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  Event Organisers  COVID-19 Event Cancellation: Are You Covered?
Event OrganisersFeaturesVenues

COVID-19 Event Cancellation: Are You Covered?

HENHEN—13 April 20200
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H&E North speaks to the insurance experts about managing risk during the coronavirus crisis.
In a recent survey of 2,000 MICE professionals, 69% of events were found to have not been covered by insurance amid cancellations due to the coronavirus outbreak. Only 6% of events were insured against the pandemic, while a quarter of respondents reported they were unsure whether their business was insured. This widespread uncertainty reflects an industry still struggling to comprehend its financial and legal responsibilities amid ever-changing Government social distancing legislation.
Alex Balcombe, partner at Yorkshire-based insurance agency Harris Balcombe, has witnessed events and hospitality businesses who may well be covered, struggle to claim on their policies due to Government inaction: “I firmly believe that the coronavirus pandemic means that the Government needs to do more to assist the insurance market to look after policyholders. We are already seeing huge delays. This is an unprecedented situation and one that requires immediate action.”
The Treasury has responded to challenges faced by the industry and is providing support, however venues, planners and suppliers are asking themselves what they can do to protect their companies now and safeguard themselves for the future. As the effects of the virus have inevitably hit businesses hard, Mark Halstead, partner at business and risk intelligence specialists Red Flag Alert, recommends they run financial health checks on the companies they work with as normal trading returns in a bid to minimise risk.

Mark Halstead, partner at business and risk intelligence specialists Red Flag Alert

“When a level of certainty and economic confidence returns post-coronavirus, companies will be keen to trade. There will be a backlog of postponed events, which people are keen to deliver, and this is where they may become less risk-averse about extending credit terms, as they are eager to generate revenue. However, companies should keep a close eye on the financial health of the businesses they directly trade with and take an interest in any large businesses going into administration. It’s not uncommon for businesses to weather the worst of a crisis, only for cashflow issues to then catch up with them not long after.”
Using creditor services data, Mark believes companies can make informed decisions about how to manage debt risks by opting to request full or part payment upfront or reducing payment days for settling invoices. They can then cease the provision of other goods and services if an invoice isn’t paid on-time and also take more decisive and immediate action in terms of recovering any bad debt.
“For example, a large venue that goes out of business could have repercussions for any companies that rely on its revenue, i.e. catering suppliers, recruitment businesses providing temporary staffing or facilities management companies. If a business trades with these companies, they may want to start contingency planning to find other suppliers to avoid any impact on their own supply chain.”
Mark also warns of the need for events businesses to remain wary of inflated supply chain costs as a consequence: “Struggling businesses affected by non-payments from organisations which have gone into administration may attempt different quick fixes to address cashflow issues, including hiking prices. If companies have already broadened their supply chains, they’ll have more choice to avoid paying over the odds.”
Between the corporates, agencies, hotels, venues, destinations and suppliers included in the recent insurance survey, corporates were revealed to have the highest levels of policy cover, with 11.6% reporting they were protected from event cancellations, with destinations following behind at 8.7%. Industry suppliers were shown to have the worst levels of cover, with 78.5% declaring they were not covered for cancellations, followed by 74.7% of agencies.

Toby Heelis, CEO of venue finding platform Eventopedia

Toby Heelis, CEO of venue finding platform Eventopedia, has witnessed the challenges faced by event planners in acquiring the right cover to safeguard themselves against such foreseen circumstances: “While some planners believe that if their event is cancelled that the venue will cover any additional costs incurred, this is not always true, so planners must be prepared with the correct policy to protect their business.”
“There are a number of types of event insurance available, including public liability and employer’s liability, adverse weather protection and cancellation, abandonment or postponement protection. Most consider public liability insurance to be the most important cover for event organisers – designed to cover planners if a third-party suffers accidental injury or property damage because of the event – but in a case such as this, where a pandemic is impacting the event, organisers need to look carefully at which cancellation policy they have signed up with.”
According to insurance regulators, it is unlikely a standard insurance policy will cover loss of income or revenue as a result of cancellations due to coronavirus. However, policies may have a clause which extends cover to apply to instances of ‘notifiable or communicable disease’. On 5th March, the government took urgent steps to list coronavirus as a notifiable disease in law, meaning any loss of revenue should be covered when planners with the appropriate policy make a claim.
“When signing up for event insurance, it is crucial that organisers read each policy document thoroughly to understand what exactly the insurance includes and most importantly, what it excludes,” continues Toby. “Event cancellation policies can be complex and confusing, with multiple clauses that may leave planners convinced they are covered when they are in fact not. The current pandemic has left many without cover for their event because the clauses in their insurance do not cover this type of cancellation.”
“Some event organisers have tried to purchase insurance after the spread, however it is increasingly difficult for companies to add cover to their existing policies or sign up for new cover. Trying to insure against such an occurrence for all future events could also be tricky given ‘epidemics’ are typically excluded.”
As the current climate has demonstrated, the delicacy of planning events and the absolute need for insurance in the case of emergencies cannot be understated. As the industry begins to bounce back and diaries once again start to fill, Mark agrees that event insurance should be at the top of every event professional’s list: “We recommend planners ensure they sort their event insurance before they begin anything else and carefully assess any policies they find to ensure they cover as many areas as possible. If you are in doubt about a policy, always ring up the insurer and ask them to clarify the details to ensure you are aware of what type of events you will be covered for.”

CoronavirusCOVID-19Event InsuranceEventopediaExpert opinionHarris BalcombeLockdownRed Flag Alert
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