Look both ways before you cross the street. Don’t run with scissors. Wash your hands before dinner. Think before you speak. From an early age, children learn to take precautions for just about everything, but this skill seems to be forgotten when adults start to organise events.
In North America and Europe, standards for health and safety and requirements for insurance are a given. Insurance is a “must have” for any event, especially in a world where people are more likely to sue and claim damages. In Asia, however, insurance is still a fairly unregulated area.
For companies organising events, it is crucial to understand what can be covered and what cannot. This means breaking down the different aspects of the event – venue, travel, activities, personal health insurance, supplier insurance, legal liabilities of all parties – and predicting what could go wrong with each element.
Chris Burke, director of operations at Jack Morton Worldwide in Hong Kong says that as an organisation, Jack Morton Worldwide (JMW) “doesn’t do an event without insurance”. He explains that the Asia arm of the business takes its cue from the US, which is much stricter than most companies in the region.
“We need to have a policy that protects us and our staff, as well as the event we are putting on for the client.” He adds that all of the suppliers they work with also need to have their own insurance or they don’t work with Jack Morton. That can be a tall order when dealing with an audiovisual company at a resort in Vietnam, but it is essential to “protect everyone from an accident or unforeseen incident of any kind”.
Brian Kirsch, MD of Event Assured, a UK-based insurance broker that works for clients all over the world, adds that there are many groups over the firm’s 20-year history that have been more than thankful they had insurance.
Because there are no formal insurance requirements in 90 percent of the countries in Asia, “there is no standard anyone works to,” says Burke. “With so many approaches, it’s better to take your own approach as a business.”
What’s the risk?
But, before the horror stories, the first thing to note about event insurance is that most events are not going to raise any major red flags. “The standard event is not high risk,” says Burke. “You are bringing people to a safe, secure venue, which has its own health and safety or insurance policy, emergency planning… all of that. You have speakers on stage addressing an audience and that’s the scope of the event.
“Adding in factors like artists flying on trapezes, pyrotechnics, alcohol, outdoor events that include water sports; those are things that are seen as risky by an insurance company.”
Outdoor events are subject to finicky weather patterns; events built around a key speaker may be cancelled if that one person cannot show up on the day; alcohol makes accidents more likely; and if the destination is going through a particularly difficult period politically or has seen terrorist activity recently, then this will push up premiums. These potential problems can be covered, but companies should expect to pay more. But says Burke: “Be careful about special kinds of insurance because most policies include a clause that excludes things deemed an ‘act of God’.”
That said, for a price, terrorism coverage is available, ranging from simple “attack” cover through “threat” cover, even as far as protection against the closure of air space by authorities. “It is expensive, but you can get it if that’s an issue you might run into,” says Kirsch.
There are sometimes aspects of an event that simply cannot be covered. An event cancellation due to the H1N1 outbreak may be one. Many local insurers cannot cover water sports or activities on watercrafts, though Kirsch says that most of those activities can be covered at a cost in other jurisdictions.
What to look for
Whether working with a local insurer or a centralised conglomerate based in the US or the UK, it is advisable to run a thorough check on the company, including their experience covering events as well as their underwriters.
There are particular hurdles in Asia as well. For instance, says Kirsch, “it is illegal for an insurer outside of China to directly insure risk in the country because of state control of insurance”.
In the case of China, local firms must be used. But, he says, frequently in those situations “it gets re-insured back to Lloyd’s in the UK. The underwriting expertise doesn’t always reside locally, so you find someone there, and more often than not, it finds its way back to the Lloyd’s market by way of reinsurance.”
Whatever the policy and whichever company is covering it, companies should not assume that any component of the event is covered unless it is explicitly stated in the contract. Poring over each and every page of an insurance document is critical.
As for price, the location of the event can affect the cost of insurance. In Asia, tsunami or typhoon-prone areas see a higher premium for disaster coverage, while in Japan the threat of earthquakes is always taken into account. As a benchmark, insurance may cost about 1 percent of the overall budget of the event, though experts note this is a very fluid figure and can increase quickly with the addition of extra covers.
