Why promoters need to consider event cancellation insurance

Speaker A: Welcome to the Insurance Post podcast. I'm Imran Hughes, editor of Insurance Post and today's podcast will explore why event promoters need to take event cancellation insurance seriously and how the market has evolved in the wake of recent disruptions. From M extreme weather to artist no shows and the lasting impact of COVID 19 event organisers are facing a growing range of risks that can derail even the most carefully planned occasions. Joining me to discuss this topic are Gary Brooks, client director at srg, Freddie Sparrow, co founder of Vento and Steve Jones, senior adjuster, uh, at Spotlight Claims. Hi Gary, Freddie and Steve, welcome to the Insurance Post podcast.

Speaker B: Hello Emma.

Speaker C: Hi.

Speaker A: So Gary, I'll come to you first. What lessons have insurers and promoters learned from high profile event cancellations in recent years?

Speaker B: Well, yeah, it's a good question and you know, it's always a challenge, especially in respect of insurers answering sort of on their behalf about what they've learned. If you count recent years as in post pandemic, there's been a pretty consistent sort of risk profile in terms of festivals, promoters and festival and things like that. It's still the mainstays in terms of weather, um, contractor failure potentially, um, that are the main risks. I mean there's been an element of, for want of a better way of putting it, shrinkflation in terms of the things that are covered on the standard event cancellation insurance policy have become a bit more defined and in defining it the COVID has been a bit more narrow and so still the mainstay is weather and that's often what the pre cover conversations are about. That's what the considerations are. There's more of an emphasis now to get the proper risk information beforehand. Um, in terms of weather management plans and not just rain, not just wind, but a little bit more now heat as well. Um, so it's still the primary conversation when you're looking at an event promoter. Uh, we're not talking about non appearance here yet. There are a number of things that's, that's, you know, it's a more multi layered subject when you're adding in non appearance for a headline show and what considerations they have there a lot to do with um, medical and stuff like that. Um, in terms of uh, promoters, I mean really with promoters there's two types of event organisers, promoters from an insurance point of view, cancellation insurance point of view and they're the people that have had an issue in the past and they become really good intelligent buyers and there are people that haven't had an issue in the past. And that's where, you know, much of the work is to try and educate them on what potentially could go wrong and the importance of cancellation insurance.

Speaker A: I mean, Freddie, would you agree that those are kind of some of the lessons and also, I mean it seems a long time ago since the pand, but obviously there was also, you know, um, kind of contractors, etc. There's been a lot of change in that space as well over the last, um, six years. Would you say those are kind of the main lessons? And how have you seen them kind of translate into kind of meaningful changes in how risks are assessed and priced in 2026?

Speaker C: Well, I think I come from it from a quite an interesting standpoint that I used to be a promoter myself and ran a 5,000 person music festival. So I kind of pre. Covid. I was a buyer. Well, kind of buyer in the sense that. I guess I was a typical promoter in the sense that uh, I didn't really see the value in event cancellation insurance. I might have bought it once or twice. But, um, you know, promoters and event organizers are by nature big risk takers. And the reality is Covid hit them all, cancelled every event in the world. Um, have they changed and learned any lessons since? I am skeptical. I think that, uh, actually they sort of think that was a one in 100 year event. It was a freak event. And actually the biggest risk to their event is not selling tickets, which they're kind of taking those risks anyway, significantly. So I think they kind of factor it in. I think I started Vento thinking there was going to be a huge influx of people changing their mentality around mismanagement. I'm not convinced that they have hugely changed. I think that they. Yeah, like I say, uh, our risk takers. Gary makes a good point. You do split the ones that have had an issue and those that haven't had an issue. But in terms of. But of course the lessons still need to be learned. I don't know. I think people, uh, have kind of compartment. I was talking to a client this morning. You know, they kind of. I was like, have you really changed since then? You know, one of our big clients. I kind of just blocked that off in terms of what happened and I put it in a box and kind of moved on. If you're worrying about pandemic every morning, you probably shouldn't be running an event. So, um. Ah, but just, just in terms of the, the other lessons, I think, um, insurers. Yeah, Gary made a good point. You know, it has. The terms and conditions have Tightened a bit. You know, there is an argument to say that the market was hardening anyway after, uh, the state of the market in the, after hurricane, all those hurricanes and then the pandemic hit. And so arguably the pricing in the terms of conditions were going to tighten significantly anyway due to the contraction of capacity. But, um, the fact that something came out of nowhere and I think a key lesson could be that was the intention with the communicable disease extension, was the intention to offer global pandemic cover? Um, different insurers will say different things. Um, but if the intention wasn't to offer that, then there needs to be clearly constructed language around, you know, some sort of local outbreak of disease rather than global pandemics, so that you don't open yourselves up, so they don't open themselves up to the systemic nature of a pandemic. Um, so I think, yeah, it was probably a timely reminder in a changing market that actually it's really, really take real focus on what you're trying to cover and what you're trying not to cover so that there's not any surprises at the claim time.

