Source: Robin Roth, Senior Contracts Editor & Jim Doherty, Account Executive, Conferon, Inc.
E-Specs: October 15, 2001

If your group depends on the revenue generated from your convention, money lost because of a blizzard on your main arrival day, or other unforeseen circumstance, can have an unpleasant effect on your group’s bottom line. You can protect your revenue by purchasing event cancellation insurance. This insurance is reasonably priced relative to your potential loss and is coverage over and above your general liability insurance. General liability insurance protects against personal injury or property damage whereas event cancellation insurance protects against loss of revenue or expenses.

In light of the recent acts of terrorism, many insurance companies are rewriting their policies and the outcome is yet to be seen. Event cancellation insurance as currently defined is all-risk coverage for the loss of revenue or expenses due to a cancellation, curtailment, postponement or abandonment of an event. It covers only circumstances out of control of the organization and although it covers reduction in attendance (attrition), coverage would not apply for reasons such as improper planning, economic downturns and lack of support of the program. These and other exclusions should be carefully examined and understood. It is possible that terrorism may be considered an exclusion in the newly written policies.

The best time to buy the insurance is as soon as the contract is signed. The closer your purchase is to the meeting, the more likely it is that an existing circumstance such as an airline strike would be listed as an exclusion. Generally, the policy must be purchased at least 30 days prior to arrival. The cost is determined primarily by your estimated revenue and may be approximately .03% of that figure. Another cost factor is location and dates of the meeting. A premium will cost more for a meeting in Florida in September (beginning of hurricane season) than for a meeting in Indianapolis in August. Protection will apply to either your estimated revenue or your expenses whichever is greater.

You will be best protected for all circumstances if your total insurance coverage includes general liability insurance, directors’ and officers’ liability insurance and event cancellation insurance. If you are looking for competitive pricing for event cancellation insurance, a good place to start is to talk to your existing insurance provider or visit this website: http://www.asaenet.org/services/detail/1,1763,7,00.html?searchtext=SW5zdXJhbmNlIFByb2dyYW0=

(Note: This information is not intended to be "legal advice." A qualified attorney should be consulted to review all contract issues.)