Event Cancellation Insurance: A Basic Guide to Understanding It Well
Imagine that you have everything ready: venue booked, suppliers booked, guests confirmed and even the menu closed. But, suddenly, something happens that changes everything: an unexpected storm, an artist who cannot attend, or even a power cut that prevents you from continuing. And now what? This is where event cancellation insurance comes in.
What is Event Cancellation Insurance?
It is a policy designed to protect organisers, promoters or sponsors against economic losses if an event has to cancelled, postponed, suspended or discontinued for reasons beyond their control. The objective is to recover part or all of the investment when something prevents the event from taking place.
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What types of events can be insured?
This type of insurance applies to a wide variety of events, both private and public:
- Weddings, baptisms and communions
- Concerts, festivals and shows
- Congresses, fairs and seminars
- Sporting events
- Corporate and private celebrations
What does event cancellation insurance cover?
This insurance offers several key coverages that can be tailored to the type of event you wish to protect:
Non-recoverable expenses
Refunds payments already made that cannot be recovered, such as:
- Space rental
- Catering services
- Advertising
- Professional fees
- Payroll and social security
Revenue losses
If the event includes ticket sales or commercial space, the insurance may cover the loss of income due to the cancellation.
Additional costs
When it is necessary to reschedule or relocate the event, the insurance can cover these extra costs.
Salvage costs
In some policies, expenses to minimise damage arising from the unforeseen event are covered, provided they are justified.
In what situations is coverage activated?
The causes that can trigger insurance vary from policy to policy, but these are some of the most common:
- Adverse weather eventssuch as heavy rain, hail, snow or strong winds.
- Non-appearance of key personsas artists, musicians, speakers or leading figures due to illness, accident or death.
- Force majeureThe following are some of the main reasons for this: power failures, structural problems at the venue, transport strikes or social situations such as terrorism or national mourning.
- At weddings and celebrationsThe following are some of the most common reasons: serious illness or death of the bride and groom or immediate family, bankruptcy of suppliers, or unexpected redundancies.
How much does event cancellation insurance cost?
The price of this policy depends on the type of event, its duration, the location, the number of attendees and the level of cover contracted. Therefore, there is no single rate.
It is best to request a personalised study of the specific case. If you have an event underway and would like to protect it, get in touch with us and we will help you find the most suitable solution without obligation.
When should it be contracted?
This insurance must be taken out in advance, as many insurers require a minimum of 15 to 30 days before the date of the event.
The ideal time to take it out is when you start making payments or commitments to suppliers. That way, any subsequent unforeseen events can be covered.
What are the exclusions?
While these policies offer comprehensive protection, they also have some important limitations. They do not usually cover:
- Cancellations by voluntary decision of the organiser
- Lack of funding or public assistance
- Deliberate breach of contract
- Communicable diseases like COVID-19
- Problems due to lack of permits or licences
- Malicious or grossly negligent acts
What if I want to secure a wedding?
In these cases there are specific coverages for weddings, designed to protect this type of celebrations. They cover situations such as serious illness of the bride and groom or close relatives, problems with key suppliers, or adverse weather conditions that prevent the celebration.
It can also cover expenses arising from a rescheduling or total cancellation. If you are organising a wedding and want this peace of mind, we can help you find the insurance that best suits your needs.
Is it compulsory?
It is not required by law, but it is highly recommendedThis is particularly the case when there is a significant investment at stake or when contracts with suppliers require it. It also provides valuable peace of mind for organisers, attendees and sponsors.
Which insurers offer this insurance?
Some of the companies offering event cancellation insurance are:
- MAPFRE: with general multi-risk coverages
- AXA: with a special focus on adverse weather conditions
- Caser: broad options, including force majeure
- Occident: specialising in shows and mass events