By collaborating to address the complexities in business events liability insurance, stakeholders can better protect against increasing risks around the world
Recent travel disruptions, including the severe floods that forced Dubai International Airport to halt operations, and the disastrous impact of severe air turbulence on Singapore Airlines and Qatar Airways, have highlighted the growing importance of business event (BE) liability insurance.
Frequent extreme weather due to climate change has been suggested as a possible reason for these occurrences. However, those seeking ways to mitigate risk find a significant gap in available solutions, and BE liability insurance remains a complex issue.
Michael Duck, executive vice president commercial development of Informa Markets and Informa Group explained that all insurance matters are handled directly from their head office in London. The group has a contract with Lloyds of London, which quotes for Informa’s global business every few years, and any claims are processed through the head office.
Duck shared that in the past, Informa made claims for the SARS outbreak (which occurred in Guangdong Province and spread to almost 30 countries, resulting in over 8,000 cases and nearly 1,000 fatalities in 2002) and the 2008 Mumbai terror attacks (which claimed the lives of more than 150 individuals and injured over 300). However, like many other event companies, Informa could not obtain coverage for the Covid-19 outbreak. Some smaller companies did get coverage, as they had not claimed for SARS.
Daniel Chua, CEO of experiential communications agency Aonia, called for “clear rules” on coverage required by suppliers, clients, and participants as part of a pre-event guide.
Chua, whose company specialises in branding and integrated marketing campaigns for meetings, incentives, and luxury product launches, opined that the mindset on BE liability insurance is “nice to have just in case.”
While shows like IBTM World in Barcelona feature BE liability insurance exhibitors, Chua commented: “There is no such thing as a chief risk officer in BE.”
He continued: “Insuring an entire event is very complex, and there is no guarantee it will be covered. As an organiser of small events, there have been no issues so far, but there are glaring gaps in BE liability insurance.”
Kenny Goh, founder of MICE Neurol, told TTGmice he sees an opportunity to add BE liability insurance as a new service his company can offer.
“Unlike the data available in the motor vehicle insurance industry, the BE industry is not mature. Actuaries, who develop methods to measure risks and analyse trends, do not fully understand the risks faced by the BE industry,” he explained.
Goh added that this is also true for underwriters who use actuarial findings to determine risk and decide if clients qualify for insurance policies. For example, Lloyds of London applies actuarial findings to determine client qualifications, but a lot of data is required to create these insurance packages.
He continued: “Insurance companies do not know what to cover and what event organisers want to be insured for. They also lack domain knowledge of BEs, which we possess, and we understand the complexities.”
As a starting point, Goh emphasised the importance of understanding the highs and lows of operational risk assessment when structuring an event, as dimensions of risk vary.
“If the insurance company cannot define the terms, write the policy, and set limits, then it does not know how much to charge. And if there are not many takers, the risk cannot be spread, and the buying fee will be high,” he added.
Goh believes that every organiser will face greater risk due to extreme weather, cybersecurity threats, and technology breakdowns.
“If you cannot define it, you cannot insure against it,” he stated. “The urgency is increasing because the range of problems is expanding.”
He also mentioned that MICE Neurol could provide a BE liability insurance service using generative artificial intelligence, which is relatively low in cost.
He urged industry associations, CVBs, and events stakeholders to take action and get the ball rolling to help develop comprehensive business event insurance solutions.
