Driven by the economic need to make every live event a unique and memorable customer experience, the increasing cost and complexity of these events is creating a variety of new variables that underscore the need for specialized contingency insurance, according to Take1 Executive Vice President of Business Development Richard Rutkin.
“Live events simply are not what they used to be,” Rutkin emphasized today. “They have become the driving economic force behind a broad swatch of the live event industry from touring entertainment to theatrical events to corporate special events of every kind,” he said today. “And at the center of it all is the desire, and economic need, to make every event a compelling customer experience. These events are what drive the collateral sales of everything related to these events.”
According to Rutkin, B2B live events reached $512 billion in annual spend five years ago, according to market researcher Bizzabo, and have been moving upwards ever since. And, as live events become more complex and expensive to stage, so too do the range of real-world challenges. “Inclement weather, equipment failures, or talent no-shows often saddle organizers with devastating financial losses, a burden that standard property business insurance is not built to bear,” he emphasized.
“Contingency insurance, on the other hand, exists as a possible insurance solution that fills the gaps in coverage, providing for loss of income, loss of expenses already paid, and extra expenses required to reschedule an event as a result of business interruption.”
In short, contingency insurance provides coverage missing or excluded from standard property insurance policies. It can greatly ease the financial burden when an event has to be canceled for reasons outside of the organizer’s control.
“For example, cancellation caused by weather conditions; key performers not reaching the event due to weather, illness, injury, or death; and terrorism or the threat of terrorism can be covered by contingency insurance,” he explained. “These policies can even provide for the extra expenses incurred to rectify the cause of cancellation, change of venue and change of event date.”
Such benefits are surprisingly not new to the insurance market. As a concept, they have been around almost as long as modern insurance itself has. However, it’s been relatively low on the industry radar until recently, as the live-event sector has exploded.
“For the longest time, even insurance agents and brokers were frequently not sufficiently aware of exactly how critical contingency insurance can be,” Rutkin concluded. “Not until this critical point in the industry, with live events becoming more viable and consequently more complex, has the point been properly driven home.”
And if the numbers are any indicator, contingency insurance is bound to continue the upward trend. The U.S. Bureau of Labor Statistics predicts that employment of meeting, convention, and event planners —a key indicator of the entire sector — is projected to grow 11 percent from 2016 to 2026, faster than the average for all occupations.
You can learn more about contingency insurance here.