Coronavirus and cancelled events: What does your insurance cover and what should you consider in the future? Kris Barnfather, senior account executive at Eggar Forrester Creative, talks… 

The world is currently in the grip of a global pandemic, with vast numbers of businesses hugely impacted by the effects of this deadly virus. Of course, the human tragedy of this pandemic has been devastating, but it’s also been catastrophic in financial terms – particularly for events businesses.

The outbreak has hit the events industry hard, with many large-scale events postponed or cancelled entirely. Sports tournaments, film premieres, festivals, gigs and even the Olympics have been put on hold – and the costs of these cancellations are mounting. With no end to social distancing in sight, many businesses are facing difficult decisions on what to do next.

Are insurers covering event cancellations due to COVID-19?

Global pandemics are not usually covered by insurance policies. And a pandemic on this scale is unprecedented in modern times, which is why so many companies have found themselves without insurance to protect them from the financial impact of event cancellations.

The scale of this outbreak, and the speed at which it spread across the world, has necessitated the cancellation of all kinds of events. Headline-grabbing cancellations have included Coachella, Glastonbury, Wimbledon and the Eurovision Song Contest, with huge occasions like the Cannes Film Festival and the 74th Annual Tony Awards also being postponed for a significant period of time.

The number of events that have now been cancelled, and the potential cost of these cancellations, mean that it is highly unlikely that insurers will be in a position to provide coverage for companies looking to protect themselves from the ongoing threat of COVID-19, or the dangers posed by a novel virus in the future. And even if such coverage were possible, premiums could prove prohibitively expensive.

What is being done to protect events businesses from communicable disease risks?

Communicable disease cover has been in place long before this outbreak. However, this cover is normally offered as an optional extension to a policy. If a business purchased the communicable disease extension under the cancellation section of their event insurance policy then it’s good news, because any event cancellation due to COVID-19 will be covered. Unfortunately, going forward, insurers will most likely look to exclude COVID from the communicable disease extensions offered in the future.

When social distancing measures are relaxed, lockdowns are eased and it becomes safe for events to recommence, organisers will need to think very carefully about their cancellation coverage, looking into their communicable disease triggers in far greater detail than ever before.

It’s well worth enlisting the help of a specialist event insurance broker, when the time comes to investigate cancellation policies for future events. Professional brokers will be best placed to provide the expertise and knowledge required to help organisers navigate the range of policies available. Their advice could prove invaluable in helping to determine the most cost-effective and comprehensive options.

How can events businesses prepare for the future?

It is unlikely that the threat of coronavirus will be covered by insurance policies any time soon. However, it’s still a good idea to discuss your coverage requirements with your chosen event insurance broker, to find out what you can do to protect your business from any cancellations or postponements that are outside of your control.

Never before have we seen such a huge number of events cancelled, in such a short space of time. Sadly, the COVID-19 outbreak has made the dangers posed by contagious diseases clear to us all. But as the battle against coronavirus rages on, event organisers are beginning to look ahead, and starting to consider the measures that they might be able to put in place should we ever face a situation like this again.

The chances of the coronavirus being covered by insurers remain low, but the market is changing all the time. So, seek the advice of an experienced events insurance broker and investigate all the potential options for your company. You might be surprised by what you find.