As the 2019 festival season fades in the rearview mirror there is always a period of review and reflection for live event suppliers of all types, the insurance industry is no different.
For the past thirty years and more individuals at Integro have been providing insurance to the industry at a multitude of levels covering many different subjects, prominent among which of course is Event Cancellation Insurance.
In August this subject hit the headlines due to the arrival of storm Idris and the subsequent cancellation of an unusually high number of UK events including Boardmasters, Houghton Festival, Rewind Festival North and a large number of other outdoor events spread across the UK. Much of the subsequent media coverage centred on the question ‘Does this mean that event cancellation insurance will be more expensive in the future?’
Our reach in the live event industry means we have an almost unique perspective, that gives us a long view of these types of losses where there are multiple cancellations due to one cause.
Whatever your position on the subject there is an increasing view that our climate, at least in the UK is becoming more unpredictable, and it’s true to say that going forward when an insurer considers a quotation for an event they will be less reliant on weather statistics and more reliant on what the event organiser is actually doing to manage their own risk and guard against a cancellation due to adverse weather.
How you can combat cost increases in 2020
Insurance is a straight forward process of risk transfer, for payment of a premium you transfer the risk of a financial loss to an insurer. In 2020 we will have to work harder to demonstrate that the risk being transferred is being comprehensively thought through and well managed.
There are a number of sudden and unforeseen scenarios that could give rise to cancellation of course but, in respect of adverse weather, the most common cancellations that we see are due to rainfall, or high winds.
In respect of rainfall, make sure you know the history of the site you are using, this, of course, includes designated car parks and campsites. How many events have taken place there in the past? Have there been any cancellations to due wet weather? Have you checked the environment agency flood map? Is there hard standing anywhere across the site, even if it’s for use by production only? If not are you using trackway?
Then there will be an enhanced focus on your contingency planning, you will need to demonstrate that you have a budgeted amount set aside to us for items such as extra trackway, wood chip, straw, or even the ability to adjust the position of the site if possible. The more you can demonstrate that you have thought through these scenarios and budgeted for them the greater the downward pressure on insurance cost.
If you are using temporary structures then high winds can become an issue, even if the structures are not supporting people such as advertising hoardings or stage dressings the risk is that these types of structures become loose and cause injury, we have seen this at some events that took place in August despite the storm. You need to have a comprehensive wind management plan that can demonstrate to insurers the risk thresholds of certain wind speeds, it will help to be able to clearly demonstrate to insurers exactly what the consequences of high winds are, and of course the more resilient your structures, the better risk you present.
Overall there will be an enhanced focus on the management and control structure of the event. Insurers may well want to go to some greater level of detail not only on what decisions have been made during the planning and execution phases but also why the decisions have been made.
Price increases are not arbitrary in the insurance market, they represent a perception or reality of increased risk and the advice above is a start to effectively combating each of those.