Risky business

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Sitting in luxurious offices in the heart of the City of London, one of the great financial centres of the world, with an original Jeff Koons artwork for company, it’s easy to think we are in the wrong game. Here we are at the offices of Hiscox, the specialist global insurer with 100 years of experience and 30 of those in live events. Yes, insurance is big business, and it’s becoming recognised as an increasingly important and essential one in the events industry – which is one of the reasons why the Association of Event Organisers (AEO) has renewed its partnership with Hiscox. “We are proud to be the event insurance partner to the UK’s leading event organiser trade body,” said Martin Linfield, global product head for event insurance at Hiscox – who has insured everything from Posh and Becks waxworks to £1m of motorcycles at UK events. “We have been working with the AEO for eight years as a key partner. We offer a discount for AEO members, organisers and exhibitors, but I have to say the partnership is more about the knowledge share. It’s about imparting the knowledge from all the claims we have settled for cancelled events. “I hear so many event organisers say ‘I don’t need insurance because nothing goes wrong with my event’ but the cancellation insurance and things that happen can be the most bizarre. “Even if you have been running events for 30 years, sometimes there is nothing you can do in certain situations, which is why you need insurance. “The partnership with the AEO gives us extra knowledge about the contracts between event organisers, venues and suppliers, so we can help anyone involved in the events industry.”More often than not, cancellations close to the show are inevitably caused by the weather, with outdoor events in Britain’s unpredictable climate particularly exposed. However, indoor events can also be victims of inclement weather, from flooded car parks to high winds or even six feet of snow. “If you have indoor events, we still pay plenty of claims for bad weather,” says Linfield. “We had a big corporate event in Celtic Manor and there was six feet of snow on the ground. It was too dangerous for visitors to get to the venue, so it had to be cancelled, and we paid out. Because no two events are the same, there is a wide range of perceptions and attitudes about transferring the risk away to another party – which is usually through insurance. During the recent recession, more people were buying event insurance, but going for the simpler options to protect budgets and revenue against a backdrop of uncertainty. “Event organisers are busy people and they focus on getting the event on and bringing the money in, and often insurance falls off the back page,” says Linfield. “What we have tried to do is demystify event insurance and make it clear what can and can’t be covered for a bit more money. The feedback from event organisers demanded that. We tried to fit their needs where they demanded a more bespoke solution.” Of course, the nature of many UK organisers’ portfolios is also changing, with more looking to new and emerging markets to geoclone their successful shows or to acquire events. The insurance needed to adapt to that changing situation, but also to mitigate different risks in different countries and regions. “We are a UK insurer but we insure events all over the world,” says Linfield. “Each country has a different set of potential risks and liabilities, such as kidnap. The risks can be greater and more diverse in other countries. “The ASEAN and BRIC countries have more natural disasters, and therefore more likely to require insurance than in the EU.” Clearly insurance is not a simple issue, but is also one that organisers ignore at their peril. Aside from the weather, natural disasters and political unrest, often the biggest dangers are the unforeseen and totally unpredictable – that can happen anywhere at any time. Linfield says that the biggest claims in recent years in the UK have been bizarre and unpredictable. He cites a murder outside a venue the night before 2,000 delegates were due to arrive as a case in point. Access to the venue was denied as police had closed down the area for forensic investigations. As unusual and sensational as this may sound, it has happened twice in the UK. Ultimately, the decision to take insurance, and for what, falls squarely with the organiser. “We put the decision back into the organisers’ hands,” says Linfield. “We give all the options and offer general advice and let the event organisers choose exactly what they want. For every event, we price up all possible scenarios and then let them decide what they feel they require. “Whenever I talk to event organisers who are running shows around the world they know a lot about what is going on on the ground, and we complement that.” “We are not just there to take the money. We can give some benefit rather than just being there to settle a claim. We can give risk advice, which is better for us to sort it out before it happens.” Be proactive Michael Price, contingency underwriter at Beazley Group, provides his take on event insurance. What insurance can you offer exhibition organisers? Our core products include event cancellation insurance, which is protection for the loss of costs or income as the result of having to cancel an event for reasons beyond their control. This can include reasons such as bad weather, non-appearance, terrorism, strikes and so on. We also offer public and employers liability cover for events, insuring organisers against claims brought against them as a result of their negligence leading to bodily injury of anyone attending their event, or third party property damage at the event. This is a legal requirement which all organisers should have. We can also offer an extension for event property cover, insuring against loss or damage of hired in or owned equipment being used for the event.Why do organisers (and venues and suppliers) need your products? Event liability insurance is a legal requirement, therefore all organisers should have this cover, which can be arranged on a one off or an annual basis. From an event cancellation perspective, organisers should be looking to protect themselves against the risks of having to cancel their event for reasons beyond their control. Should an event be cancelled, abandoned or postponed, the organiser will almost inevitably be left footing the bill for the irrecoverable costs and possibly a loss of revenue due to having to refund delegate fees.Do enough people in the exhibitions industry have specialised insurance? The conference and exhibition industry does seem to be aware of the need for this cover, but often we find that organisers feel that because their event is indoors, the weather can’t affect it, so that’s their biggest concern allayed. Not all organisers are perhaps aware of the other perils a cancellation policy covers. Often claim examples and case studies really help bring the value of the cover to life.They say you only know you need insurance when it is too late. Is that fair? Unfortunately this is too often the case. A lot of organisers take a reactive approach to buying insurance meaning they have already suffered a significant loss before they consider buying cover for the next year’s event. The earlier cover is purchased, the bigger benefit an organiser will get from it.Some organisers say the cost of insurance is prohibitive? The cost of event cancellation cover can be extremely competitive, especially for the conference and exhibition industries. For example, to insure an exhibition with a £100,000 budget, the cost could be as little as around £300, which is a very small price to pay in comparison to the budget an organiser has exposed.Exhibition organisers’ needs may vary considerably, how bespoke are your insurance solutions? This is not an “off the shelf” kind of product, therefore all policies are tailored to meet an individual organiser’s needs. We will insure their specific exposures relevant to the event they are looking to protect and the exact budget amounts they need to cover. For instance, if they are organising an exhibition in Turkey, we will include cover for earthquakes. If it’s an event in Florida, we will include cover for hurricanes and windstorms. If their concern is bad weather stopping delegates getting to their event, we include Enforced Reduced Attendance cover for no additional cost. If they are worried about the key speaker falling ill, we can cover this too.Do you have any examples of where you have helped policy owners when things have gone wrong, to show the value of having insurance? We try to do this on every single claim – it’s not just about reacting when the event has been cancelled. We try to help organisers do everything they can in order to keep their event going – whether that’s paying the additional costs to bring in a replacement key note speaker or covering the increased costs of finding an alternative venue – our approach to claims is very much a proactive and hands on one.Do you have dedicated exhibitions experts? Whilst the team is not solely focused on the exhibition industry (we insure all kinds of events), it does make up a large proportion of our account, and through years of experience we’ve developed a leading exhibition cancellation product which gives extensive cover at competitive pricing.Four of the world’s top six event planners insure with you, why is that? We have one of the largest and most experienced teams of contingency underwriters in Lloyds and are the market leaders in this field. We insure events all over the world, and our knowledge and understanding of organisers’ needs is a result of this experience. We also try to educate organisers on the risks they face and some of the eventualities they may not have considered. This was first published in the July issue of EN. Any comments? Email Annie Byrne
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