The venue has been booked, the delegate list is full, the catering has been chosen, the AV equipment is in place…everything is planned and ready to go for a successful event. But disaster strikes – bad weather, transport strikes, a volcanic ash cloud. All circumstances that are unforeseen and out of your control, but regardless, these are all circumstances that can cause a huge financial loss if the event is not insured.
“Whether it’s a global convention or a meeting of the local model railway club, there is money at stake,” says MD of Event Assured, Brian Kirsch. “For those responsible for managing corporate event budgets, their jobs might be at risk if the correct action is not taken. If the event aims to make a profit then the whole business could be at risk. Yet many people think that event insurance is an unnecessary expense, or just not relevant.”
Martin Linfield, Head of Event Insurance at Hiscox says event insurance provides organisers with a level of financial security that protects them against costs arising from the unexpected postponement or cancellation of an event. “It also gives invaluable peace of mind; what may seem like a good, safe event location now may not be in the future – we’ve seen this during the storms last month, where venues have been flooded and forced to close,” he adds.
An extra expense?
While it is difficult to give a ‘typical price’ for event insurance, as many different factors affect the cost, Michael Price, Contingency Underwriter at Beazley Group, says the cost is more competitive than many realise. “To insure a £100,000 conference the cost could be as little as £250,” he says.
It is important to note, however, that the cost will be influenced by factors including the type of event, the time of year it is being held and the location, as well as the level of cover being purchased.
The benefits of knowing your event is insured, however, surely outweigh the extra monetary outlay. “Insurance is certainly not expensive when compared with the cost of losing your business if there is no insurance in place,” says Kirsch. “I’ve witnessed a specialist organiser of country fairs who had three out of 10 events flooded in 2012; without insurance he would have gone out of business.”
Prepare for the unexpected
Beazley Group has paid out hundreds of claims over the years when unplanned circumstances have impacted an event, from adverse weather and strikes to earthquakes and the occasional rock star falling out of a tree.
Price says the cancellation of the Get into Reading National Conference and Readers Day is typical of many conferences held in the UK. “200 attendees paying between £65 and £100 mean that the organiser undertakes a significant financial commitment when putting on the event. Adverse weather conditions led to it being cancelled the day before it was due to start; all advance ticket holders were offered a full refund or the option to transfer to a rescheduled date later in the year.”
While there may be some cases where event insurance is not of major importance, a small company AGM for example, taking out event insurance is ultimately down to the individual client taking a call on what they consider to be a high risk factor and whether they need to insure against it.
“For a small event that fails, the worst that can really happen is reputational damage,’ says Director at Leopold Marketing, Leo Platt. “There is no blanket approach to insurance; it’s dependent on the type of event and the risk factors.”
Platt says he was once approached about a Segway Safari around London, an event he turned down straight away. “I couldn’t put my name to that; it was doomed for someone to have an accident. In these cases you need to look at your own internal processes and where the risks lie, then make a decision regarding taking the event on in the first place, and whether to take out event insurance,” he says.
Hiscox’s Linfield says first and foremost, organisers should buy a cancellation policy as soon as the first expenses are incurred, which would normally be the venue deposit. “It is never too early to buy insurance,” he adds.
At Arc International cover can be provided up to three years in advance of the event. “Organisers must bear in mind the importance of insuring as soon as exposure commences, before the emergence of a pre-existing circumstance which can then become an excluded peril or extra cost. Insuring early does not cost any more, but it could prove costly to delay putting cover in place,” says MD Terry Waller.
In Price’s view, insurance is a must for all events. “Why expose yourself to a potential hit even if the balance sheet is strong? Event insurance is a cost effective mechanism for mitigating risk. In my view, a good event organiser will have at the very least considered event cancellation insurance as part of their due diligence process when organising their event.”
This was first published in the February issue of CN. Any comments? Email firstname.lastname@example.org