Event Cancellation Insurance and Its Importance in Today’s Risk Environment | Insurance Business America Insurance News Event Cancellation Insurance and Its Importance in Today’s Risk Environment
Increasing risks such as extreme weather and disease make insurance essential for event success
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Written by Kenneth Arauro
The entertainment and live events industry faces constant risks, from inclement weather to the unexpected absence of key performers.
These challenges are driving demand for event cancellation insurance, according to Alan Muhney, commercial line producer at Liberty Company Insurance Brokers. Event cancellation insurance can help reduce significant financial losses if an event is canceled or postponed due to unforeseen circumstances.
Event cancellation insurance is insurance that covers various risks such as abnormal weather, terrorism, and natural disasters. Hurricanes, floods, and even civil unrest can force event organizers to cancel proceedings, often at the last minute.
In recent years, outbreaks of infectious diseases, including the coronavirus disease (COVID-19) pandemic, have highlighted the vulnerability of live events to global crises.
“Without proper insurance, the economic impact of these events can be devastating, with losses ranging from hundreds of thousands of dollars to millions of dollars,” Mauney said. . “This includes not only the direct costs associated with the event, but also the ripple effects on the local economy that impact vendors, service providers, and even the broader community.”
Mr. Muhney highlighted the significant economic cost of event cancellations, especially large-scale event cancellations. The costs associated with major event cancellations can exceed $500,000, including non-refundable deposits, marketing costs, and ticket refunds.
“Consider a scenario in which a major film festival is forced to cancel due to an unexpected earthquake. Without event cancellation insurance, the financial impact could be significant, with losses amounting to 1 million yen. However, with proper compensation, these losses can be mitigated and organizers can recover and plan for future events with confidence,” he said. Ta.
Given the ongoing risks, Mohney suggested that event cancellation insurance is no longer an option for organizers. The COVID-19 pandemic alone has cost billions of dollars due to widespread cancellations, a lesson the industry has not forgotten.
“For event organizers, the lessons learned from the pandemic are clear: Having the right insurance is not only important, but also essential to ensuring the long-term viability of your business,” he said. .
Mauney said each event carries its own risks, so Liberty works closely with customers to identify potential risks and develop coverage plans that address their unique needs.
“Our approach is based on a deep understanding of the complexities and nuances of live events. We work closely with our clients to identify potential risks and provide protection where it is needed most. Develop a comprehensive compensation plan,” he said.
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