Event cancellation insurance - is it really worth it?
Outdoor events carry a unique risk that indoor events don’t: the weather.
Outdoor events hold a special place in our hearts, offering a unique blend of natural beauty and shared experiences. Whether it's a music festival, an outdoor wedding, sporting event, or community gathering, the allure of open-air events is undeniable. However, the allure comes with a predictable dose of uncertainty and risk, and ironically, that is unpredictable weather.
The saying, "you can't control the weather," couldn't be truer in the context of outdoor event planning. However that’s no reason to shy away from planning outdoor events. As event organisers, we can minimise the risks by looking at what we can control.
In this article, we'll look at the key elements to be considered in regards to planning for event cancellation due to inclement weather. Here you get a head start in taking control of the risk management process for outdoor event planning. We will help your decision-making and help you determine if event cancellation insurance is worth it for your upcoming event. While there might not be an easy answer, there are certainly steps you can take to navigate this challenging terrain.
Key takeaways:
Event cancellation insurance is certainly expensive and annoying. If you do decide to get event cancellation insurance, work with your insurance broker to have a clear and joint understanding of the triggers/reasons/circumstances that will lead to an event being postponed or cancelled - to make sure you are covered properly. Make sure you know who in your team is responsible for making decisions to postpone or cancel.
Speak with your ticketing company to understand refund processes. Understand what circumstances you do and don't have to refund (E.g. if only half the concert can continue due to rain or lightening delays then do you need to refund?).
Know how much $$ are you committing to pay to event suppliers and contractors. Most event suppliers require a deposit before the event day and then they will have a cut off notice for when you are required to pay the remainder, regardless of whether the event proceeds or not (it’s usually 24 hours prior or when they pack their trucks for transfer to the event site). Check your booking conditions.
Some event organisers of outdoor events don’t get event cancellation insurance because they decide it’s not worth it. In which case, you need to have clear idea about the potential costs if you do decide to postpone or cancel the event. Know how many event supplier and contractor costs you’ll be committed to pay (if you cancel or postpone at very late notice).
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Understanding event risk and weather challenges.
Outdoor events are great, but they come with inherent risks that indoor events don't face. It’s not an exaggeration to say that the weather can play a significant role in determining the success (or failure!) of outdoor events and festivals.
Rain, thunderstorms, lightning, wind, extreme temperatures are not an event planner’s best friend. Adverse weather can be a significant factor in causing event delays, rescheduling, and closures. Chances are you have firsthand experience of inclement weather at an event: a music festival disrupted by a sudden downpour, a wedding ceremony affected by gusty winds, or a sports event halted due to lightning. These scenarios not only dampen the mood but also create potentially life-threatening event risks. It's crucial for event planners to recognise and prepare for these risks.
But here's the twist: not all weather risks are equally threatening.
This is where the concept of "risk thresholds" or “triggers” comes in. Setting risk thresholds or triggers for action can help event organisers decide when to go ahead and when to call it off. Take wind gusts, for instance. While a breeze might not be bothersome, strong gusts can turn tents into flying saucers and be incredibly dangerous.
Weather risks form an important part of our risk management planning consultations for our clients. When working with our clients, we help them understand the potential risks of their specific event and the triggers for action. You can get a copy of our inclement weather triggers in our event risk management plan template in the Event Risk Management Kit.
The role of insurance in event risk management.
Insurance acts as a safety net, offering financial protection against unforeseen events.
Event cancellation insurance provides coverage for revenue lost or expenses paid in arranging an event, plus your brand protection and other costs arising from cancellation, abandonment or postponement. You can get event cancellation insurance for any type of event, however it’s in the field of outdoor events that this insurance becomes important.
It's not just about ensuring your investment but also about safeguarding attendees, vendors, and stakeholders. Event insurance should be tailored to cover weather-related risks, encompassing thresholds, triggers and circumstances that might lead to event postponement or cancellation. Collaborating closely with insurance brokers is key to understanding the extent of coverage and making informed decisions. You should be crystal clear about the decision-making process that leads up to an event cancellation, and you need to be able to justify it as the safest action to take.
RachellA SAYS
“Weather might be the wild card in event planning and can cost you a lot if you’re planning an outdoor event, but with some clever moves, you can still keep your attendees safe while not breaking the bank.”
What to do if you cancel your event.
Imagine this: it’s blowing a gale and there is a 95% chance of severe weather and lightening for the rest of the day. What will you do? The decision to postpone or cancel an event due to weather isn't easy. It involves multiple factors and stakeholders. Safety concerns, attendee expectations, logistical challenges - all these must be weighed against the potential success of the event. Collaborative decision-making is essential. It should involve key event organisers, stakeholders, and may even include local authorities in some cases.
