Event Insurance: All you need to know
Whilst it doesn’t often rain in Dubai, what would happen if you were hosting a multi-million dollar event and it needed to be cancelled, postponed, curtailed or relocated due to adverse weather conditions? Or your main artist became sick and was unable to perform or a period of National Mourning was declared and your event had to be cancelled? Chances are you would be significantly out of pocket. This is why it’s imperative that as an event organiser or promoter you have event insurance.
Any organisation with a financial interest in successfully running events such as concerts, music festivals, theatre events, business conferences, sports events, trade fairs, product launches, fashion shows, or parties both large and small must take note of the potential risks involved with staging such events. Event insurance can help to mitigate these risks should they occur.
One of the most famous instances of event insurance is Wimbledon’s pandemic and epidemic insurance. Wimbledon had the foresight to buy around £1.5 million per year in pandemic insurance after the SARS outbreak in 2003, paying out £25.5 million in premiums over the 17 years. However, received a payout of 115 million pounds in 2020 when the tournament was cancelled due to covid.
I will touch on the fundamental areas of risk that all event companies and organisers need to take cognisance of to alleviate any possible financial loss to them as event organisers if claims are made against them by their clients.
Event Insurance Requirements
When conducting an event, below are the fundamentals of event insurance. These are all separate lines of event insurance, however, in some instances can be combined into one or more policies. A specialised broker familiar with event insurance such as Beneple will be able to advise you of the requirements that you will need.
- Event Liability
- Property Insurance For Events
- Event Cancellation
- Non-Appearance of Key Person
- Professional Indemnity
Event Liability Insurance
Event liability insurance can help protect you from financial loss if you are held legally responsible for property damage to the venue or bodily injury to someone injured at your event.
Property Insurance For Events
Property Insurance provides cover for loss or damage to furniture, equipment, stands, stock and samples used during the event and can be extended to include whilst in transit to & from the event too. This line of insurance can sometimes be combined with event liability insurance.
Event cancellation insurance will cover the impact on revenue or expenses should an event be cancelled, abandoned, interrupted, postponed, or relocated for reasons beyond their control.
Examples of covered causes of loss include severe weather conditions (hurricanes, tornadoes, winter storms or torrential rain); fires, including forest fires or bushfires; floods; power outages; acts or threats of terrorism; earthquakes; volcanic eruptions; labour strikes or civil commotion.
Policies will also cover mitigation costs reasonably incurred by the insured to prevent the cancellation, abandonment, interruption, postponement, curtailment, or relocation of an event.
Event Cancellation is available for event organisers, promoters, sponsors, promoters, or anyone with a financial interest in the successful running of the event.
Generally, a policy will cover event cancellation, relocation, curtailment or postponement of an event. Generally speaking, you can insure for either (a) expenses incurred or (b) revenue lost however you can’t insure for both so should choose whichever amount is higher.
Whilst many people are focused on liability insurance for events, in many cases, professional indemnity insurance should also be considered. Professional indemnity insurance related to events includes the intellectual capital that goes into planning and staging the event.
The need for professional indemnity insurance for events is highlighted within the below points:
- Development, production, and delivery of projects from proposal to delivery.
- Delivering events on time and within budget
- The setting, communicating, and maintaining timelines and priorities for every project
- Communicating, maintaining, and developing client relationships
- Managing supplier relationships
- Managing operational and administrative functions to ensure specific projects are delivered efficiently
- Providing leadership, motivation, direction, and team support
- Travelling to onsite inspections and project managing events
- Being responsible for all project budgets from start to finish
- Ensuring excellent customer service and quality delivery
Event managers have a duty of care towards their clients, and the below lists of potential risk areas need to be brought into context to understand the potential of a Professional Indemnity claim.
This is outlined in the below-listed duties of event organisers:
- Negligence in providing event advice
- Failure to Design successful communication strategies
- Misplacement of records
- Failure in managing an event
- Providing wrong information to event stakeholders
- Failure to meet deadlines
- Failure to meet budget
- Negligence in providing customer service and quality delivery
Failure in the above duties that results in financial losses to your client could result in a claim.
Non-Appearance of Key Person
When your event relies on an individual or group being the ‘main attraction’ and key to making your event a success, it is crucial to be prepared should they be unable to attend due to unforeseen circumstances. Non-Appearance Insurance protects your event if it depends on a key speaker, artist, performer or group.
Non-Appearance Insurance provides cover if the performer cannot fulfil their obligations, leading to the event being cancelled, abandoned, postponed, interrupted or relocated. Circumstances can include death, accident, severe illness or unavoidable travel delay.
In closing, it is also imperative, and all too often not taken into consideration – Subcontractors play a significant part in the delivery of events. As the client who appoints subcontractors to assist in events, it should also be mandatory that subcontractors who are appointed have the necessary cover in place to protect you, the client, in the instance of a claim being made on work completed by the subcontractors.