The success of an event depends on insurance due to growing risks like severe weather and disease.
Risks in the entertainment and live events sector are ever-present, ranging from inclement weather to the unplanned absence of important performers.
According to Alan Mauney, business lines producer at Liberty Company Insurance Brokers, these difficulties have increased demand for event cancellation insurance, which can lessen large financial losses when events are cancelled or postponed because of unanticipated situations.
Extreme weather, terrorism, and natural disasters are just a few of the hazards that are covered by event cancellation insurance. Events may have to be cancelled, frequently at the last minute, due to natural disasters like hurricanes, floods, or even civil upheaval.
In recent years, communicable disease outbreaks, including the COVID-19 pandemic, have also highlighted the vulnerability of live events to global crises.
“The financial consequences of these incidents can be disastrous without adequate insurance coverage, resulting in losses that can range from hundreds of thousands to millions of dollars,” Mauney stated. “This covers not just the event’s direct expenses but also the knock-on effects on the local economy, which impact service providers, vendors, and even the larger community.”
Mauney underlined that event cancellations have a substantial financial impact, especially for major events. A major event cancellation can cost more than $500,000 in non-refundable deposits, marketing costs, and ticket refunds.
“Consider a scenario where a major film festival is forced to cancel due to an unexpected earthquake. Without event cancellation insurance, the financial impact could be crippling, with losses potentially exceeding $1 million. However, with the right coverage in place, these losses can be mitigated, ensuring that the organizers are able to recover and plan for future events with confidence,” he said.
Mauney proposed making event cancellation insurance mandatory for organisers due to the persistent hazards. The industry has learnt from the billions of dollars lost as a result of massive cancellations during the COVID-19 epidemic alone.
The lessons from the epidemic are evident for event planners, he said: “Having the proper insurance coverage is not just important – it’s vital to ensure the long-term viability of your business.”
Every event has unique risks, according to Mauney, which is why Liberty works closely with customers to identify potential exposures and develop coverage policies that meet their individual requirements.
“A thorough awareness of the subtleties and complexity of live events forms the foundation of our strategy. We collaborate closely with our clients to pinpoint any hazards and create all-inclusive coverage solutions that provide security where it’s most required,” he stated.
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