Event Cancellation Insurance (Dallas Iaem)


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Description of how event cancellation insurance protects your assets, how claims are paid and how to buy event cancellation insurance

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Event Cancellation Insurance (Dallas Iaem)

  1. 1. Event Cancellation Insurance after the 2005 Hurricane Season BUTTINE EXHIBITION INSURANCE 125 PARK AVENUE, 3 RD FLOOR NEW YORK, NY 10017 T 800.964.4454, ext 21 F 212.986.2822 [email_address] www.buttine.com
  2. 2. Event Cancellation Insurance <ul><li>Objectives : </li></ul><ul><li>Effects of 2005 storms </li></ul><ul><li>What is Event Cancellation Insurance and how it helps you </li></ul><ul><li>When to buy coverage and what it costs </li></ul><ul><li>How claims are paid </li></ul><ul><li>How to purchase this insurance </li></ul>
  3. 3. The Short-Term Effects <ul><li>A spike in demand for Event Cancellation Insurance </li></ul><ul><li>Record number of cancellations, postponements and relocations Record Insurance Losses </li></ul><ul><li>Rates for Gulf Coast events increase due to projected Re-insurance (The Insurance Company’s Insurer) rates; 2006 est. are worse than 2005 </li></ul>
  4. 4. The Long-Term Effects <ul><li>A shift in the perception of Event Cancellation Insurance from a “selective” to a “compulsory” mindset for many </li></ul><ul><li>Event Organizers will need to re-evaluate their “Contingency Plans” </li></ul><ul><li>The cost of holding events at high risk locations – Gulf Coast during hurricane season, in the North during the winter or on the West Coast - should be considered </li></ul><ul><li>Potential insurance rate increases for events in High-Risk locations </li></ul>
  5. 5. Event Cancellation Insurance <ul><li>“ Event Cancellation Insurance – a form of customer service” Jack Withiam, Jr. GLM LLC </li></ul><ul><li>Pays your anticipated profit </li></ul><ul><li>Pays incurred expenses </li></ul><ul><li>Allows return of sponsorships, exhibitors fees and education/seminar charges </li></ul>
  6. 6. Event Cancellation Insurance (“what’s in it for me”) <ul><li>Security from this coverage adds value and helps grow your event… </li></ul><ul><li>It’s security to investors by providing a degree of certainty that their investment will be repaid </li></ul><ul><li>It provides security to owners (individuals, corporations, and non-profits) that expected profits will be there in the event of a covered claim </li></ul>
  7. 7. Event Cancellation Insurance <ul><li>No one wants an event cancellation so … </li></ul><ul><li>It pays the incremental cost of “making it happen” in event of loss </li></ul><ul><li>Pays the cost of rescheduling the event in same or new location </li></ul><ul><li>Pays the cost of combining a cancelled event with the follow-on event </li></ul>
  8. 8. When to purchase Event Cancellation Insurance <ul><li>When you have an economic interest in event: i.e. when’06 event concludes and you are selling space for ’07 event, or sign a lease and pay venue deposit </li></ul><ul><li>The rate is the same 2 months away from your event as it is 12 months – the more in advance you buy, the more covered days you get. </li></ul><ul><li>Best way is to buy two years’ in advance for shows that are tied to one facility, i.e. insure two years’ worth of revenue. </li></ul>
  9. 9. What Event Cancellation Insurance Covers <ul><li>Hurricanes </li></ul><ul><li>Snow Storms </li></ul><ul><li>Floods </li></ul><ul><li>Power Outage / Blackouts </li></ul><ul><li>Earthquakes </li></ul><ul><li>Building / Venue Damage </li></ul><ul><li>Strikes </li></ul><ul><li>Wild Fires </li></ul><ul><li>Terrorism & Avian flu- optional, but getting common </li></ul>
