘on the ground’, including about risk minimisation, to your event staff, and
- Extra costs for not being able to leave a venue on time.
Choosing the Best Event Cancellation Policy
Policies can be secured for coverage of financial losses of between $10,000 and $10,000,000. That’s a wide range, so be sure to first determine for what you need coverage. The event venue, vendors or sponsors may contractually oblige you to take out a particular type of event cancellation coverage. Your local council may also have laws and regulations affecting your coverage and event.
Talk to us to help customise cover for your unique operations. Here’s what we’ll factor in about your business and its events:
- Size and scale
- Event type and nature
- Location and duration
- Budget
- Anticipated event revenue
- The excess that suits you to pay.
You’ll also need robust contingency plans: say if you’re planning an outdoor event, have a backup inside venue in case of inclement weather.
Other Types of Event Insurance
You can narrow your coverage or keep it broad. Here are your options:
Event cancellation insurance, for when you must postpone or cancel an event thanks to unforeseen circumstances (conditions apply). This policy can cover lost revenue, deposits, and non-refundable fees
Liability insurance, such as when a third party is injured or their property damaged during the event. Legal fees, medical and other costs are covered
Property damage insurance to protect against property damage, including the venue, decorations, equipment, and it can also stretch to repairs and replacement
Liquor liability cover where you serve or sell alcohol and there’s a related incident, so it could protect you against the costs of lawsuits
Equipment insurance, for peace of mind if you’re using your equipment for the event and ant coverage for equipment repairs or replacement if it’s stolen, or destroyed during a storm or fire
Weather insurance for losses resulting from adverse weather, which means you lose revenue or have extra costs to reschedule.
If an event is disrupted because of unforeseen circumstances, your business doesn’t have to absorb all out-of-pocket costs. Protect your business with the right-fit event insurance. Let us help you ‘insure’ for the success of your events.
