How to reduce insurance cost in a changing climate with advice from Integro’s associate director Gary Brooks.
They do say you that you can’t eliminate risk. In terms of financial risk, in some circumstances, that’s not quite true; you can transfer it, and insurance is a form of risk transfer. For the payment of a premium you can move the risk of a financial loss to an insurer.
There are of course numerous risks that an event organiser is confronted with from the planning phase through to the execution of the event. For the past 30 years and more, individuals at Integro have been providing insurance to the event industry at a multitude of levels covering many different subjects such as injury liability insurance and equipment insurance. In respect of outdoor events however, the hot topic arising from the 2019 season is event cancellation insurance.
A storm brewing…
In August, this subject of cancellation insurance hit the headlines due to the arrival of storm Idris and the subsequent cancellation of an unusually high number of UK music festivals including Boardmasters, Houghton Festival, Rewind Festival North and a large number of other outdoor events spread across the country. Much of the subsequent media coverage centred on the question ‘Does this mean that event cancellation insurance will be more expensive in the future?’
Our reach in the live event industry means we have an almost unique perspective that gives us the long view on these types of losses, where there are multiple cancellations due to one cause.
Whatever your position on the subject, there is an increasing view that our climate, at least in the UK, is becoming more unpredictable. It’s true to say that going forward, when an insurer considers a quotation for an event they will be less reliant on weather statistics and more reliant on what the event organiser is actually doing to manage their own risk and guard against a cancellation. It’s becoming clear that in 2020 we will have to work harder to demonstrate that the risk being transferred is being well thought through and well managed.
What do insurers want to see?
There are a number of sudden and unforeseen scenarios that could give rise to a cancellation of course but, in respect of outdoor events the focus is often on adverse weather and within that the most common cancellations that we see are due to rainfall or high winds.
When obtaining a quotation from insurers there are certain things they want to know, and certain documents they will want to see. The quality of information provided at this stage will have an effect on the decision an insurer makes about not only the premium but conditions of the policy too. To get the best deal possible you should aim to provide the following:
• Site Plan
This must outline the location of the event in the context of the surrounding areas, while also showing the positioning and layout of the main aspects (staging, bar, merchandise stalls etc.)
• Event Budget
This will need to detail all costs and revenue streams that you are expecting in respect of a successful event. The budget supplied will form the basis for the amount or ‘sum insured’; accuracy here is key
• Event Safety Management Plan
Insurers will want to see the number of individuals and number of contractors working on the event and understand what their roles are. Crucially however the Event Safety Management Plan should also include a wind management plan and a wet weather management plan
• Wind Management Plan
Insurers will want to see that the organiser is aware of the maximum wind speeds that all temporary structures are able to withstand, furthermore there needs to be a written plan that explains the action points at each wind speed level up to those critical levels
• Wet Weather Management Plan
This must outline how wet weather is being monitored and, crucially, what contingent equipment or scenarios are available to be deployed to combat the effects of wet weather.
The more information we supply to a potential insurer the better, and by that we mean the more the chance of a fair cost. Make sure you know the history of the site you are using; How many events have taken place there in the past? Have there been any cancellations due to wet weather? Have you checked the Environment Agency flood map? Is there hardstanding anywhere across the site, even if it’s for use by production only? If not, are you using trackway?
High winds are often an issue in the UK, even if the structures you are using are not supporting people there is still a risk that items such as advertising hoarding or stage dressings become loose and cause injury. You need to have a comprehensive wind management plan that can demonstrate to insurers the risk thresholds of certain wind speeds. It will help to be able to clearly demonstrate exactly what the consequences of high winds are and, of course the more resilient your structures, the better risk you present.
As stated in all of the above there will be an enhanced focus on your contingency planning. You will need to demonstrate that you have a budgeted amount set aside to draw down in order to call on items such as extra trackway, wood chip, straw, or even the ability to adjust the position of the site if possible. The more you can demonstrate that you have thought through these scenarios and budgeted for them, the greater the downward pressure on insurance cost.
ABOUT THE AUTHOR
Gary Brooks is associate director at Integro Entertainment & SportInsurance Brokers, a speciality brokerage that works with many of the biggest names in the music and events, film and television, theatre, and sports industries.
Integro’s experience means it understands the nature of risk and has innovative solutions to clients’ exposures, designing insurance programmes that are responsive to complex needs.
The Music & Events team is drawn from the strategic acquisition of respected insurance brokers Doodson Broking Group, Robertson Taylor W&P Longreach, ACJ and Stonehouse Conseillers. Integro has access to a range of insurers within the market, as well as its own exclusive delegated authority scheme, underwritten by one of the world’s largest insurance companies. 0161 419 3089 / www.integroentertainment.com
