Terry Waller: Paying a premium

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Cost effective event insurance cover can be achieved, explains Terry Waller, managing director, Arc International, and NOEA council member

The inclination to delay effecting adequate event insurance until the last minute is a temptation that is all too often practiced by too many event organisers. Payment of an insurance premium, perhaps understandably, is often perceived as a wasted expense until something goes wrong, but delaying the decision could prove costly!

The ideal time to effect cover against cancellation/abandonment risks is as soon as the venue contract is signed, as this is when the organiser’s exposure to risk commences. Indeed, insuring early can save money. It is not possible to insure a building which is on fire is a good analogy. For an event to be cancelled or interrupted for reasons beyond the organiser’s control is depressing enough, but worse still if one is unable to obtain any financial compensation for the loss.

Apart from all the weather related problems experienced this year, the global events industry has in recent times suffered from other major incidents such as SARS and volcanic eruptions. All of these risks and others have been the subject of substantial claims settled by the insurance market on behalf of clients who were sufficiently prudent to affect the right insurance in time. However, as often happens, there were also those companies that requested cover “after the horse has bolted” – when it was too late.

There appears to be a greater awareness of the importance of public liability insurance compared to that of cancellation insurance. Companies that can demonstrate that they have a good risk management regime can reduce their premiums, particularly when most injuries and, hence, claims at events are “avoidable”. A company that has many and frequent claims will incur higher premiums in the future, compared to those who enjoy a good record.

To summarise, there are two ways to minimise premium cost – insuring early combined with a sound risk management programme. And, if the premium cost is factored into the overall budget at the outset, the insurance cost need not be a “bottom line” expense.