When planning an event, it’s important to ensure the highest level of protection against any potential losses. In your research for event protection, you may discover a type of insurance policy specific to event cancellations. You may wonder, what is event cancellation insurance? And what does event cancellation insurance cover? These insurance policies are designed to safeguard event organizers from financial losses should an event be canceled or postponed.
Whether your event is a small company gathering or a multi-day convention with thousands of attendees, planning an event involves a lot of time, energy, and money. In this guide, you’ll learn more about what event cancellation insurance covers, how it works, and how you can find the right policy for your event.
Doesn’t Event Insurance Already Cover Cancellations?
When looking for insurance to cover your event, one of the first places you will likely begin is choosing a general event insurance policy. This policy provides coverage for liabilities and risks associated with hosting an event. If you are already choosing an event insurance policy, you may ask: does event insurance cover cancellations? What is event cancellation insurance versus general event insurance?
It’s easy to become confused between general event insurance policies and insurance policies specific to event cancellations.
A general event insurance policy protects you against financial losses associated with hosting the event. For example, this policy could cover issues such as property damage, injuries, or accidents that occur during your event. Many event organizers assume that a general event insurance policy will also protect against financial losses if the event has to be postponed or canceled. However, this is often not the case.
That is why talking to your insurance agent about insurance policies specific to event cancellation is key. These policies can help reimburse costs associated with cancellations, relocations, and postponements. This is a critical differentiation for event organizers. Without the right coverage, any change in scheduling or location could result in financial distress. The good news is that an event cancellation policy can extend your protection.
What Does Event Cancellation Insurance Cover?
When choosing an insurance policy, you probably want to know exactly what event cancellation insurance covers. While it is important to discuss the specifics of the policy you choose with your agent, generally, this type of insurance provides coverage for the following scenarios:
- Venue cancellation: This can include situations where the venue is no longer available due to fire or flooding.
- Natural disasters: Coverage may cover cancellations and rescheduling due to a natural disaster that disrupts the event, such as hurricanes, wildfires, or earthquakes.
- Severe weather: Coverage may recoup cancellation costs if tornadoes, flooding, high winds, or blizzards prevent the event from occurring.
- Vendor or speaker cancellation: If the main event speaker or vendor cancels due to unforeseen circumstances, such as injury, illness, or death, the policy may cover associated costs.
These are just a few examples of what this insurance can cover. The benefit of event cancellation insurance is that it offers an extra safeguard against things that are outside of your control. You can work hard to mitigate potential risks to your event, but you simply cannot prevent some things, such as wildfires, hurricanes, or speaker cancellations. Having the right policy can help you recoup costs.
How Does It Work?
Now that you have an idea of what event cancellation insurance covers, let’s answer the next big question: how does event cancellation insurance work?
First, you’ll choose a policy based on the type of event you are organizing, the event’s location, and the event’s size. From here, your agent will calculate a premium, and you’ll choose the right policy to meet your needs. Then, if a covered scenario takes place and causes your event to be canceled, postponed, or relocated, your policy will be triggered, and you can file a claim.
For example, let’s say you are organizing an outdoor sporting event, and you have a policy specific to event cancellation that covers severe weather outbreaks. On the day of your festival, a tornado sweeps through the area, putting the sporting facility in danger. Clearly, you cannot host the event, and you must issue a cancellation to all attendees. Once this happens, you can file a claim with your insurance company for any prepaid costs that cannot be refunded. Your policy might also cover things such as venue rental fees, vendor fees, and performer costs. The insurance will reimburse you for those costs up to your policy’s coverage limit.
Policies can specify exclusions and certain timeframes within which the event must be canceled, postponed, or relocated. Make sure to discuss the specifics of a policy before deciding what event cancellation coverage is right for your situation.
How Much Does Event Cancellation Insurance Cost?
When organizing an event, you are continually keeping track of how much things cost. From picking a venue within budget to choosing vendors that fit into your price point, you need to know the specifics of costs before you can make a decision. The same is true for insurance policies. Before picking a policy, you’ll want to know: how much does event cancellation insurance cost?
The cost for a policy specific to event cancellation can vary widely. Your policy costs will be determined using the following key factors:
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Event size and complexity:
Insuring a massive outdoor event with dozens of vendors will cost more than insuring a company gathering in a hotel.
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Event location:
The geographic location of an event can affect the price of the policy. Certain areas are prone to natural disasters and severe weather. For example, coverage for a wedding hosted during hurricane season on the coast of Florida could cost more than coverage for a fall wedding in Nebraska.
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Time of year:
Similar to geographic location, the season an event is held can factor into the policy costs. Hurricane season, wildfire season, and winter are higher risk and more costly to insure.
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Industry or event type:
Some event types are considered more high-risk than others. For example, a large music festival will often have a higher premium than an annual corporate conference.
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Public versus private events:
Public events with ticket sales can require a higher level of coverage to recoup the costs associated with sales, while a private event might be covered at a lower rate.
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Coverage limits:
The more comprehensive the event cancellation coverage is, the higher the premium will be. For event organizers, the key is to consider the potential risks to the event and the financial losses that would be incurred. For large-scale events, it can be important to opt for a higher coverage limit to protect against severe financial risks.
These factors can be vastly different depending on the event type. Suppose you are organizing a small wedding for 20 people inside a structure. In that case, the cost of your policy will be entirely different than the cost for a policy covering a three-day music festival in the woods with 100,000 attendees. That is why it is important to get a specific quote for the event you are organizing. Be ready to answer questions about the size, scale, and location of your event.
Get The Protection You Need For Your Event
In this guide, we have answered common questions surrounding event insurance policies. What is event cancellation insurance? What does event cancellation insurance cover? And how much does it cost to protect your event in the case of an unexpected cancellation or rescheduling? When you’re ready to learn more about a policy specific to your event, we are here to help. Contact us at [email protected] or call 877.670.2377 to get started.