Speaker A: Things can come along. What was it? Not just pandemics, but, you know, extreme weather, etc. I mean, Gary, Freddie touched on it's. I mean, it's a common complaint in all of insurance. Is it? Most people are like, don't want to think that they're ever going to have to claim on it, so you certainly don't want to buy it. Um, but what are your thoughts on what the shed.

Speaker B: Over the past few years, in this recent period, there's been more competition, there's been more brokers, um, getting involved in this space. And the net effect of that is there's more things like this, there's more people talking about it, there's more marketing. And so, you know, organizers, promoters, the wider industry are more aware of this product than they ever have been. Certainly, um, you have more promoters relying on ticketing firms who themselves are requiring cancellation insurance as well. So with those sorts of trends, you should be seeing an increased sort of purchase rate. But there's a significant sort of, sort of situation, uh, that works against that and that is the increased costs that promoters are, uh, experiencing. And it is a discretionary purchase. You've got to have staging, you've got to have security, you've got to have all of those suppliers involved to make the event happen. And for some people, cancellation is discretionary purchase. And that's why it makes it even more acute that there are those two different types of People, people who had an issue and understand what it's about and those who still are seeing it at the bottom of their P and L wondering whether or not they'll have enough profit to cover that discretionary purchase.

Speaker A: And it's whether. Well, and on that note, I mean in terms of whether it should be a discretionary purpose, it's a good time to turn to claims. And basically when people often that's when they see the real value. I mean Steve, as an adjuster, uh, what trends are you seeing in the types of claims being made in the current climate? And are you seeing claims becoming more complex or more frequent these days?

Speaker D: I wouldn't say that they're becoming more complex. I think they're becoming more frequent. Um, uh, as the reasons for people making claims is extending and widening, um, perhaps in terms of complexity, um, the number of endorsements that people are having to um, take on because they get a basic insurance package and then they have to pull in these other things, um, to make sure they're covering the kind of event that they're dealing with. What I'm really noticing is that uh, funnily enough, I don't tend to deal with the um, festival organizers that don't take out insurance. I tend to.

Speaker A: No, um, you're only with the wise ones who do exactly.

Speaker D: Um, and they have certainly learning about preparation in advance and um, managing information and uh, documenting stuff, um, and tracking all of that kind of thing that is very important to them. So I think that's the sort of thing that I'm seeing uh, promoters uh, undertaking in a much more efficient way. Because, um, when they first get a claim and they have no idea what they're dealing with, they get a number of shocks and we have to handhold them through that alongside brokers, but they do get shocks. And um, that has a very strong influence on how they deal with claims in the future and how they plan and prepare for claims for events.

Speaker A: I mean Freddie, that leads on that kind of links back into what you were saying about how you started your career as a promoter and kind of the mindset. Do you think that people who've benefited from this type of COVID it does help them see that you may be caught up in the initial excitement of you're putting on a major. Surely nothing can ever go wrong. But a lot of the value of insurance is it's that pre prep, it's knowing what could go wrong, etc. Is there a mindset shift slowly taking place in this area?

Speaker C: Yeah, I think the mind ship mindset uh shift happens when you get to a certain size of organizer I think you know the smaller you are uh, maybe the lower margins you have. It really is a discretionary purchase but once it, once you get to a certain size and it's probably difficult to exactly cap that but you know then an element of professionality really comes in. Uh, at that stage it's becoming a uh, sort of uh, a business which is for the long term and less, less of a hobby And I think insurance kind of is used as a very central pillar to your, to what you do because you've got millions of pounds on the line and you know you've got investors board whatever answerable to if you haven't gone and bought even just the basic level of event cancellation insurance covering your with, with weather cover. I think there's an element of quite significant negligence there. And so uh, you know and I, I, so I'd say and I don't think, I mean Gary's been around in the game longer than me might be able to comment but I'm not sure that Covid or the recent events have been that move that mind. Uh, I think it just comes at a certain level of your journey and some people are more got a bigger risk appetite earlier on and they go for it.

