It’s not Event Insurance, it’s Event Cancellation Insurance.

With the 2024 Olympic Games running on schedule, take a look back at the 2020 Olympics which were to be held in Tokyo starting in July. In March 2020, the Games were postponed to 2021. This was better news than a total cancellation for the athletes, the advertisers and the tourism industry of Japan. It was also good news for insurers.

Many insurance professionals are familiar with Event Insurance. It primarily provides general liability, and often liquor liability for an event or series of events. Usually such events are short-term, and can be sporting, parties, fundraising, festivals, conventions, performances, etc. The policy defends against and settles claims of property damage and bodily injury, just as any GL or LL policy would do.

Event Cancellation is a slightly different animal, and is what came into play (pardon the pun) for the Olympics. According to publicly available information, Event Cancellation coverage has been purchased since at least the 2004 Games in Athens. Many other event organizers purchase this specialty insurance, but the 2020 Games may be the most public example of its use.

This type of coverage protects expected revenue or unexpected expenses from the cancellation of an event. Cancellation can be due to a variety of causes, such as:

• weather
• terrorism
• cyber attacks
• labor disputes
• earthquakes
• non-appearance of speaker or performer
• failure of public transport
• damage to venue or infrastructure
• disease
• failure of broadcasting
• power failure
• civil or political unrest

In the case of a cancellation, many event costs do not disappear. For the Games, the costs are in the billions. At the same time, expected revenues do not flow – from sponsors and advertisers, ticket sales, and exhibitors. In addition, new costs arise to administer the cancellation: refunding tickets, advertising, etc. Unearned revenue from tourism likely goes uninsured, but the other investments and loss of revenues are insurable. Moving the 2020 Games to 2021 is estimated to have cost insurers $2 billion.

Many event organizers are familiar with the fact that they need event insurance, if only because the hosting venue requires it. But to provide broader coverage that will protect the organizers’ revenue as well as liability exposures, consider offering event cancellation insurance.