Event insurance – a prudent option or necessary evil?

26th February 2008

Insurance is a subject that can leave you cold. Rather like doing the VAT returns with your accountant or discussing a legal dispute with your lawyer, you fear that at the end of the conversation your bank account will be a little lighter, and for what purpose? It’s something you know is necessary, but you don’t really want to buy it unless you have to.

Every year there are many examples of events of every size, from church fetes to international congresses, which have been disrupted or cancelled because of things outside the control of those involved. The 9/11 tragedy, foot and mouth, the Madrid and London train bombings, 2007 floods, blizzards in Scotland this winter, disruption at Heathrow airport when that plane crash landed… the list goes on and the losses involved mount up. For some, this means the frustrating loss of a few hours’ work. For others, it can mean losses of hundreds of thousands of pounds, hundreds of man hours and their reputation with third-party exhibitors or suppliers.

Event insurance is one element in the management of risk in events, and a well-written and carefully structured insurance policy can rescue an event, or if the worst happens may even be called upon to refund its entire value.
But before deciding what cover you need, consider the reasons why it is necessary.

Some people buy insurance with a clear reason in mind, only to find that a loss is caused by something completely different. For example, a corporate group travelling to Lapland shortly before Christmas was concerned that extreme arctic weather could cause problems. Bad weather could mean not reaching their destination in time and possibly having to abandon the trip.

Remarkably, the insurance put in place to cover these eventualities was called into use when the return flight was diverted from Jersey to Gatwick, unable to land at the destination airport. An overnight stay and alternative flights were all arranged and paid for courtesy of a policy costing a fraction of the budget.

Don’t forget the property used at the event – anything from a computer for conference registration to an entire exhibition shell scheme is at someone’s risk. Have you considered who pays if the venue burns down or the AV equipment is stolen – it happens? What about equipment you have hired?

Where there are people and property around, there is potential for getting sued if someone gets injured, or the property gets damaged. Defending legal actions can be expensive as well as time consuming, so the right liability insurance needs to be in place, too. Again, you don’t have to be doing something dangerous or unusual – most liability claims arise from people falling over something, falling off something or falling into something (or someone).

Simple event insurance packages can now be purchased online from various specialists, and sometimes at a discount – much like the purchase of car insurance. However, if your event is more complex it pays to talk it through with an expert who can explain the risks and help assess the cover required

So is it a necessary evil? These examples show it is necessary, and the cost isn’t evil, so it’s really a matter of what is your attitude to risk? Did Woody Allen really say: “There are worse things in life than death – have you ever spent and evening with an insurance salesman?” Maybe he said it reassured by a well written insurance policy.

Brian Kirsh is managing director of Event Assured