Event Cancellation Insurance - Protecting Your Big Event

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The big event was the COMDEX convention held at the Georgia World Congress Center in Atlanta. COMDEX was the annual global IT convention, featuring the newest computers, electronics and gadgets. This was the biggest convention held in Atlanta each year. 200,000 people would attend the convention over four days.

Two days ahead of the convention opened, a type 3 tornado struck downtown Atlanta cancelled TV shows. The twister tore off 100,000 square feet of roof from the Convention Center and dumped countless tens and thousands of gallons of rainwater inside. Local news footage showed water cascading down a large stairway such as a waterfall.

COMDEX was cancelled. The financial losses for the event planners fairly boggle the mind.*

Imagine if the show can't continue? The effects - particularly for a corporation staking big bucks on an advertising event and for an association that gains most of its revenue from an annual conference - could be dire. One safety net is event cancellation insurance, which could protect your event investment against catastrophes, strikes, earthquakes and snowstorms.

Event Cancellation Insurance has been around for many years, and includes a long history of protecting special events from conventions, to trade shows, to exhibitions, entertainment or sporting events.

An insured may have incurred expenses all year long preparing for an event but can't afford for an unpredictable event to cause its cancellation. Consider the expense for travel, venue deposits, rescheduling costs, as well as other costs including planning.

Usually the kinds of problems that could cause postponement, cancellation or relocation of an event are out of the planner's control. Check out Event Cancellation Insurance for the kind of coverage needed to protect that financial exposure.

Whether planners should purchase cancellation insurance depends upon how important an event is to an association or corporation financially and what type of risk it is assuming. If your group event is planned for 50 people, you'd probably not buy this policy. But when 500 or 5,000 everyone was expected to go to, event cancellation insurance could be vital to your bottom line.

Sometimes, event planners don't think of event cancellation insurance. They either are unaware that such coverage exists, or mistakenly depend on the insurance of the event venue...like a conference hall. The venue's insurance will help them rebuild or repair. But it won't help the event planners find another venue, or compensate them for the expense they incur or income they lose from cancellation.

Coverage and Cost

The principle is that cancellation insurance covers perils which are beyond the control of a planner, such as inclement weather, strikes, outbreaks of disease and so on. You may also purchase coverage for "Non-Appearance," in the event your event relies on the look of a person or group (speaker, performers, player, invited guest). The policy also covers things such as extra expenses for trucks and workers in the event an exhibitor doesn't break down his exhibits. What's not covered are insufficient planning, low attendance from deficiencies in interest or poor marketing, or bankruptcy of the planner.

Coverage begins as soon as the premium is paid and usually extends for five days following the event. Coverage purchased well before an event could be a godsend if something happens to the facility where you're booked, because the coverage would cover costs of relocation and notifying attendees.

The price of this coverage is calculated on a policy-by-policy basis. Every event is significantly diffent and each has unique risk exposures. The typical costs with this coverage run about fifty cents per $100 of coverage. However, variables like location (areas prone to hurricane or earthquake) or season (winter is greater than spring, summer or fall) can push the purchase price up towards $1 per $100 of coverage. So, a $1 million policy might cost around $10,000 or more.

When To Buy

Event cancellation insurance is generally less costly if purchased far in advance. Insurers increase the premium rate, theorizing that the closer the event is, the more desperate the planner should be for coverage.

We recommend that you get at the very least two price quotes before building a buying decision. We also recommend that you review an example copy of any policy before purchase to find out what is covered and what is excluded.

Then, have an excellent successful event!

*This catastrophe was entirely fictitious.

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