Swine Flu - A "Tail" of the Unexpected

Your event, our risk(tm)

0800 840 2469

We were getting a lot of calls about this - people wanting to know if they can insure against swine flu affecting their event. Now that it turned out to be something of an exaggerated scare, we can reflect on what might have been.

If you bought event insurance from us prior to 30th April 2009 then you probably have a policy which covers this. Most other event insurance providers had wide exclusions relating to infectious diseases, so they never did provide this cover. However, like any known circumstance, you can't buy insurance for something which is an existing potential cause of loss. An analogy might be "you can't insure a house which is already on fire", so for the time being buying cover for infectious diseases is going to be very difficult.

It's one thing being covered, but could you make a claim? Both travel and event insurance can be relevant here. We dealt with a travel insurance claim for a small group which was due to travel to Mexico in mid May 2009. Since the Event Assured Travel wording included cancellation due to "other causes", the loss is covered although the sum recovered was limited. In contrast, some travel insurances would not cover the loss because they are restricted to defined causes affecting the individual traveller rather than any cause affecting the whole event. This vividly illustrates that travel insurance on its own is not the answer to dealing with risk in events; organisers need event insurance too.

But is swine flu a reason to cancel an event? Well, other than for about three weeks in May 2009 in Mexico, probably not, and the reason is clear - the main problem with Swine Flu was fear, and you can't insure fear. The FCO advice against all but essential travel to Mexico was lifted a long time ago. Life and business continues more or less as normal, even in Mexico City, so even there it was difficult to make the case for cancelling events because of Swine Flu. Putting the "pandemic" into perspective, the disease iteslf was generally relatively mild compared with "normal" flu, and the number of cases was much lower than at first feared.

The insurance market continues to review the situation, as it has done in the years since 9/11 in relation to terrorism cover, and we expect the market to change again in the Spring of 2010, so watch this space!

What this episode does demonstrate is that none of us know what is round the next corner, and what might happen next to disrupt events. Perhaps the threat was exaggerated. However, if the virus had mutated, or been more virulent, it could have escalated to the point where governments would restrict the movement of people or how and where they could congregate in order to reduce the spread. It could have been much worse, which is why it is so important to put something in the budget for event insurance, because you just don't know....