Outside of event insurance itself, planners should always check with third-party suppliers, all of which need to have their own insurance. “It is advisable to go over their policies,” says Kirsch. “Not just their insurance but checking that they are managing their own risk to a level appropriate to the activity you are engaging in.”
This includes transportation carriers, AV providers, caterers, the venue, entertainers, activity organisers, and anyone else that will be working on the event or is involved in bringing it all together. For those who do not have an acceptable level of insurance, nine times out of 10, says Burke, JMW can get it for them.
With the event covered, the company and the participants themselves should be aware of the liabilities they could face in the event of a problem. The event organiser will generally not take care of policies outside of their own costs and the liabilities of the event itself.
“Both the organiser and the corporate client have an interest in proceeding with the event as planned,” says Kirsch, “but if you are organising an event and someone gets injured, whoever is holding the event can be legally liable. Companies should not leave this to the organiser because each is a separate legal entity, so both need to have their own legal liability insurance.”
While corporate offsite events, retreats, galas, conferences and seminars are all excellent opportunities for employees to enjoy time away from the office, relax and have fun in creative and unique ways, there is always a duty of care that all parties involved should adhere to. Says Kirsch: “You don’t need to go bungee jumping or sky diving to have a good time and reward people for a job well done.”
Event planners have a particular responsibility to make sure that their staff, the event itself, and those onsite will be cared for if something unforeseen happens. Likewise, the company hosting the event and the attendees should look into their responsibilities and their liabilities for travel, accommodation, the event itself and any activities. Events should be fun and there is no reason not to get creative, just make sure it’s insured.
Why you need insurance?
Brian Kirsch of Event Assured gives an example of why groups need insurance:
“We covered an event in the Caribbean that was meant to be held on St Kitts in Nevis. The insurance was issued in August. In November, there was a hurricane that damaged quite a bit of the island and the event was slated for January.
“The insurance company agreed to pay the costs to relocate the event to St Thomas. Unfortunately, the runway in St Thomas was too short for the plane that had been chartered from Europe, so a new plane had to be ordered. Come January, the new plane was stuck in snow so another plane had to be arranged. As the group was standing on the tarmac, the pilot said the plane was having technical difficulties and they were going to have to decide whether to fly or not. Obviously the group said ‘why don’t we use another one’; so enter yet another chartered plane.
“There were four claims on one event; costing nearly three-quarters of the total event budget just due to bad weather and airplane technical problems. The underwriters paid all the additional costs.”
THE FINE PRINT
Things the insurance company will not cover for an event:
• Insurance for event cancellation based on things that are an “act of God”
• H1N1 flu or health epidemic-related no-shows or cancellations
• Helicopter travel
• Speculative or trading risks (eg not selling enough tickets to an event)
• In some cases, water sports other than swimming
Things you might be able to cover, but it will cost you:
• Working with animals (eg having an elephant onsite)
• Canopy walking or other special activities
• Golf carts or TGVs
• Terrorism or political coups
• No-show of a person key to the event
Things the company or individual should cover:
• Company liability insurance
• Personal liability insurance for some activities
• Health insurance
• Travel insurance
KNOW THE LINGO
This protects your legal liability to pay for compensation and claimant’s costs and expenses for accidental bodily injury, loss of or damage to property sustained by members of the public and occurring in connection with your event. The cover should be based on the total number of visitors expected to attend the event throughout the whole period of insurance.
This protects your legal liabilities in respect of compensation and claimant’s costs and expenses for accidental bodily injury to anyone you employ at an event, including temporary staff, volunteers, helpers, whether paid or unpaid.
Covers your liability in respect of the accidental loss or damage to event equipment for which you are legally responsible for both at your event and in transit to or from the venue.
Cover in respect of your out-of-pocket expenses incurred as the result of the complete cancellation of the event for reasons beyond your control, including extreme adverse weather conditions that render the event as dangerous for the public to attend. Always read the fine print on this one.