Speaker A: Sorry, um, Steve, what did you think of?

Speaker D: Well I'm just picking up on that. I think that promoters that are dealing with many events rather than just one offs they know that they're going to get a claim so it becomes much more obvious for them to take out insurance because it's going to happen at some point. Um, it's the people that are dealing with one or two um, events that may think that they can risk it.

Speaker A: I mean on that note, I mean Gary you touched on at the start it's not just Covid, it's inflation and the cost of putting on an event and the various logistics becoming so much more complex in recent years. Uh how would you say the breadth and depth of the COVID itself has changed in recent years to reflect you know uh. I'd say the greater complexity perhaps of even those as um, um Freddie touched on. Smaller events now aren't as simple to put on as perhaps they were a decade ago.

Speaker B: And one of the most significant changes was the fact that the wording changed from beyond the control of the event organiser to be on the control of the event organiser and all the participants or contractors or however it uh is defined. That's a really, really significant change that drastically reduced the scope of circumstances that would be covered and there was no difference to rate at that time. Rather obviously if you wanted your original or the original wider scope of COVID you would have to pay more, which is the case right now. So you know, that's where real sort of specialists like us, uh, there's a fundamental difference between the advice that we're giving as opposed to general commercial brokers who have access to these sorts of online systems, etc. For somebody to end up in a situation just probably for 15% less of costs to have that really narrow version of COVID um, they probably wouldn't got the right advice about it and probably the event organiser themselves wouldn't be aware that that fundamental difference is at play. So that's a really significant change. Um, the cyber situation that resulted in an exclusion and this limited computer system failure endorsement that uh, I think you have two or three options for largely untested, um, these efforts to more define the COVID obviously end up in the COVID being a bit more narrow. And my concern is that it is largely untested. The cyber thing, the computer system failure thing, the deadly weapon thing with terrorism. Just to explain that terrorism is terrorism and if it's not terrorism, it's not excluded. But then now there are conversations about what deadly weapon is, is it, is it, is it not? Well it's not unless it's terrorism. For me it's really clear cut but there are wordings and endorsements to do with that. Seems that on these efforts to sort of reduce ambiguity or introducing new ambiguity M and those sorts of things. So you know, that's a summary of, from my perspective, some of the changes that have taken place recently. Um, and do fill you with a bit of anxiety because nothing, you don't know how anything's working until it's actually tested, until there's precedent.

Speaker A: No. And often with these sorts of events it can seem like this, but I mean because um, this year we've had um, the fallout from the um, Kanye West Wireless festival as well. And you know, people would not have thought 20 years about uh, go about kind of artist related risks in terms of reputation etc. There are so many different types of risks now with, as you touched on, cyber, et cetera, the way that um, these events are sold, marketed, um, promoted, et cetera. Do you think that, you know, it's more important than ever for brokers to kind of engage with the promoters themselves to really understand the nature of the event? Because as you touched on, there is a risk that based on what you're saying, event Cancellation insurance can be very different and, um, will very much need to be kind of tailored for the individual event that you're dealing with.

Speaker B: Yeah, you're normally having a conversation about public liability and equipment, etc. You preface everything with that and you get that all sorted and then you try and make sure that there's a gear change in how you're talking to them about event cancellation insurance, at least to let the client know that it's an entirely different way of doing things. It's completely tailored to the conversation that you're about to have. Um, and it is a challenge to get the time, uh, from the promoters. It's a challenge to get that time. And, you know, a simple sentence I say to the promoters is, you're just transferring all of the financial risk for a cancellation onto another company. So it's quite right that they probably have just a few questions about what that risk is.

Speaker A: Yes, yes. Yeah, they need to understand it. Yeah.

Speaker B: You know, even the most seasoned promoter, that sort of clarification really helps. Uh, and you find things take a different pace after that, after they've, um, you just clarified to them exactly what risk transfer is.

