News Focus
Are events insured against disease?
Well, that depends on what cover
the organiser has asked for. Event
cancellation insurance can be
purchased to cover an event organiser
or rights holder for their potential loss
of revenue or costs should an event
not proceed as planned for any cause
beyond their control. A short list of
perils excluded are as standard but can
be added back for an additional cost.
These have either been the subject
of previous large losses or need to be
individually understood and rated
depending on the event. One such
excluded peril is ‘Communicable
Disease’.
This exclusion was added as standard
as a reaction to the previous outbreaks
of SARS and Swine Flu. Typically,
immediately following an outbreak,
cover becomes unavailable or costly.
Once the situation has improved
insurers will start offering cover again.
For events in certain territories, such
as China, it can be difficult to get any
cover due to the historical experience.
At the time of writing, insurers have
not yet imposed a general exclusion
for the ‘Wuhan coronavirus’ as they
are waiting to see how the situation
develops. We would however anticipate
that in a relatively short time frame the
additional rate charged for the cover
will rise, and cover may be withdrawn
all together. It is highly unlikely that
this cover will be offered to any event
taking place in China.
Should it become necessary to
prevent a pandemic from developing
or getting worse, other governments
or local authorities may issue similar
restrictions which would cause affected
events to be cancelled. Should WHO
issue any international travel advisory,
as it has in China, it causes widespread
disruption to sport, leisure events and
gatherings (including B2B events).
Providing that the communicable
disease extension has been purchased
without any restriction for SARS or
related diseases, it would be expected
that a cancellation policy would
respond to any loss occurring as a
result of such a cancellation as this
is clearly beyond the control of the
organisers.
Another factor that may affect
events is the fear of travelling caused
by the media coverage. In the face of
such media coverage it is natural that
anyone travelling Internationally to
an event, particularly to an affected
territory may hesitate. This can cause
pressure on event organisers to cancel
and may certainly affect their revenue
depending on their ticket conditions.
Such a cancellation is not covered by
the insurance as it is not considered
‘necessary’ and ‘beyond the control’,
and fear of communicable disease
remains excluded even if the extension
has been purchased.
An event organiser may come
under enormous pressure from their
attendees under such circumstances.
Good communication is absolutely
vital.
Event cancellation should always
be purchased well in advance of the
event to ensure the widest cover
available, and early purchase doesn’t
normally affect the price. This locks in
the cover and ensures that when new
circumstances arise, such as a new
virus, the potential loss is covered.
Where cover has not been purchased
and new circumstances arise it can
become difficult or more expensive to
obtain the cover. EN
Source: Coronavirus – Advice for Event
Organisers by Howden UK Group
March — 15