Brokers! Event Insurance - the Devil is in the Detail!

Your event, our risk(tm)

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As professional brokers, we all know that insurances do differ, and price is not the only factor. Fortunately, price comparison sites have not yet invaded the event insurance market - if they did, they would find it impossible to properly analyse the diverse range on offer, which is where brokers prove their worth.

But how do you compare one specialist provider with another in an area where you may only quote a few times a year? Here are few tips:

  • Check the experience and expertise of the provider you are using, and the underwriters they use - require them to have a thorough understanding of events and insurance.
  • Remind your client of the importance of the right policy wording. There are wordings which fall well short of comprehensive cover. For example, one well known insurer actually excludes riot from their cancellation insurance - so if your client had taken their event insurance for an event in London on the day of the "G8 riots", they would not have been covered
  • Terrorism is excluded by some unless you ask for it to be covered and some won't cover this risk at all. Amazingly, another excludes any orders or restrictions imposed by local authorities, police, fire or ambulance services, so would not cover a situation where the police or fire authority close off the venue because of an incident (such as a serious accident or chemical spillage) in the locality. These risks may seem obscure, but with events it is often the least expected which cause a problems.
  • Some insurers limit cover to cancellation of the whole event, which obviously means there is no cover for an event which is curtailed (for example reduced in size by damage to part of the venue).
  • You will need to advise your client on the extent of financial loss to be insured - are they concerned just to cover their costs, or is there more at risk? A good event insurance 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, to 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 - this will rarely be adequate.
  • If your client's event is revenue-generating, they may also want to consider insuring the profit element, which means basing the insurance on the total revenue expected, not just expenditure. Whilst 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 and your client's reputation for fair play.
  • No insurer will cover speculative risk such as not selling enough tickets. However, if the event has pre-booked revenue and/or has a well established profit history, it is usually possible to arrange cover which also protects your client's 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 too.

We are always pleased to assist brokers in explaining the complexities of event insurance to clients, and how to ensure that they have the right cover for their event. 

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