Claims Success Story: Event Cancellation Insurance (ECI) Policy
TRENZ, a major tourism industry showpiece event for New Zealand, was an early casualty of the global COVID-19 pandemic. Hosted by Tourism Industry Aotearoa (TIA), TRENZ had over 340 New Zealand tourism operators set to attend in Christchurch, with over 1200 registered delegates including buyers from 29 markets around the world. The cancellation was a significant blow to the industry.
However, working with Marsh, TIA was able to pursue their claim under their ECI policy that was put in place to provide cover in the event of cancellation of or disruption to the showpiece gathering. The swift ECI payment allowed TIA to refund members and sponsors without putting TRENZ in financial hardship.
The global proliferation of COVID-19 and its impact on international travel was the trigger required for the claim under the ECI Policy. Marsh worked closely with both TIA, the insurers, and the appointed loss adjustor to manage the claims process from start to finish.
Event Cancellation Insurance explained
Event cancellation insurance can provide protection from unforeseen loss or circumstance which results in necessary cancellation, abandonment, disruption or rescheduling of the event. Examples of such loss or circumstance which may be unforeseen when procuring the insurance cover are adverse weather events, non-appearance and future unknown communicable disease outbreaks. Any one of these risks can seriously jeopardize the short-term and long-term viability of the event. However after the World Health Organisation officially announced COVID-19 as a pandemic, most new ECI policies in Australia will exclude COVID-19 related coverage.
Aside from TRENZ, another example of an event cancellation policy put into place by Marsh was for an outdoor festival in Auckland early in 2020. Cover was purchased to protect sponsorship revenue for the event organisers. If it rained on the parade and the festival did not proceed, the policy would have reimbursed the event organisers for the lost sponsorship revenue. If the event did not proceed, the event organisers’ would have been able to reimburse the sponsorship revenue to their stakeholders, strengthening the relationship between the parties, and greatly improving the prospects for a return of the event in 2021.
Why should someone buy event cancellation insurance?
In addition to the peace of mind of having cover for cancellation or abandonment, there are also great benefits that only an insurance policy can provide in the lead-up to an event, such as:
- Funds can be drawn from the policy to expedite services and ensure that the event can proceed.
- Expert real-time advice from the appointed loss adjustor at the time of loss.
- Specialist advice from your event broker to assist in reducing an event promoter’s reputational risk.
When should someone buy event cancellation insurance?
The risk begins as soon as costs are incurred. This could be months before the event takes place. This is when the insurance cover should be put into effect. Leaving event cancellation cover to the last minute significantly reduces the likelihood of obtaining the right cover at competitive rates; cover sought later may be offered on higher terms and at a higher premium. By engaging Marsh as their insurance partner from day one, the event organiser or promoter is able to consult with and draw upon the expertise of Marsh to better ensure the appropriate insurance cover and risk transfer is put into place.
To better understand, manage, and measure the risks relating to events, please contact us here.