Know who is the decision-maker.
Establishing clear roles and responsibilities ensures a streamlined process, particularly in the face of uncertainty. We’ve seen too many inexperienced event planners leave it until the last minute before working out who will make the hard decisions. Spend time thinking about who will be the decision-maker before the event.
Refund processes for attendees.
One of the toughest parts of cancelling or postponing an event is managing attendee expectations and refunds. Attendees invest not only their money but also their time and emotions into the event. Communicating transparent refund policies during ticket purchase is essential. Consider different scenarios: full refunds for complete cancellations, partial refunds for partially affected events, or even alternative compensation options. This clarity helps manage attendee frustration and maintain a positive relationship.
Managing event contractor commitments.
Outdoor events involve a network of contractors - from vendors and performers to caterers and decorators. These contracts often come with financial commitments, which can't be ignored even if the event is disrupted. Negotiating flexible payment terms with contractors is a strategy to consider. Aligning contract terms with potential weather-related uncertainties ensures that everyone involved is on the same page. Clear communication about deposit deadlines and payment schedules is crucial to avoid unnecessary financial losses.
Alternatives to event cancellation insurance.
While event cancellation insurance provides comprehensive coverage, it might not always be feasible or cost-effective. Some event organisers opt to forgo insurance and instead develop contingency plans. These plans include backup venues, alternative dates, or scaled-down versions of the event. The key is to engage stakeholders and vendors in these discussions and ensure everyone is prepared for unexpected changes. Flexibility and adaptability become the driving factors in such scenarios.
Insights from experienced event organisers.
Learning from the experiences of seasoned event organisers can provide valuable insights. Real-world case studies showcase events that effectively navigated weather challenges. From music festivals that reimagined their stages due to heavy rain to weddings that shifted to indoor locations in the face of unexpected storms - these stories offer lessons in resilience and adaptability. Additionally, expert tips from event veterans provide actionable strategies for weather-proofing outdoor events.
Alternatives to event insurance: secure a backup event venue big enough to hold your event.
Frequently asked questions about event cancellation and insurance.
What types of weather risks should outdoor event planners be most concerned about?
Event planners of outdoor events should be mindful of risks such as rain, thunderstorms, lightning, wind, and extreme temperatures, all of which can disrupt events and pose significant safety hazards.
How can I ensure my event insurance adequately covers weather-related risks?
Collaborate closely with insurance brokers to get quotes and tailor outdoor event insurance coverage to include specific triggers and circumstances that might lead to event cancellation or postponement due to adverse weather conditions.
Who should be involved in the decision-making process for event postponements or cancellations?
The decision-making process should involve event organisers, stakeholders, local authorities (if necessary), and anyone with a vested interest in the event's success. Ensure you have a well-documented event risk management plan, clear chain of command and know who has the final say.
What considerations should I keep in mind with regards to refund policies for attendees?
Clearly communicate refund policies during ticket purchase, including scenarios for full and partial refunds based on the extent of event disruption. We recommend you consult your ticketing agent on standard procedure and be aware of local laws.
Are there alternatives to event insurance that can manage weather-related risks?
Yes, developing contingency plans that include backup (indoor) venues, alternative dates, or scaled-down event versions can help manage risks without relying solely on insurance. However, be aware that late-notice cancellation or postponement of an event may still carry financial costs.
What key takeaways can event organisers learn from experienced professionals in the industry?
Seasoned event organisers know the importance of flexibility, adaptability, and effective communication in successfully managing weather-related challenges when planning an event.
What strategies can help mitigate potential financial losses for contractors due to event cancellations?
Negotiate flexible payment terms with contractors, aligning payment schedules with potential weather-related uncertainties.We recommend you read booking agreements carefully and understand the potential costs of an event cancellation.
Rachella SAYS
“Planning outdoor events is like collaborating with Mother Nature - you never know when she might decide to improvise the script!”
Wrap up.
In the world of outdoor events, the only certainty is uncertainty. Weather disruptions can be disappointing, frustrating, and even financially burdensome. However, with careful planning, collaboration, and informed decision-making, event organisers can navigate these challenges. While there's no one-size-fits-all solution, a combination of event insurance, contingency planning, and experience-driven insights can pave the way for successful outdoor events. Remember, the weather might be beyond our control, but our ability to prepare and adapt isn't.
WRITTEN BY RACHELLA THOMAS
Rachella Thomas is the powerhouse behind award-winning event consulting agency, Event Kit. With her 20+ years’ experience producing world-class events for high-profile clients and brands, Rachella has honed her skills to create a valuable resource for event planners looking to elevate their events. Her wealth of expertise has established Rachella as the go-to event consultant and mentor for aspiring event professionals and businesses alike.
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