Eileen Hoffman, assistant vice president at Aon Affinity, explains why event cancellation insurance—which covers an association’s losses if an event is cancelled, curtailed, or abandoned—is so important. In a nutshell: “Having this insurance coverage could be the difference between having the finances for future meetings or not.”
What trends are you seeing in event cancellation risk management?
Associations are purchasing event cancellation coverage when their events are scheduled to be held in high-risk areas. Some associations purchase coverage when an event is scheduled to be held in coastal cities during hurricane season or on the West Coast, where there is a higher exposure for earthquakes, or if their event is scheduled to be held in winter months and they want financial protection if the event has losses.
What best practices should associations adhere to when purchasing event cancellation insurance?
Associations should purchase the coverage well in advance of their event or purchase a multiyear policy. Many hotel contracts are signed years before an event, and that is when the financial exposure starts. Purchasing an event cancellation policy in advance would provide coverage for the entire policy term should something happen to any of the insured events.
What’s involved in obtaining a policy?
Associations should request a quotation by sending in the event details, including their budgeted revenue and expenses. They should disclose exposures if the event will include speakers, virtual meetings, or outdoor events. They should check the insurance policy on the terms and conditions, as well as review the policy’s exclusions. And finally, always ask your insurance company or agent questions to fully understand the event cancellation coverage.