The Cost of Being Uninsured
Global View
By Terry Waller
Foot and mouth, terrorism, petrol crises, H1N1 and avian flu have all adversely affected the event industry. Now, the insurance market is dealing with air flight restriction claims resulting from volcanic ash. As frustrating as this is for event organizers whose speakers, artists, delegates or exhibitors were prevented from reaching their destinations, it is surely a comfort to those who can receive compensation from the right type of insurance protection.
Under a cancellation policy, it is not possible to insure a building when it is burning—or any other pre-existing circumstance. The recent spate of claims due to volcanic ash are from organizers who had the foresight to insure prior to the eruption. As is often the case when disaster strikes, coverage is requested “after the horse has bolted,” when it is too late.
Some planners assume (incorrectly) that coverage is only available if an event has been canceled. But often claims are paid-for costs incurred so that an event can be kept alive and proceed. This clause is highlighted by the recent Icelandic ash situation, when it has been necessary for underwriters to pay additional travel costs for artists or speakers to be rerouted via alternative modes of transport.
The main message here is that coverage should be purchased as soon as the venue contract is signed and the client’s exposure begins. Taking action to insure early does not cost any more, but it can prove expensive not to do it. As an event insurance specialist, I'm often seen as the bringer of bad news, but I would also be (justifiably) criticized if I did not emphasize the importance of insuring early.
Keep in mind that sometimes underwriters will agree to “write back” a circumstance that is deemed pre-existing. The Icelandic volcano incident is an example whereby quotes can be obtained to include a risk, but be subject to an additional premium. One+
TERRY WALLER is managing director for
Arc International, an event insurance firm.