Background
Hurricane Helene and then Hurricane Milton hit near Clearwater, Florida right before a major convention of one of Association Acumen’s clients. The Executive Director, leaders, and staff closely monitored the approach of the first storm, then the other. After the first storm passed, warnings sounded about a second storm approaching, Hurricane Milton, further interrupting plans and keeping attendees and staff in limbo.
Challenge: Juggling Logistics and Communication
It became increasingly apparent that the meeting would have to be cancelled. But before that decision was made, staff had to keep in close touch with the hotel, review the contract regarding cancellation clauses, monitor local weather alerts and FEMA updates, and alert the insurance provider, all while keeping leaders appraised of the situation.
Logistical concerns also had to be considered, such as printing of programs and signs, shipments of meeting materials, and staff travel plans. Was the airport even open? Should marketing be stopped? Should registration be kept open? When should registrants be told about the possibility that the conference could be cancelled? If it had to be cancelled, what were the alternatives? Was there a virtual option or should the conference be held later in the year? And what would the organization’s liability be like if the conference was called off?
Solution: Understanding Event Cancellation Insurance and the Process Involved
After convening both the board and executive committee, it was determined that it was best to cancel the meeting to protect the health and safety of the attendees. The board was briefed on the insurance coverage available in the event of cancellation and agreed to move forward by submitting an event cancellation claim. Registrants were notified and refund instructions were posted to the website. All hurricane-related communication was stored and documented.
Event cancellation insurance is a crucial safeguard for organizations that host conferences, trade shows, and large-scale events. With the increasing risks posed by extreme weather, public safety threats, and other unforeseen disruptions, securing this insurance ensures financial stability in case of an unexpected cancellation.
Event cancellation insurance is designed to protect your organization against expenses incurred and revenue lost when an event must be canceled due to an insured reason. When applying for coverage, it is important to review policy exclusions and available riders. For example, some policies may not cover specific risks unless an additional rider is purchased. Organizations should also explore alternative risk mitigation strategies, such as securing contracts with force majeure clauses that protect against cancellations due to uncontrollable events.
Documentation was key. The association maintained thorough records of all relevant circumstances leading up to the decision. Once the event was canceled, the burden of proof fell on the organization to prove to the insurance company that the cancellation was necessary and justifiable. Maintaining clear documentation truly helped with the claim process.
Examples we provided included:
- Statements from the hotel, host city, or host county confirming the reasons the event could not be held in this location.
- Communications from the hotel, host city or host county indicating what was happening on location prior to, during, and after the event.
- Transportation or infrastructure reports such as notices of airport closures or flight groundings.
- Reports from federal or state agencies.
In addition to identifying why the association was unable to move forward with its event, clear documentation on expenses incurred and revenue lost was needed. This included:
- A/P and A/R reports
- Registration, sponsor and exhibitor lists
- Data from previous conferences
- Contracts
- Invoices and receipts
Outcome: Key Takeaways
- If an event needs to be canceled or you anticipate a cancellation due to a covered event, contact your insurance provider as soon as possible.
- Document reasons for cancellation and supporting materials
- Ask questions and stay in contact with your host hotel and, if necessary, your host city or county. It is important to stay informed, especially as unexpected situations end up evolving over time.
Association leaders should use caution if they are considering cutting the expense of event cancellation insurance. The association’s well-documented claim ensured that our organization weathered the cancellation without experiencing financial distress. By taking proactive steps, documenting thoroughly, and following best practices for filing claims, other organizations can navigate event cancellations smoothly and emerge financially intact as well.