The cancellation of the 2012 New York City Marathon, due to Superstorm Sandy, was disappointing to the approximately 47,000 runners who dedicated months to train for the race, many of whom had already spent a significant amount of time and money to register and travel to New York for its cancellation.

“For the New York Road Runners Club, the cancellation has sparked a crisis unlike anything in the history of the marathon. The club now has about $60 million a year in annual revenue, but it operates with little cushion. The Club doesn’t have enough money to refund all the investments made in the race by runners, sponsors, broadcasters and the travel partners who arranged trips for foreign participants, said an official familiar with the organization’s finances.[1]

In June 2014—more than 18-months after the cancellation, Club received $15 million from its insurers, which lowered their loss to $3.8 million.

The New York Road Runners Club survived Superstorm Sandy. Could your organization survive the cancellation of its major non-membership fee source of revenue?

Event and Speaker Cancellation Insurance

A cancelled conference or the non-appearance of a keynote speaker can be severe and it can take years for an association to recover from the impact, like it did for the organizers of the New York City Marathon. Cancellation almost bankrupted the New York Road Runner Club.

If your organization’s sustainability depends on the success of its organized meetings or events that feature a well-known speaker, then an investment in event cancellation and/or non-appearance insurance may be prudent.

Types of Insurance

I hope that your association has both Commerical General Insurance (CGL)—with event liability coverage—and Directors & Officers (D&O) liability insurance. If you do not have both, then please read on our article Insurance: What Event Planners Need to Consider When Organizing an Association Event.

“Contingency insurance relates to the insurance of unpredictable, catastrophic losses. This is a specialty niche which is for one-time events or unique ventures which may never occur but if they did there could be a considerable cost.” [2]

Event and speaker cancellation insurance provides protection for risks that are “beyond your control”, for example, cancellation of the New York City Marathon, by the Mayor, less than 48 hours before the time of the starter’s pistol.

The risks your association can insure against include: cancellation, interruption, relocation, reduced attendance, or postponement.

Insurance against the non-appearance of a speaker can be included in this coverage or it can be purchased alone. Hint: the cost of non-appearance insurance, for keynote speakers, decreases as the length of time your speaker arrives in-advance of his/her speaking time increases—at a minimum try to allow for your speaker to be able to miss one flight connection and still arrive on-time for your event.

The application form for non-appearance will also ask questions about person’s “history of non-appearance” and his/her medicate condition.

The following are examples of some of the risks, which are beyond your control that you can insure against:

  • Damage or inability to use the event’s venues (e.g. conference centre and/or hotel), if it is not possible to relocate. For example, fire, power failure (remember Ontario’s 2003 blackout) or even a labour strike.
  • Cancellation or reduction in airline services (think: weather, strike or a volcano eruption in Iceland).
  • Communicable diseases (e.g. today’s ZIKA or the SARS virus in 2003).Fear of an epidemic, whether real or imagined, can reduce attendance. It is likely that few of the athletes who have invested many years of training will not compete however, attendance may decrease, as airlines are offering free refunds or rebooking for pregnant women and their companions in response to growing concerns over travel to countries like Brazil affected by the mosquito-borne Zika virus.
  • Death or illness of your keynote speaker.

The best time to speak to your insurance broker about event cancellation and speaker-not-in-appearance insurance is at least three to four weeks before you make any commitments for an event. This is because these policies are unlike off the rack CGL and D&O insurance; instead the terms and conditions of your insurance coverage will be tailor-made based upon your needs.

Premiums for event cancellation insurance typically are 1.5% to 2.5% of your event’s revenue, with a minimum premium of approximately $1,500.

Even if your organization is not going to consider purchasing event cancellation and/or non-appearance insurance, you might want to ask your insurance broker to provide you with the application forms, as the questions may help you in your planning.

When planning an event we all hope for the best and with insurance policies that are tailor-made for your needs, your organization can be better prepared for the worst.

[1] Wall Street Journal, December 2, 2012.


The above article is provided for informational purposes only. It constitutes general information; it does not constitute professional advice related to insurance, and you may not rely on it as such.