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.
Understanding Event Cancellation Insurance
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.
The Process of Event Cancellation
When facing a potential cancellation claim, documentation is key. Maintain thorough records of all relevant circumstances leading up to the decision. Once an event is canceled, the burden of proof will fall on the organization to prove to the insurance company that the cancellation was necessary and justified based. Maintaining clear documentation will help with the claim process. Examples can include, but are not limited to:
- Statements from the hotel, host city, or host county confirming the reasons your event was not able to be held in this location.
- Communications from the hotel, host city or host county that indicate 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 your association was unable to move forward with its event, you will also need clear documentation on expenses incurred and revenue lost. This can include:
- A/P and A/R reports
- Registration, sponsor and exhibitor lists
- Data from previous conferences
- Contracts
- Invoices and receipts
Key Takeaways
- If your event needs to be canceled or you are anticipating 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.
Final Thoughts
Association leaders should take care if they choose to cut the expense of event cancellation insurance. Severe weather events due to climate change and evolving threats to the public should not be overlooked. While premium costs may vary based on location and risk factors, a well-documented claim ensures that organizations can weather unexpected cancellations without financial distress. By taking proactive steps, documenting thoroughly, and following best practices for filing claims, organizations can navigate event cancellations smoothly and emerge financially intact.