Coronavirus and Event Cancellation
Mar 5, 2020 9:07:02 AM
It’s dominating the news headlines and our conversations as a world watches the development of the Coronavirus (COVID-19) outbreak and its progression to becoming an officially declared pandemic.
Though most cases and deaths have occurred in China, where the outbreak began, the virus has been spreading fast throughout Asia, the Middle East and now Europe. COVID-19, which it would seem originated from a food market in Wuhan, China, has forced governments all around the world to implement contingency measures in the attempt to stop or realistically slow the spread of the disease, including limitations on movement of people into and within their borders.
The event industry as much as any has been aware of such risks for many years, but the reality of the potentially devastating consequences is only now hitting home to the rest of the industry.
Europe is already seeing the effects of a regional outbreak in Italy with numerous soccer matches being played behind closed doors or rescheduled. The Ireland vs Italy Six Nations rugby match, despite it being a home game for Ireland, was postponed due to the fear of large numbers of fans travelling from heavily affected regions of Italy. Switzerland has banned indoor public events over 1,000 people and France has a similar ban on events with 5,000 or more attendees.
Am I covered?
Communicable disease is a peril that has the potential to cause an aggregation of losses to insurers across a wide number of events and regions, so it is generally excluded from standard cancellation insurance policies. Most insurers will, however, offer this as a buy-back option, in a similar way to that in which terrorism is often handled. As an organiser, you therefore will have had the option to extend your protection to include cancellation due to outbreaks such as Coronavirus. If you are unsure, read your policy documents carefully or ask your broker/insurer.
What if I am not covered?
Unfortunately, it is most likely too late to buy cover for this outbreak, as you cannot buy cover for something that has already occurred, whether that is adverse weather, earthquakes, volcanic eruptions etc. “You can’t insure a house for fire if its already burning!”.
This perfectly highlights the benefits of buying insurance cover early. If the insurance had been bought before the outbreak, with communicable diseases included, it would have been covered. So, simply, buying early maximizes the cover you have. Good advice would always be, as soon as you have a financial commitment on an event, you should be insured.
It will be a difficult time for event organisers planning 2020 events, whilst unable to buy cover for what they may see as the primary risk of cancellation. If an organiser begins to incur costs however, it is important to remember the wide range of more common triggers for cancellation that could still affect their event and talk to their insurance consultant for tailored advice.