Speaker A: I mean, Freddie, from your experience of being the promoter to kind of now, um, in the insurance industry, do you feel, um, that. What do you feel are the notable exclusions or gaps, um, in a lot of this type of insurance? And do you feel the market is now offering the level of protection that promoters need in this space in 2026, given the risks that they face?

Speaker C: Yeah, well, it's an interesting one because Covid kind of came at a time when the market was hardening, uh, anyway, that cancelled every single event in the world. Then suddenly you've got a situation where the coverage was as narrow as it's ever been because they're excluding as much, much as they could. The insurers, arguably, rightly, because they were offering the capacity and a price that was higher than has ever been seen, two or three times the price as it was. So it's not always an easy message as a broker, uh, going to a customer saying, right, okay, well, here's your options, but these are the prices. And moving on to the options, the way that the policy works is everything's covered unless it's not covered. Um, but, you know, you send a list through of everything that's not covered. It could be quite exhaustive if you, if you, you know, and so then when the question comes through, well, what am I actually covered here for? And then you can go through and say, well, Actually you can buy back certain exclusions for an extra price. But in terms of where do I think, uh, uh, are the real gaps? Well, the one that is never as far as I can see, going to get covered as financial failure. You know, if, if, if you don't sell enough tickets or you're, that's not, that's not going to be covered. Or if you go bust as a company, that's not going to be covered. If somebody in the supply chain fails financially, that's also not going to, not going to be covered. And I think that's something which is um, potentially leaves them exposed. You've got war, which is obviously a big scenario at the moment. Typically excluded. You know, there is some cover out there, but again it's either pretty expensive or it's very, very, very narrow. And then you're sort of questioning whether, whether, whether you buy it. Gary touched on the cyber. Yeah, there's some parts out there, the computer system failure, very narrow cover. There's some cyber cover which is sort of, if, if there's a malicious attack which could actually impact the event that's, you know, currently excluded from a typical policy. You can get some cover, but again it doesn't come cheap. So uh, I think the reality is, is you can get the COVID that you need, but the problem is, is it's operating within the, you know, there is cover for communicable disease out there at the moment, but, but it's expensive, you know, and so people are sort of thinking, is it going to happen again now at that price? No. Thanks. So I think the answer to your question is yes, I think there is um, suitable cover out there. But it all comes with a sort of menu of prices which can become in a time when their budget's getting squeezed, luckily the market is softening, so prices are coming down. Saying to customers, actually the one budget item you know, like, for, like this should be going down this year is insurance. Unlike pretty much everything else.

Speaker A: Yeah, I mean you kind of beautifully conveyed that. You know, there are real challenges in basically making m sure cover is comprehensive while keeping it affordable. I mean Gary, what were your thoughts on that?

Speaker B: Well, yeah, excess is um, always like clearly defined and it's great to talk to a client when you're proposing cancellation insurance to him saying, well, it's a sudden, unforeseen, seen beyond your control. Generally it's insured unless it's any one of these, what used to be 12, now 20, whatever things that are listed at the back of the policy. So it's good to define that. But one of the things um, again I think the growth of these has been a bit slowed uh by the so called soft market. But excesses and the imposition of excesses, it's just not, they're not a good thing at all and they're not a good option for a festival promoter or organizer because yeah you can think of the excess in the context as you normally do with other insurances but here uh, they completely negate a certain, a fundamental type of COVID which is additional costs to help stop a cancellation. So a lot of claims are helping uh, the organizers go ahead as proceed as intended and if they've got an excess and that completely carves out that option, uh, and again you know, as long as the client knows that they're walking into that and that's what they, you know that's what they're choosing to do. But sometimes I see clients carrying an excess and not really considering that they're doing away with that fundamental part of the COVID which is just any additional cost to help them go ahead in the days weeks before.

Speaker A: I mean Steve as um was touched on there, claims are vital. You're stepping in at the time that things go wrong. How, how you know and obviously do you occasionally get policyholders? Um, obviously then having, you're having to kind of explain that excess issue. And as a bigger question I suppose how are you making sure at that point things are going as smoothly as possible and you really are stepping in to save the day?