  10. 10. Event Cancellation Insurance Cost <ul><li>Rates are determined by: </li></ul><ul><ul><li>Location, Event Dates, Profitability </li></ul></ul><ul><li>Rates are usually less than .5% of booth/conference fees – more for EQ and hurricane areas </li></ul><ul><li>You can structure policies to ‘fit your needs and budget’ by using coinsurance, or cost sharing , and installment payments </li></ul><ul><li>Policy Limit must equal the show revenue – (usually) </li></ul>
  11. 11. Tips for buying Event Cancellation Insurance <ul><li>Utilize Specialists – IAEM and other ass’n plans </li></ul><ul><li>Avoid Generalists </li></ul><ul><li>Direct Access to the insurer </li></ul><ul><li>Develop a Contingency Plan and share it with your broker </li></ul><ul><li>If you know that your event can be rescheduled, be sure to let your broker know and share it with your insurance company </li></ul><ul><li>Understand your insurance company’s history in this niche </li></ul>
  12. 12. Information needed to get an Event Cancellation Proposal <ul><li>Event Details: </li></ul><ul><ul><ul><li>Event Dates </li></ul></ul></ul><ul><ul><ul><li>Name of Venue </li></ul></ul></ul><ul><ul><ul><li>Event Budget </li></ul></ul></ul><ul><ul><ul><li>Venue Contract </li></ul></ul></ul><ul><ul><ul><li>Loss History </li></ul></ul></ul><ul><ul><li>With this information, you should get a proposal within 72 hours </li></ul></ul>
  13. 13. Event Cancellation Insurance How a claim is paid <ul><li>The Principles … </li></ul><ul><li>Budget: Gross Revenue $1,000,000 </li></ul><ul><li> Expenses $ 750,000 </li></ul><ul><li> Profit $ 250,000 </li></ul><ul><li>A claim example – total loss occurs before opening ... </li></ul><ul><ul><li>Paid 100% exp @ time of loss $ 750,000 </li></ul></ul><ul><ul><li>Cash in Bank @ loss $ 250,000 </li></ul></ul><ul><ul><li>Refunds @ total loss a. $ 250,000 </li></ul></ul><ul><ul><li>Ins Co 1 st Payment b. $ 750,000 </li></ul></ul><ul><ul><li>Ins Co 2d Payment c. $ 250,000 </li></ul></ul>
  14. 14. How to File a Show Cancellation claim <ul><li>Call insurance broker or company ASAP </li></ul><ul><li>Designate one staff member & an alternate as ‘spokespersons’. </li></ul><ul><li>Tell exhibitors what you will do after agreement is reached with insurer. </li></ul><ul><li>Document all expenses and actions taken to preserve the show. </li></ul><ul><li>Get name of adjuster, call him/her and make sure they understand your position and plan. </li></ul><ul><li>Give regular updates to adjuster on status. </li></ul>
  15. 15. Claim Forms and Statements <ul><li>You have to prove the loss </li></ul><ul><li>A good short statement goes a long way (w ho, what, where, when, why) </li></ul><ul><li>No gratuitous information </li></ul><ul><li>“Just the facts, ma'am” Sgt. Joe Friday, Dragnet </li></ul><ul><li>Good information may allow a quick settlement and avoid protracted adjustment process. Attendance history is key! </li></ul>
  16. 16. Claim Forms and Statements <ul><li>No standard forms </li></ul><ul><li>To support your case - disposable cameras are good idea, keep local newspapers, weather reports, other evidence. </li></ul><ul><li>Collect names, employers, phone numbers & addresses of all witnesses. </li></ul>
  17. 17. One more thing … Exhibitor Liability Insurance <ul><li>Exhibitor Liability is getting critical due to cost of show manager’s liability insurance – it saves show managers’ policies from paying “other peoples claims”. </li></ul><ul><li>Many exhibitors do not have insurance and an insurance requirement is a ‘good thing’ for exhibitor and meeting mgr. </li></ul><ul><li>Foreign exhibitors may have insurance but it often does not pay claims in the U.S. </li></ul>
  18. 18. Event Cancellation Insurance <ul><li>This concludes our presentation … </li></ul><ul><li>… What are your questions? </li></ul><ul><li>Jack M. Buttine </li></ul><ul><li>BUTTINE EXHIBITION INSURANCE </li></ul><ul><li>New York, NY </li></ul><ul><li>(800) 964 4454, ext 21 </li></ul><ul><li>[email_address] </li></ul><ul><li>www.buttine.com </li></ul>