What is Event Insurance
The legal landscape for insurance coverage for losses associated with COVID-19 will evolve as the outbreak progresses and claims are made. Amid the coronavirus pandemic, several businesses have had to shutter their doors indefinitely until the threat passes. Event insurance is not business interruption insurance. Event insurance is a very different type of insurance coverage. Think cancellation, such as the planned July 2020 Summer Olympics in Japan, the Boston marathon, and major music festivals.
Typical event insurance covers two broad categories: (1) coverage for third-party bodily injury and property damage that may arise out of an event; (2) event cancellation insurance may cover costs and expenses or revenue should an event be cancelled, abandoned or disrupted due to reasons beyond the insured’s control, including: communicable disease, civil unrest, war, terrorism, weather (rain, hurricane, tornado, snow etc.), and other interrupters. This second category event cancelation insurance is usually purchased by the host of an event. Typical purchasers include music, cultural, food and literature festivals; carnivals, parades, food truck festivals; conferences, exhibitions and trade shows; parties, banquets, dinners and dances; concerts, shows and theatre productions; Triathlons, marathons and fun runs; Weddings and birthday parties; sporting events.
Hosts purchase event insurance to ensure that they receive at least some income if the event is canceled. However, post-COVID-19, it is very difficult to find an insurance company that will offer insurance policies to customers over government shutdowns or quarantines. After the first SARS outbreak, many companies began excluding them. However, policies purchased prior to January 2020 may still cover infectious disease outbreaks.
Specified Causes versus All-Risks Coverage
Insurance companies generally offer one of two types of special event policies. These are policies that are activated only when a specific calamity prevents an event from occurring. Another type of coverage covers the event regardless of what caused the event to be canceled. As an example, an event occurring in San Francisco may elect to cover the event in case of an earthquake.
All-risks, on the other hand, covers any reason for an event cancelation unless the reason is specifically excluded by the policy. An example that we find popping up more often today is government shutdowns or infectious disease pandemics. Many proprietors who purchase All-Risk event cancellation insurance policies are now realizing that their policies specifically exclude infectious disease outbreaks.
What Losses Are Covered by Event Cancellation Insurance?
Special event insurance varies widely since the types of investments that will need to be protected differ from one event to the next. Revenue and investment in an event are generally covered by the policy. But the quality of the policy is also related to the size of the premiums you pay. In other cases, you can cover expenses related to the prevention of a cancelation of an event. This could include filing lawsuits related to venue and more. Event cancelation coverage also covers losses related to a major reduction in attendance for a reason listed on the policy.
Essentially, policyholders can choose the type of coverage they receive, the extent of the coverage, and the quality of the coverage. You can make a claim for any loss related to a covered cause on your policy.
Covid-19 may have impacted your planned event, but you may have coverage that can help alleviate the financial pain.
Talk to a Bad Faith Insurance Attorney Today
If you purchased event cancellation insurance and the insurance company is now saying that they won’t honor the policy, call our Bad Faith Insurance Attorneys to discuss the issue you’re having. We’ll go over the terms of your policy and determine if the insurance company denied your claim in bad faith or simply made a mistake. Call today to learn more about how we can help.