Questions on Event Insurance
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What is event insurance?
- Event insurance means different things to different people. Some mean "cancellation or disruption", others say "liability insurance". Others simply want to insure equipment at an event.
- In fact, event insurance can cover all of these. Each of the Event Assured product range is designed to cover different areas of the events market - offering cover and extensions which are appropriate to that type of event. However, the cover is entirely flexible so that the insurance can be tailored to the needs of each client and each event..
Can we cover event cancellation due to terrorism?
- Yes. Our underwriters are amongst the world leaders in this. Our policies include a better level of free terrorism cover, and a range of optional extra covers.
Event cancellation - what is free terrorism cover?
- Some event insurers will provide some element of free terrorism cover causing cancellation or abandonment of an event. They do this either by including the risk but then limiting the size of event they cover, or by putting in a sub limit.
- Read policy wordings carefully - some of our competitors don't offer terrorism cover at all.
- Since 9/11 most underwriters offer this cover with time and distance limitations - for example they might offer cover up to £ 100,000 against a terrorist attack occurring within 7 days and 5 miles of the venue. This means that it would only cover an occurrence within those parameters, so if the attack was 8 days out, or more than 5 miles away, you would not be covered.
- Event Assured now give free terrorism cover for events in Europe up to £ 500,000. This operates in respect of an attack at the venue at any time after taking out the insurance, and other than at the venue it applies within 30 days and within 25 miles of the venue. This would mean that if there were a terrorist attack at the venue 8 - 30 days out causing cancellation of the event then an Event Assured policy with free terrorism cover would cover the risk, whilst the competing one would not.
- Underwriters can usually provide cover to include threat (but not fear), and for wider and longer periods, but this will usually involve additional premium.
- Since our underwriters (like most UK insurers) are members of Pool Re ( the government-backed reinsurer of terrorism risks), we can offer clients in England, Scotland and Wales very wide terrorism cover for events in England, Scotland and Wales at very competitive premiums. This has no time or distance limitations, and even includes nuclear, chemical or biological weapons terrorism. However, in accordance with Pool Re rules, it is a condition of this cover that you must insure all of your other business assets with a Pool Re member company, and that such cover includes terrorism. If you are not certain whether you comply with this condition, speak to your fire and other insurers. Terrorism cover is often available a very modest premium, and it can even be worth extending your fire insurance, just to gain the benefit of this cover for your event. There is more detail on this in our Summaries of Cover and product brochures.
Why can we not insure against fear of terrorism?
- Sorry, but no - simply because it is impossible to define and fear means different things to different people, so is an intangible.
Can you insure against lack of attendance, ticket sales or interest?
- No. These are trading risks.
What about reduced attendance due to some problem with transport, or similar?
- Yes, this cover is generally available to events which can show an established pattern of previous gate receipts, against which a loss can be measured.
Can you insure against financial failure of a supplier?
- Not under an event insurance, although we do have specialist markets for this type of risk.
How close to the event can I arrange cover?
- We always encourage event organisers to arrange event insurance early as this gives best value for money. It may not be possible to arrange cover at very short notice, as the premium must be paid before the event takes place.
- It is not usually possible to insure against adverse weather less than 14 days prior to the opening of the event, as long range weather forecasts are available, and if it is known that bad weather is on the way, the risk becomes a known existing one, so cannot be insured.
Can I insure against bad weather?
- Yes.
- If your event is indoors, and not in a temporary structure, then cancellation or disruption due to bad weather is covered as part of our standard cover. For example, if flooding prevents the organiser from getting equipment to an event, and this prevents the event taking place, then that is insured.
- However, if the event is outdoors, or in a temporary structure then cover is generally available, but the risk is underwritten individually, and the premiums are generally higher. The cover and premium will vary according to a number of factors including where the event is and the time of year. Ground conditions and the nature of the event are also relevant. As we explain in our literature, there is a range of covers available, and cover is tailored to each event.
- It is not usually possible to buy cover for adverse weather on an outdoor event less than 14 days prior to the start of the event.
What happens if my event still goes ahead but it is disrupted in a way that causes me to lose revenue or expend more money than I had planned?
- Some event insurers only cover total cancellation of the event. Our event insurance goes much further and also covers postponement, relocation, abandonment or other significant deviation from the pre-planned programme, content or timing. It is always the preferred option to carry on with the event if at all possible and underwriters will, if economic, provide the additional sums necessary to maintain the event as close as possible to the original plan.
How much of the budget should I insure as I don't stand to lose everything even if the event is completely cancelled?
- Whether you choose to insure total revenue or just expenditure, the sum insured should be the total revenue or expenditure for the event.
- When calculating the premium underwriters make allowance for the fact that a "total loss" is unusual. However, if you were to under-insure your event this could have the effect of reducing the amount paid in a claim in proportion to the extent of under-insurance. This is not to be recommended.
I am staging a charity dinner and the revenue that we expect is made up of the cover price and charitable donations on the night. How much can I insure?
- The revenue from ticket sales and sponsorship can be insured because if the event is cancelled these amounts are easily proven. However, sums expected to be raised on the night may be uncertain, and are not always insurable. Charity events therefore usually insure pre-booked revenue only.
- The exception would be an event which has been staged for many years for the same charitable cause, at the same time of year, at the same venue, with the same type of guests. Here you would be able to demonstrate a track record of "on the night fund raising" and underwriters will consider cover for a proportion of this.
Why are there so many restrictions and exclusions?
We have reduced these to a minimum, but there are four basic reasons for exclusions in insurance policies. They are either:
- Risks requiring special underwriting (e.g. non appearance of key feature persons, adverse weather), or
- it would be against public policy to insure them (e.g. deliberate damage smuggling or counterfeiting by the Insured), or
- they are trading risks (e.g. lack of attendance), or
- they are the province of other types of insurance ( e.g. nuclear risks).
Have you ever paid a claim?
- Oh yes, quite a few. Losses range from events being seriously affected by terrorism, weather, travel delays, transport that fails to leave or arrive, strikes, damage to venues, disruption to transport, property damage (including storms or hurricanes) and claims for injury or damage, and much more. The examples we cite in our literature have all happened to some one, at some time.
