Event Insurance More Important for New Zealand Event Organisers Than Ever
By Daniel Rosser – Crombie Lockwood Senior Broker
Luckily for us New Zealand is now in the spotlight as a destination for world-class events more than ever before. If it was ever in doubt the successful hosting of the Rugby World Cup and co-hosting of the Cricket World Cup proved that we have the infrastructure and expertise to manage big crowds and complex logistical requirements.
Major concerts, shows and events deliver many financial benefits to promoters, local businesses and the wider economy. However they require significant investment and can carry substantial risks such as unavoidable cancellation, abandonment or postponement.
NZ – Often the last stop on tour
Madonna, Fleetwood Mac, Robbie Williams and Elton John and many other multi-million album selling performing artists are due here over the next six months. While that is exciting New Zealand is often added on to the end of big world tours and unfortunately it is not unusual for them to be cancelled due to poor health or personal issues. For example The Black Keys had to cancel their planned tour here due to a serious shoulder injury to their drummer Patrick Carney. R&B singer Chris Brown has recently been denied entry to New Zealand due to his felony convictions, unless that is resolved the event will be cancelled and the concert promoter will have to refund ticket sales.
Risks to events in New Zealand
There are many obvious threats to the success of an event, such as the weather or special issues such as construction delays. However, there are many more risks that the event organiser and other involved parties need to consider. Those risks vary greatly depending on the location of the event and the type of entertainment and can include transport delays, sickness, staff problems, equipment failure etc.
Experienced event organisers don’t plan for things to wrong at an event but they do plan for the risk that something outside of their control might go wrong.
While the majority of sports events go without a hitch, there are also many examples where they have been cancelled or disrupted, Christchurch was due to host a number of the Rugby World Cup matches in 2011 but was unable to because of the earthquake damage. The stadium, infrastructure, hotels and training grounds were damaged to the extent that it was clear that the matches could not go ahead as planned. Fortunately, the event insurance policy that was taken out came into play and covered the loss of revenue from these games, as well as the additional costs of moving them to other venues.
Being insured for unavoidable cancellations
Lloyds, the oldest insurance company in the world has staff specialising in assessing the risks around events and any other odd competition or gimmick. In most cases event organisers are concerned with insuring irrecoverable costs and expenses incurred as a result of the unavoidable cancellation, abandonment or postponement. In addition to these lost costs, loss of profits which would have been earned had the event gone ahead are insurable, assuming that they can be satisfactorily quantified.
Naturally, insurance companies may later try to retrieve their pay out from the absent band or guest speaker, but at least the promoter and visitors will not be left out of pocket. In the case of conferences or music festivals, it may be hard to prove what impact one particular missing band or guest speaker would have on the attendance levels, especially if the event has a large number of performers or speakers. In most cases, the insurance company would negotiate a settlement based on statistical data or how many punters want their money back.
Concerts and events rely on insurance
The insurance industry plays a key role in ensuring the continuation of the concerts, festivals and matches we enjoy and take for granted. However in most cases public liability insurance is not a legally compulsory requirement.
Public liability insurance is an important consideration if you run a business that involves interacting with members of the public. That's because if your business is ordered to pay damages for causing injury or property damage, public liability insurance will cover these costs as well as any associated legal or hospital fees. As a result, it could mean the difference between your business staying open to host future events or going bust.
Public liability insurance will drastically reduce your overall financial risk and is recommended for anyone planning a public event.
If you have any questions about event insurance, get in touch with our team for more information.