In this era of on-line quotes and price comparison websites, it is easy
to assume that one insurance is much the same as another, so the only
difference is the price. Price comparison sites have not yet invaded
the event insurance market, although if they did they would find it
impossible to properly analyse the diverse range on offer.
Event insurance is a complex product, and every event is different, so
it is vital to ensure that you not only get a good price, but also that
you are getting the right cover. There are a few simple rules for
The first is ‘Are you dealing with an experienced specialist insurer or
broker?’ In recent years, there has been something of an explosion of
offers from new entrants, not all of whom are wholly committed to the
events market. So, check their experience and the underwriters they
use; require them to have a thorough understanding of events and
insurance. Check their qualifications, too. Just because someone says
they are an expert, doesn’t mean they are.
Secondly, if you get alternative quotations, read them carefully. Don’t
assume that anything is covered unless the policy actually says so.
There are insurance products on the market which fall well short of
comprehensive cover. For example, one well known insurer actually
excludes ‘riot’ from their cancellation insurance, so if you were to
take their event insurance for an event in London on the day of a
political demonstration which turned into a riot, you would not be
Terrorism is frequently excluded unless you ask for it to be covered
and some insurers won’t cover this risk at all. Amazingly, another
excludes any orders or restrictions imposed by local authorities like
the police, fire or ambulance services. They would not cover a
situation where the police or fire authorities close off a venue
because of an incident, such as a serious accident or chemical
spillage, in the locality. These risks may seem obscure, but the whole
point of event insurance is to cover the unexpected, and it is often
the least expected which can cause a problem.
Also, beware of insurance which limits cover to cancellation of the
whole event, because this means there is no cover for an event which is
curtailed (for example reduced in size by damage to part of the venue)
or abandoned half way through. Under an insurance with this limitation,
there is effectively no cover once the event has opened.
Next, decide what financial loss you want to cover. Are you concerned
just to cover your costs, or is there more at risk? A good event
insurer will also cover other additional costs which can arise. These
range from the cost of advising delegates and attendees that the event
is off or moved, to penalties for failing to vacate the venue on time
or costs incurred in overcoming a problem so that the event can go
ahead, possibly at another time or place.
Look for cover for costs incurred in protecting the reputation of the
event for next time and for the costs incurred in making a claim.
Beware of insurance which limits additional costs to a sub limit or
restricts this to venue costs only, as this will rarely be adequate.
If your event is revenue generating, you may also want to consider
insuring the profit element, which means basing the insurance on the
total revenue expected, not just expenditure. While this means a higher
sum insured (and hence a higher premium), it does mean the insurance
will cover refunds to delegates/ticket holders, sponsorship and so on.
This can be important in maintaining customer or exhibitor loyalty, or
even just your organisation’s reputation for fair play. It also means
that you will receive your expected return on investment even if the
event is seriously disrupted.
So how does this work? No insurer will cover speculative risk, so don’t
expect them to cover risks like not selling enough tickets. However, if
your event has pre-booked revenue and/or has a well established profit
history, you should be able to purchase cover which also protects your
anticipated profit. This can get a little tricky if part of the revenue
is made ‘on the night’, for example charity events frequently include
raffles or auctions. Provided there is a track record, it is usually
possible to even include
a percentage of the revenue expected from these activities.
To achieve this, the insurer will need confidence in your record
keeping. Make sure you retain the accounts
and other records from previous events because you may need these when
making a claim. Making successful claims is, after all, what insurance
is all about.
Brian Kirsch BA FCII is MD of Event Assured and chairman of Eventia’s regulation committee.