Speaker D: Well um, my experience of excesses is that they tend to be um, more in theater runs and where there's daily performances and they have excesses which are you don't get the first day and that sort of thing. Uh, um, less experience. Um financial excesses on large shows. But that may be that I've just not come across those. Um, we tend to hold the hand of the um promoters from the very start. We often get involved before a claim, um, certainly whether there's weather, um related events happening, um, to assist them in making decisions about whether they're going to cancel. And that involves helping them understand the policy, renewing what they've already been told by the broker so they understand where they're covered and where they're not and how that will impact on the decision making. Um and um, it is interesting how that decision making can be impacted by how um successful that particular show is looking to be. Are they slightly more inclined to cancel? Um and um, look at the weather um, if the show's not doing as well um but yes we will hold the hands of them and help them understand exactly what they need to do, what information they need to provide, what um, how they need to track information in real time, particularly on weather related events. So there you go.

Speaker A: And health related events as well. Because there was a festival that I was supposed to be going to last summer and the headline act had to pull, literally pulled out the day before because of ill health. So how do you get involved in those sorts of scenarios as well? Because it's not just the weather is it? Especially with perhaps this is, this is a sign of my own musical taste. Perhaps older artists that um, are uh, booked ahead line acts and they can have one fall and is it yellow? It was a yellow. Well guess and ironically I was at Stevie Wonder the day before and was getting the notification on my app saying it was now cancelled and what was supposed to be their last ever um concert was now not happening. But how do you manage when it's health related?

Speaker D: It is an increasing issue because our artists ah are getting older aren't they? And uh, there's a lot of performances of old acts if you will. Um and so it's an increasing issue, uh we're dealing with it after the event and we're looking at ah, we have to get medical information. This is where I think the promoters have um, a real issue because it's very difficult for them to get true information about medical history of artists. Uh, it's difficult to answer that information and get a true feel for it. Um but there's a lot of information out there on social media um showing people um, it's very easy to find out um, what has happened um in the past with artists. Um we will often involve a um, medical Insurance, M. Um Dr. To assist with that process. Um you have to get an artist to sign off on that. They often don't want to do that. Uh if the artist is not financially um in a difficult situation but the promoter is then they are less inclined to um, assist with that sort of thing. So it can be very complicated.

Speaker A: Definitely. Sorry Freddie, what was your view on that?

Speaker C: Yeah, well I was just going to say I think the market is softening to a certain extent with sort of in terms of non appearance cover. Something called ACO or assured control cover is kind of coming back whereby uh, I mean I think it was available all the way through but in terms of coming back at a more reasonable price whereby you know if an artist cancels kind of for any reason the promoters covered and kind of pre existing health or health or whatever, it doesn't really matter if they don't turn up, the claim is getting paid. And that is the sort of gold standard of non appearance cover which uh, yeah certainly we're trying to push people at least giving them the option so they know that the sort of more wide ranging option is there.

Speaker B: There were um, ACO options out there for Kanye West. Yeah there were, there were, yeah. I won't say where and uh, what the rate was but um, yeah, you know I said so called soft market. You wouldn't have that if there wasn't that sort of endeavour out there in the market.

Speaker A: Definitely. I mean which you've all touched on slightly. But obviously beyond the point of claim, beyond the point of arranging risk management support is clearly so vital from the industry um, for um, promoters I mean Gary, what kind of risk management support do um, promoters get these days?

Speaker B: Well a lot of them you're dealing with uh, the safety advisory group process. So a lot of the things that we would want them to do or to communicate they're already being asked for. And again especially with Martin's law, which I think is law now almost maybe. But um, there are a number of things when an event of a certain size where they have to do a safety advisory group and all the rest of it that they would have done these processes. And so sometimes the information that we want to see is there risk um, management. Well again if you come back to the fundamental risk of weather. Yeah we have a lot of the risk management services that brokers in this space have, are uh, to do with injury and damage and these sorts of things. And it's an important, you know, it's an interesting point. What is there out there for somebody who wants to promote a better risk from an event cancellation point of view? Well uh, you know it really is the responsibility of us as advisors to use our sort of experience on what we know that insurers want to see, what they want to happen. And these weather management plans I keep coming back to really important. But for them to cover obviously just not just rain and wind and heat and all the rest of it. Yeah the industry in terms of health and safety advisors and all the rest of it are so uh, tied up with Martin's Law and people marketing, uh, these health and safety advisors marketing themselves to promoters as the one stop solution for this impending regulation. All the rest of it.

