Planning an event requires a significant investment of time and money, and the prospect of losing everything if the event cannot be held can be daunting. Event cancellation insurance offers event organizers valuable protection should their event need to be unexpectedly canceled for certain reasons beyond their control. Here is a closer look at how this type of insurance works and what procedures must be followed to make a claim.
What Is Event Cancellation Insurance?
Event cancellation insurance offers protection to organizers should a special event that they have planned be cancelled or postponed because of unforeseen circumstances. For example, if a weather emergency occurs, a family member passes away, or a vendor or officiant is unable to provide services for which they were hired, this type of policy can provide coverage.
How Does Event Cancellation Insurance Coverage Work?
With event cancellation policies, the event organizer is typically asked to select a limit for the insurance, which is the maximum amount of money the company offering the policy will reimburse them should a claim be made. This amount typically depends on the event’s total cost, and there may be a deductible to pay before reimbursement kicks in.
Organizers are advised to consider the combined costs of the venue, vendors and other details of their event when determining the limit. A reputable insurance broker can point them in the right direction and ensure they purchase a policy that provides the right level of coverage to protect them if a cancellation becomes necessary.
What Constitutes An Event Cancellation For Insurance Claim Purposes?
Although the definition of cancellation varies depending on the policy, it typically means that the insured party is unable to host the event, whether it is because of a physical inability, such as a fire at the venue, or a regulatory inability such as an ordinance restricting access to the facilities.
Does Timing Matter For Event Cancellation Insurance Claims?
If possible, people with event cancellation insurance should check with their insurance broker to make sure that the policy will be triggered before they officially cancel the event. However, this may not always be possible, such as in the case of a covered peril that occurs close to the date of the event.
How Are Event Cancellation Insurance Claims Submitted?
When it is time to make an event cancellation insurance claim, get in touch with the insurance broker who supplied the policy. They will typically provide a form that must be completed and returned, and one of their claims representatives will be in contact to request further documentation and resolve any questions. Most states require insurance carriers to respond within 30 days of the claim.
What Happens If The Event Is Postponed Rather Than Cancelled?
A postponement occurs when the event is cancelled but then rescheduled and held at a later date. The insurance carrier is generally required to pay the net revenue of the original event under the policy, but the proceeds of the postponed event can reduce the insurer’s overall loss. For this reason, a final claims settlement is not usually made until the postponed and rescheduled event has been concluded.
What Causes Of Loss Can Event Cancellation Insurance Cover?
Outlined below are some of the triggers that could activate an event cancellation insurance policy.
- A labor dispute or strike risk
- Power failure
- The nonappearance of key performers or personnel as a result of illness, injury or death
- An inability to erect needed facilities at the venue
- Damage to leased or rented venues
- Infrastructure damages that render the venue inaccessible
- A natural catastrophe such as a flood or earthquake
- Weather-related perils, such as heavy wind, snow or rain
- The spread of communicable diseases, although COVID-19 is currently excluded
What Type Of Events Are Covered By Event Cancellation Insurance?
There is a broad range of events that can benefit from this type of insurance. Some examples include:
- Theatrical productions
- Product launches
- Major sporting events
- Fashion shows
- Charity functions
- Award ceremonies
- Community events
- Conferences and conventions
- Trade shows
- Company parties
- Sporting events
What Types Of Expenses Are Covered By An Event Cancellation Insurance Claim?
As long as the source of the event’s cancellation or postponement is covered by the policy, this type of insurance will typically offer reimbursement for expenses such as:
- Non-refundable down payments that have been made on the venue, entertainment provider, photographer, other vendors, or travel plans for the event
- Gifts that were purchased to be distributed at the event
- Special attire that has already been purchased or rented for the event
- Counseling that may be needed because of undue stress stemming from the event’s cancellation and postponement
Reach Out To The Special Event Insurance Brokerage
Ensure your upcoming special event has the proper protection in place by getting in touch with MFE Insurance Brokerage. With more than four decades of experience insuring special events, our team can provide the coverage you need to protect your investment.