Event Cancellation Insurance

The Importance of Event Cancellation Insurance

Events get canceled from time to time, which is why whether an event is large or small, it requires a detailed level of planning to include event cancellation insurance. Even the most detailed level of events planning faces a considerable threat from the uncontrollable forces of man and nature. Event cancellation insurance allows for protection from unforeseen losses allowing one to shield themselves from embarrassment. It is thus essential to understand the nature of these forces in order to determine to what extend one should shield themselves.

Cancellation of an event can arise from postponement, interruption and in cases where the entertainer fails to show up at all. The causes for these types of occurrences can vary and each of these need to be appropriately detailed to ensure that they are included in the cover of the policy.

Cancellation and interruption may result from a variety of causes, including natural calamities, power failures, and damage to the rented venue among others. Various insurance companies provide a complete list of some of these events, hence it is vital to go through such details and determine whether they fit into context.

Event cancellation insurance offers protection from financial loss that occurs from out of pocket expenses which may be incurred as a result of cancellation, interruption, and postponement. Other expenses that the organizer is obligated to pay as a result of the cancellation are also covered allowing them to re-position themselves and start the event all over again. Loss of perceived profits and revenues are also covered provided the insured can sufficiently quantify the amount they would have received had the cancellation not occurred.

Event cancellation insurance protects financial investment in the event that the event has to be stopped halfway. An appropriate portion of the investment can be reimbursed to the organizer to facilitate the re-advertisement and postponement to another date. Dramatically reduced attendance can also significantly impact the outcome of the event.

These are forces that may be external to the organizer and cannot in any way be anticipated for during the planning of the event. A good number of visitors to the event may be unable to attend as a result of weather or more significantly, the threat of terrorism activities in the area. Event cancellation insurance thus provides cover for any financial loss that is incurred as a result of reduced ticket sales at the door or from an implied pre-paid guest list.

However, it should be noted that event cancellation insurance may not cover low ticket sales if the cause is not covered. Lack of advertising and general viewer apathy to the even cannot be covered under such policies. If an organizer does not take the time to adequately advertise their even resulting in low ticket sales on a fine day then the insurance policy will not cover such losses.

Significant causes of event cancellation have to occur for it to be fully established that there would have been high ticket sales had there not been the occurrence of a certain event. The dynamic nature of event cancellation has made most insurers offer high premiums for such cover. It is thus important that priority areas are identified keenly in the design of an insurance cover to maintain a cost effective approach.

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