What is Cancellation & Abandonment Insurance?

Considering the amount of time and money it takes to plan an event, the risks to the bottom line can be substantial. When disaster strikes, Cancellation & Abandonment Insurance can help protect you against the loss of costs and expenses or revenues for a small fraction of that exposure.

Otherwise referred to as Event Cancellation and Non-Appearance Insurance, this insurance aims to protect the organisers from losses incurred through cancellations, abandonment, postponement, interruption or emergency relocation of an event due to uncontrollable circumstances.

The policy can be tailored to protect the costs and revenues associated with an event, such as travel expenses, venue costs, ticket sales, advertising and sponsorship income and more. Often provided in conjunction with the Event Liability Insurance, coverage is available for the following perils:

• Inclement weather
• Natural catastrophe such as earthquake, flood, volcano explosions
• Power failure
• Public transport failure or denial of access
• Strike risks
• Terrorism or threat of terrorism
• The inability of any person(s) to appear at your event e.g. key-note speakers, teams or performers

No matter how well planned an event, there are always uncontrollable circumstances that may arise and force cancellation.

The types of incidents are virtually endless but some claim examples include:

• Adverse Weather: a freak hailstorm caused the cancellation of a speedway event; gale force winds caused a circus tent to collapse, flooding caused a grandstand to sink
• Fire Damage: a fire destroyed an exhibition centre, forest fires caused the cancellation of a football match
• A power supply failure resulted in the shut down of a theatre
• A plane crash killed a pop star resulting in cancellation of tour
• A murder on 4th green caused Police to restrict access to golf course
• An artist was unable to appear at an event as flights were cancelled because of an ash cloud 
• “Do Not Travel” advisory warnings coming into effect

If you are planning a large scale event, whether it be a conference, exhibition, tour or something completely different, you must remember that while attendees may have travel insurance (including cancellation cover) it won’t protect you from the losses you could incur behind the scenes.

As with all insurance policies, they are always subject to the terms and the conditions of your policy, so ensure that you check the suitability of cover for your needs.

It is for this reason that part of your planning process should include reviewing the risks and looking at ways to protect your expenses and potential revenues from the unexpected.

If you believe that this issue is relevant to your business, please feel free to contact Rebecca Fleming, Account Manager of our Travel Industry Division at Gow-Gates Insurance Brokers on (02) 8267 9919 or rfleming@gowates.com.au to discuss your circumstances or to obtain a quotation.

Gow-Gates Insurance Brokers advises that persons should not act on the material contained in this article as the items are of a general nature only and may be misinterpreted. We therefore recommend that advice be sought before acting in these areas.