Spice caught up with Damian Kerin, head of contingency insurance at Beazley Australia to find out more about this tricky business.
Kerin said, “Many people in the events industry think insurance is just about liability and cancellation cover. While we’ve seen growing understanding and use of contingency insurance, there are still lessons to be learned.”
Here are the top five things you need to know to cover your assets:
1. You’re probably underinsured, but not in the way you’d think
In our experience the biggest mistake many event organisers make is only looking at the value of the maximum payout as an indication of how adequate their insurance is. How protected you are will depend on your policy, and may exclude many risks you assume are covered – such as non-appearance by major talent or threat of terrorism. You may want to ask your broker what is and isn’t included to make sure you’re not caught out.
2. Getting it all done at once is not just easier, it could be better value too
There are multiple benefits to getting an annual schedule of events insured. Firstly, because insurers can gauge and consider risks over a portfolio of events, this can reduce the overall risk profile and result in better bang for your buck. Secondly, it provides the convenience of having all insurance requirements sorted and removes the need to source a separate policy every time you hold an event. Finally, an annual schedule means better coverage, as often smaller events are otherwise overlooked.
3. You can tailor just about everything
Contingency is a highly flexible, customisable insurance. Policies can be tailored down to the number of tickets sold, the exact temperature or level of rainfall down to the millimetre. Because these factors have a significant effect on ticket sales and attendance for outdoor events such as sporting events and festivals, most experienced contingency insurers are able to give their clients full control over the type of cover, the trigger level and duration.
4. It’s not just indemnity and cancellation
Contingency insurance isn’t just about cancellations and indemnity; there are a range of exciting contingency covers available to help protect you from prize indemnity, over-redemption or event terrorism. While many of our clients will take out insurance to cover cancellation due to bad weather, weather-based cover can also be used to manage costs of rescheduling and re-ticketing, or stabilise income in the case of lost sales due to unhelpful weather. For example, poor weather at an outdoor festival could be disastrous for crowd numbers, with flow-on effects for suppliers and sponsors. A carefully designed cover could be tailored to provide protection against financial loss and enhance a last-minute wet-weather plan.
5. Insurance can make people happy too
Insurance doesn’t always have to be about worst case scenarios. Contingency insurance can be used as a promotional tool. For example, sporting event organisers or sponsors can use insurance to offer crowds significant prizes at half-time for kicking a goal, using insurance as a smart way to offer million dollars prizes for a fraction of the prize value.