A big part of planning an event is anticipating potential problems and addressing them. For some events, this might mean choosing a date for an outdoor gathering that is unlikely to be rainy or sending out save-the-date cards well in advance to avoid scheduling conflicts for guests. However, there are some issues that simply cannot be foreseen that could wreak havoc on the event and undo even the best of planning. Making matters worse, it could threaten non-refundable deposits that have been made to vendors.
Event cancellation insurance can help mitigate these risks by providing reimbursement for the loss of nonrefundable down payments for expenses such as photography, entertainment or catering should an event need to be postponed or canceled due to circumstances beyond the planner’s control. It may also provide protection if a paid vendor suddenly goes out of business prior to the event.
Who Can Obtain Event Cancellation Coverage?
Event cancellation coverage is taken out by the host of the event, such as a sports team that is hosting a game or a trade association that is hosting its annual convention. However, in some cases, sponsors of an event, caterers, vendors selling merchandise at the event and other parties whose income depends on the event occurring may take out a policy.
What Types Of Events Can Get Coverage?
Outlined below are some of the categories of events that cancellation insurance can cover.
Sporting events ranging from golf outings to marathons and bowling tournaments will find event cancellation insurance useful, particularly those that are dependent on favorable weather conditions.
Festivals tend to attract significant crowds, and there is a lot at stake if the event needs to be cancelled due to unforeseen circumstances.
One-day events such as fundraisers, auctions, home tours and casino nights can get peace of mind from event cancellation insurance.
Trade Shows and Conventions
Trade shows and conventions require a lot of planning and the rental of large venues. This means deposits may be significant, and the protection afforded by event cancellation insurance can be invaluable.
Event cancellation insurance can be purchased for many types of entertainment shows, including concerts, comedy shows, talent shows, dance or music recitals, beauty pageants, and musical or theatrical performances.
Weddings can be very expensive, and they also depend on the presence of two guests of honor. Although event cancellation insurance will not provide coverage if the bride or groom backs out of the wedding, it can prove useful in situations where one party becomes very ill or has an unexpected military deployment that prevents them from attending their own wedding.
How Does Event Cancellation Insurance Provide Coverage?
Most special event cancellation policies work by having the policyholder select a maximum amount of overall coverage to act as the limit. This is the highest amount of money the insurer will pay the policyholder when they make a successful claim. This maximum amount depends on the event’s total cost, and there may be a deductible that the policyholder must pay before coverage applies.
There are limitations to when an event holder can obtain event cancellation insurance. It is best to look into a policy as soon as event contracts are filled out in order to get the most favorable rate. In some cases, insurers may not allow event cancellation insurance policies to be taken out more than two years prior to the event. Likewise, many insurers do not allow cancellation insurance to be purchased if the event is less than 15 days away. Premiums for this type of policy are typically due upfront.
In What Cases Does Event Cancellation Insurance Coverage Apply?
Here is a closer look at the specific perils that a typical event cancellation insurance policy will cover.
If an event depends on the appearance of a specific individual or group, whether it is a team, speaker, invited guests or performer, it is advisable to get a non-appearance option that will protect in the event that the individual is unable to attend the event.
Most event cancellation insurance policies will include safety threats, such as cases where local or national authorities report that terrorism poses a real risk of danger should the event proceed.
This insurance will provide coverage when a natural disaster such as an earthquake, flood or fire causes an event to be cancelled or postponed.
Adverse Weather Conditions
Event cancellation insurance will provide coverage for events that are canceled because of severe weather conditions, such as snow storms, tornadoes, hurricanes and heavy rain storms.
Reach Out To The Event Insurance Professionals
MFE Insurance Brokerage has more than four decades of experience writing special event insurance policies, including event cancellation insurance policies. We understand the risks that are involved in holding a special event, so get in touch with us today to learn more about how our policies can give you greater peace of mind.