By Carol Bressi Cilona
Non-Appearance/Cancellation and Abandonment insurance is likely an underutilized coverage in the entertainment industry and among other types of commercial ventures. But if a claim is triggered and causes a show or event to be cancelled, you’ll be in a better position if this insurance is in place.
Event cancellation insurance is a safety net designed to protect your investment in the appearance of stars, entertainers, performers, dignitaries, artists and public speakers at your show or event.
It’s designed to help recoup expenses and lost revenue if such headliners can’t appear due to illness, accident, death or any cause of delay or postponement. It can also protect events like carnivals, conferences, trade shows and even weddings that are at risk of decreased attendance or revenue, or even outright cancellation due to bad weather or other unforeseen circumstances. Additionally, event cancellation insurance can cover the postponement of tours, concerts or theatrical productions to a later time, with the policy covering extra costs associated with the delay.
Here are some instances where event cancellation insurance came in handy:
- When the star of a Broadway one-man show was unable to perform due to a virus, even though several performances were cancelled, lost revenue and continuing expenses were covered by a non-appearance policy after a performance deductible was met. When the virus recurred and the show was postponed again in the same policy period, producers were reimbursed in full.
- Producers of a musical production purchased a non-appearance policy, which was helpful when the production’s star developed laryngitis. It delayed the show slightly, but the star was able to perform by lip syncing as the music and lyrics were prerecorded. The audience was told and a partial claim was paid.
- A solo concert by a classical musician was cancelled when a major snowstorm prevented the performer from getting to the venue to perform. Event cancellation insurance was in place and paid for the claim.
It’s important to note that non-appearance coverage can be costly, averaging between 2 percent to 4 percent of the budget. The terms will depend on the type of event – for example, terms usually span three to six months for most Broadway shows.
The premium hinges not just on the production’s budget, but also on variables like the nature of the performance, location and even time of year, along with the history, age, level of involvement, and health of the performer. For example,
- A production on a cruise ship off Florida’s coast during hurricane season will have a fairly hefty price tag and must be placed well in advance.
- A single-night show featuring one performer who’s under 70 with a good health history will likely be relatively less expensive.
- A show on tour during the winter in regions prone to snow and inclement weather may also be priced at higher rates.
There may be exclusions and restrictions for non-appearance coverage. Medical histories play a role but pre-conditions are considered. Medical information or statements of health from the insured person are typically required.
Whatever the nature of your show or event, your investments and returns can be at risk due to unpredictable and unforeseen circumstances. Non-appearance insurance may be the best protection you can get.
HUB International’s team of Entertainment Insurance experts are ready to guide you on all the risk considerations that should be factored into planning for any type of show or event.