Speaker C: Sure.

Speaker B: How much uh, cancellation gets a looking in that space at this point in

Speaker A: time, it's just a shame. I mean we could talk about this topic for ages. Especially as we're on the brink of summer as well at this point and looking forward to lots of um, large scale events. Um, to each of you. If I ask you to kind of finish, what emerging risks should event organisers have on their radar? Uh, um, for summer 2026 and how should, you know, what should they be concerned about and how should they be engaging with insurance to address that? Freddie, if I come to you first.

Speaker C: Sure. So I think yeah, we'll have to probably be careful to share them around a bit otherwise.

Speaker A: Just the one.

Speaker C: Yeah, I mean, look, look, I think the one that we're certainly talking to clients a lot about at the moment is potential fuel shortages that might be coming as a result of the war. It has the potential to be a real coverage nightmare in terms of uh, is the proximate cause war and thus it's excluded. Um, I think the sensible thing would be to do. Well, the thing you need to do is act as though you don't have any insurance in place of course, anyway. And so to try and mitigate the risk as much as possible, get fuel early. Uh, is that going to help you with, with, with the prices? But it's going to mean that potentially your show can definitely go ahead. We don't know where this is going so um, you know, I, I think it would be dangerous to try and rely on insurance in, in that, that moment.

Speaker A: Um, so think ahead, monitor the situation and have a plan for it. Seems to be, um. Steve, I mean what, what's, what what's your anticipation of?

Speaker D: Um, well, not necessarily summer related but certainly emerging risks. I think to pick up on what's already been said earlier is cyber. One of my other hats is doing cyber bi insurance and so I see a lot of it, um, and I have dealt with claims that are related to um, ticketing systems going down. Um, uh, and I think that it's emerging right the way across all markets and it's going to hit this industry um, at some point.

Speaker A: Definitely. And on that note, the number of festivals or large scale concerts you go to now where it's entirely on your phone and if those systems there's an outage, how are you verifying people in and out? And it's just so many cyber risks these days, um, with many industries but especially events. Gary, last word to you. What, what should be on people's risk radar for this summer?

Speaker B: Well, um, some notes I made beforehand when I was considering this and the one thing that comes through is you've got to stay ahead of the Media, you've got to. Because once, you know, you go back to January 2020 with COVID Israel, Palestine ended up in an exclusion. And you talk. Freddie talks about fuel shortages as well. And you can just imagine that somebody somewhere is penning an exclusion for that as well. Just to.

Speaker C: Does that mean it's already covered, though? You know, if they put an exclusion.

Speaker D: Well, exactly.

Speaker C: Just to get covered.

Speaker B: Yeah. Get rid of the ambiguous. Take a sledgehammer.

Speaker A: Yeah, yeah.

Speaker B: So, you know, if. And you have clients, and we did, we had an artist ring up last week about their tour across Europe and what about the fuel shortages and whatever. And if it gets to that point is you're, uh, an artist promoter, whatever, and you're seeing something in the media and, you know, skipping a few chapters. If cover's available, it needs to be something that your advisor and yourself, you need to have the gumption to just lock in place. Because if it's in the media, then you can bet your bottom dollar it'll turn into probably an exclusion at some point. Um, if not already a known event, I guess. Yeah, well, yeah, a known event. There are all sorts of. There are all sorts of issues that can come from that. But I mean, the primary one is obviously an underwriter would sit there and, uh, peer review and all that. They wouldn't want to be in a situation where they'd written cover for something that was so obviously a risk.

Speaker A: Yeah, inevitable. Yeah, yeah.

Speaker B: So stay ahead of the media. If something is emerging as a known risk, uh, then try and lock it in if covers available and unpick how

Speaker A: it would impact your event going ahead, basically. Um, thank you. Um, I'd like to thank Gary, Freddie and Steve joining us and sharing their insight today on event cancellation insurance. As always, thanks to you for listening to the Insurance Post podcast. If you enjoy our show, please rate and review us on Apple Podcasts and make sure you never miss an episode by subscribing to Insurance Post and following us on Facebook, LinkedIn in Andex. This is the last episode of the current season of the Insurance Post podcast. But never fear, we'll be back later this year with more debates about what's going on in the insurance industry. Until then, this is Emran Hughes signing off. The Insurance Post podcast is a product of Infopro Digital.