Whether you are hosting a wedding, sporting event, music concert, community event, or some other special event, it is important to protect yourself financially from the risk of cancellation. Special event cancellation insurance acts as a protection against loss of revenue or unexpected expenses that may arise if your event is canceled or postponed due to circumstances beyond your control, such as a death or adverse weather. Special event cancellation insurance provides businesses with coverage to help minimize losses.
You have rented out a venue, secured hotel rooms, leased equipment, and signed contracts. The evening of your event, a major snowstorm strikes, forcing you to cancel the show. Without the right protections, you could be on the hook for any lost revenue and various other expenses relating to the cancellation. However, with special event cancellation insurance, you would be covered for these losses, which could help your business recoup lost profits and expenses.
When referring to valid reasons for cancellation, it is important to understand that cancellation insurance only covers perils that are beyond the control of the event planner. These circumstances include inclement weather, an outbreak of disease, a primary speaker dropping out, or similar incidents. Special event cancellation insurance will not cover poor planning. Your cancellation insurance policy would not cover lost revenue from an event that you cancelled due to your company going bankrupt or having a poor marketing strategy that resulted in a too-low attendance.
What Does Special Event Cancellation Insurance Cover?
Having cancellation insurance can be invaluable when you are in a situation that forces you to cancel or postpone your special event. Special event cancellation insurance can reimburse you for the loss of various non-refundable down payments for services like catering, photography, entertainment, and flowers. You may even be protected if a vendor goes out of business before your scheduled event. Some of the most common expenses that special event cancellation insurance covers include the following:
- Event photography – Special event cancellation insurance may cover payments made to a professional photographer that does not show up to your event, or losses or damages your photos before you receive the finished product.
- Special event attire – If your special event requires costumes or if you are hosting a special event like a wedding and your dress is ruined while getting it altered or pressed, your coverage may help repair or replace the outfit.
- Special event jewelry – Just like your special event clothing, your jewelry may also become damaged or lost. If your event-related jewelry, such as a wedding ring, becomes damaged or lost during the event, it may be protected under your cancellation policy.
- Special gifts – Gifts purchased for your special event may also be covered under your cancellation insurance policy. This includes monetary gifts which are typically covered up to a certain amount.
- Loss due to military deployment – If you are forced to cancel or postpone your special event due to the deployment of yourself or an immediate family member, cancellation insurance may cover any loss expenses.
- Damage to leased/rented venues – Most venues require you to schedule your event months ahead of time. However, if damage occurs to the leased or rented venue, you could be stuck without a place to hold your event, requiring you to cancel.
- Compensation for guest speakers – Even if you cancel your special event, your guest speakers or VIPs will still require payment. Fortunately, special event cancellation insurance will usually cover these expenses.
Importance of Having a Special Event Cancellation Policy
Even the best-planned special event can run into problems. A comprehensive cancellation plan ensures that you have protection from unforeseen situations that could arise and that require cancellation of the function. These situations include delays, bad weather, and similar incidents. When shopping for special event cancellation insurance, it is important to realize that these policies are often non-standard. That means that the terms and conditions can vary from policy to policy. Be sure to carefully compare and read through each policy to see which best meets your needs. Also, check to see which exclusions are listed in each policy as these can limit your coverage.
Where to Get Event Cancellation Insurance Coverage
So, who needs special event cancellation insurance? As a general rule of thumb, anyone who is an event coordinator and responsible for special events (concerts, film shoots, sporting or entertainment events, trade shows, or conventions) can benefit from having a special event cancellation insurance policy. The cost of a policy is generally calculated based on the gross revenue or expected expenses, meaning premiums can vary widely. To learn more about event cancellation insurance or to acquire coverage, contact MFE Insurance.