Published on: 8 June 2015 by Romil Motwani
Imagine planning for an event for months for it all to come crashing down just a few days before the event date. Sounds devastating, right? Well it is!
Months of planning and valuable resources have been poured into your event and now it’s all gone to waste. One such example of this is concert cancellations in Hong Kong, with Mika, The Killers, Mariah Carey and The Rolling Stones all suffering the misfortune of having to abandon their events in Hong Kong.
Many event organizers plan for the worst and purchase event insurance so that they can soften the blow of a cancellation or other unforeseen event. The event organizers of Mika’s sold out show in Hong Kong would have had to pay out HK$590 out of their own pocket to each person who bought a ticket, whilst The Killers concert was scheduled to take place at the Asia-World Expo Hall and the promoters wouldn’t have been able to recoup the cost of booking such a facility.
These expenses would have amounted to hundreds of thousands of dollars, but by purchasing an event insurance policy, organizers were able to mitigate their losses.
Event insurance covers a broad spectrum of risks and is not only limited to concerts. Event insurance can be purchased for weddings, exhibitions, sports events and many more types of events. However, most event insurance policies protect an individual or a group against unforeseen circumstances, damages incurred during the event, and in many cases provides public liability coverage. Event insurance plans can be tailor made for use in Hong Kong or around the Asia-Pacific region.
Additionally, the last few years has seen a huge expansion in event insurance options in Hong Kong, with non-appearance event insurance, public liability and exhibition insurance just a few of the coverage types added to the traditional options of event cancellation, postponement and a forced loss of audience situation. This is due to the increase in the number of events in Hong Kong, with music festivals such as Cockenflap coming into town and Ultra hosting their warmup tour in Macau. Also the birth of websites such as YourMum and TicketFlap in the last few years has led to growth in the Hong Kong event scene, which provides a greater demand for event insurance.
There are many types of coverage that can suit anybody’s needs whether an individual is looking for a Hong Kong insurance policy or something that provides coverage out of Hong Kong. The five main types of insurance are:
If an unforeseeable event causes an event to be cancelled, it is extremely unlikely that the coordinator will be able to recover all the pre-paid expenses. Event cancellation coverage protects against this risk by reimbursing the organizer for all irretrievable costs as well as paying the profit the producer would have made had the event continued. However, this is an option to the policy and must be added
Another covenant that the policy provides protects against is poor weather conditions. If an event is held indoors, the coverage will also protect against inclement weather that may cause the event to be cancelled. However, if an event is held outdoors, the organizer will need to purchase a different type of insurance for protection. It is important to note that the individual who is purchasing the policy can decide what level of protection they would like on the policy. For example, Hong Kong is known for having a very wet and rainy summer season but cancellation coverage for a yellow rainstorm warning will result in a higher premium than cancellation coverage for a red rainstorm warning. Therefore it is vital that the organizer understands the conditions of the cancellation coverage so that they understand when their event is covered and when it is not.
This type of coverage protects the risk from irrecoverable costs and lost profits due the non-appearance of an individual who is vital to the event, which may cause the occasion to be cancelled. There are many risks that this type of insurance protects, including the death, illness, accidental wounding or illegal detention of the vital person or his/her spouse, partner, parents or children (subject to certain restrictions). However, to be eligible for this type of insurance, the vital person involved will be required to undertake a medical exam to determine that there are no pre-existing conditions as long as the event is insured for more than US$250,000.
Forced loss of audience provides protection against risks associated with accessibility to the event venue that is out of the organizer’s control. The losses that are normally protected by this type of policy include demonstrations that prohibit access to the venue, strikes that impede entry to the venue (including air transport and public transport), inaccessibility from bad weather or natural disasters, non-functionality of the reservation system (over 72 hours) and periods of national mourning.
However, there is a caveat in most policies that the loss of audience must be a significant amount of the audience and not just a few members of the audience. Additionally, the non-appearance of audience members must result in a loss of the takings expected for the policy to be valid. As with the event cancellation policy, if a profit margin is declared, the booking agent will be reimbursed up to that profit margin.
Pubic Liability coverage protects the producer from losses as a result of any accidental bodily injury to any person, damage to property, obstruction, trespassing, interference, wrongful arrest, detention or imprisonment. Generally, public liability is required by the venue when organizing an event. Public Liability Coverage is an excellent option for any event as coverage starts at around HK$10,000,000 and can be raised depending on individual requirements.
Additionally, by pairing public liability coverage with any other type of event insurance coverage, organizers will have a more cost-effective solution whilst protecting themselves from all angles rather than purchasing each type of coverage separately and be exposed to certain risks. Failure to have a contingency plan in place for accidents can prove to be fatal and public liability coverage provides a financial contingency plan in case something were to go wrong with the event.
Exhibition Coverage mitigates the risk incurred by placing products at a public exhibition or conference by providing protection against damages and losses. There are three types of exhibition insurance, which are all risk exhibition coverage, exhibitor stand coverage and till damage insurance.
All risk exhibition coverage provides protection for any exhibit displayed at the exhibition whether it be a trade fair, craft market or similar event. Any accidental damage or destruction to an exhibit will be covered under the policy, so that the exhibitor can have peace of mind during the exhibition and focus on their product.
Exhibitor stand coverage protects against any accidental damage or destruction to the actual stand at the exhibition as well as all equipment, computers, accessories or any item that is physically affixed to the exhibit stand.
Till damage insurance coverage covers the policyholder against theft of the person responsible for entrance tickets, as well as the loss of receipts and burglary of the safe. The insurance is in force during the event and after the event until the till is transported to the bank to be deposited, so that is exhibitor are fully protected until their money is safe.
In all, event insurance coverage provides financial protection against many unforeseen circumstances, such as cancellation, non-appearance of a vital individual, accidents and damage. By purchasing an event insurance plan, an organizer can focus their full attention on ensuring that the event is successful, whilst not having to worry about the ramifications of a failed event.
CCW Global, Hong Kong’s leading bespoke insurance brokerage, can help to tailor any event insurance plans that you may be seeking to fit your specific needs, whether it be in Hong Kong or anywhere else in the Asia-Pacific region. With our insurance experts, we can provide you with the plan you need at the lowest possible cost.
If you would like to receive a free quote on an event insurance plan, please go to our homepage and fill in the quotation form at the top of the page. One of our insurance experts will get back to you shortly to discuss your specific needs.
Should you have any questions regarding Event Insurance and whether it is right for you, please contact us today!