Will Event Cancellation Insurance Cover the Coronavirus?
Associations worried they might have to cancel a meeting due to the Wuhan coronavirus typically won’t have coverage unless they purchased a communicable disease rider, says an expert.
As Wuhan coronavirus fears spread worldwide, associations may be concerned about its potential impact on their events, particularly if they’re scheduled to take place in a region affected by the deadly disease. While associations can purchase event cancellation insurance to reduce losses if their meeting were to be canceled for an act of God, damage at the venue, or something beyond their control, communicable disease coverage often isn’t included, said Seth Fleischer, a business development professional at Aon Affinity.
“If somebody purchased a policy prior to the outbreak of coronavirus and it had communicable disease as part of the coverage, then they could potentially be covered,” Fleischer said. “Typically, communicable disease is an optional coverage that you can buy for an additional premium.”
That means associations that didn’t purchase the additional coverage would bear the brunt of the financial loss from any event they’d have to cancel in an outbreak region.
“The worst-case scenario is, if someone has an event in China and it was completely canceled and they had no coverage, you’re looking at loss of revenue from having to refund the attendee registrations, the exhibitor registrations,” Fleischer said. “It’s a full loss of revenue for the association from that event.”
Even though the coronavirus is very new, it is already affecting the event insurance industry. With the World Health Organization declaring it a global public health emergency on January 30, insurers are not covering the coronavirus in new policies.
“Looking forward, anyone that is contacting us now and saying, ‘Can I get coverage for coronavirus?’, it’s being excluded as a pre-existing condition,” Fleischer said. “Even if they’re willing to pay, they’re not going to get coronavirus coverage.”
While the coronavirus is specifically being excluded right now, that doesn’t mean associations should skip adding communicable disease coverage. “There are other viruses, other diseases that are not being excluded specifically right now under communicable diseases,” Fleischer said. “Definitely, you want to ask the carrier about that option and the additional coverage.”
So, what happens if an association has communicable disease coverage, but the event is not in the affected region: Would it be covered for losses related to attendees or speakers unable to come because they’re in the affected region? Probably not, according to Fleischer.
“The intent of that coverage is for a cancellation of the event, or an abandonment of the event,” Fleischer said. “The intent is not to pick up losses related to, ‘I’m having an event in the U.S. next week, and it has 15 people who were supposed to come from China.’”
If the coronavirus has your association spooked about what could happen to your next meeting, Fleischer suggests reviewing the coverage you have or, if you don’t have any coverage, looking into getting some.
“One thing we always stress is the advantage of purchasing this type of insurance well in advance of the event,” Fleischer said. “Often times, these policies can be purchased for multiple years. Also, multiple event policies are possible—for example, if you had a spring and a fall meeting every year.”
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