Event Cancellation Not Being Covered by Your Insurance? You Have Options

In such an unpredictable environment, insurance experts say meeting planners might have more leeway than they assume.

Coronavirus and Meetings
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As planners and organizations have had to cancel or postpone events amidst the COVID-19 crisis, many have discovered their insurance policies do not cover cancellations that are necessitated by disease or pandemics. But that does not mean they don’t have options to recover some of their losses, according to a virtual panel discussion on contracts and insurance hosted by the International Congress and Convention Association as part of a webcast on “Global Conversations on Current Challenges,” held March 25. The speakers, from diverse segments of the meetings industry, urged planners to look closely at their contracts, and work with their brokers, venues and other partners to find opportunities they might have overlooked.

“For the vast majority of clients, there are exclusions related to viruses and communicable diseases that are really going to limit your ability to file a claim in these scenarios,” acknowledged Justin Weis, vice president of insurance broker USI Insurance Services. “The good news is there are clients out there who have elected to purchase additional coverage for communicable disease. This would have been purchased as an add-on endorsement for an additional premium and would have needed to be done prior to January.” 

But for those who find they do not have coverage, Weis still recommended that they continue to prepare as if they do. “Gather the information you need, because there is a potential, with government interference, that some of these policies are going to be required to pay,” he said.

Panelist Gregg Talley, owner of Talley Management Group, Inc., which handles more than 35 international associations, agreeing the situation is dynamic and so unprecedented, said the standard rules are likely to shift, meaning broad changes could come to the insurance industry more broadly.  

“This is changing so rapidly and by jurisdiction all around the world,” said Talley. “But the basic principles are the same: Start that spreadsheet, what are your contracts? What are your contractors? What’s been paid out? What hasn’t? Where should you put an immediate freeze? What is happening in your jurisdiction where it is to be held? All of that feeds into whatever the decision is going to be. 

“We are making sure we pay for the work that was done, but not the work that hasn’t been done.”
Leslie Zeck, director of meetings for the International & American Associations for Dental Research

This advice was echoed by panelist Leslie Zeck, director of meetings for the International & American Associations for Dental Research, who had to cancel its General Session & Exhibition and a centennial-year gala a week before it was scheduled to take place. She stressed the importance of carefully tracking developments, such as destination bans, border closures and prohibited flights, and how those actions impacted the contract agreements. In her case, the day after the association voted to cancel the event, the Walter E. Washington Convention Center announced it would be closing its doors. They are now in the process of carefully reviewing each one of their vendor contracts to assess their options.

“This is where the force majeure language becomes a major deal for everyone,” said Zeck. “We are making sure we pay for the work that was done, but not the work that hasn’t been done.”

File claims now

The speakers stressed that moving quickly in such a fast-moving environment is key. Weis recommended that planners set up a call with their insurance broke and the organization’s internal team, and tying in a claims adjuster to ensure there is a strategy to move forward with the claim — and to do this quickly.

“By having those conversations now and filing that claim early, you’re creating that partnership with the broker so you can show you’re doing everything you can on your end to mitigate costs,” said Weis. “That you’re going to reach out to your vendors, reach out to the hotels you have contracts with to look at what those cancellation provisions are, but [let the broker know], ‘We want your guidance to confirm you’re going to be a committed partner in those times in July and August to step up and pay the claim, and that we’re doing everything we can to reduce the cost for you.’”

Prepare for a long haul

While the speakers emphasized being proactive and seeking opportunities, they were hardly cheery about how long these processes will take. 

“If you listen to the epidemiologists, this is not a one-and-done scenario,” said Talley. “I hate to be the bearer of bad news, but they are talking about successive waves until this levels within our population. The mid-term period [from the summer through the next 12 months] looks just as challenging for us as the immediate. I know the hope was for some groups to postpone until the fall, but we’ve got a bad hangover coming from this first wave.”

He said this includes a “hangover” in terms of a slow recovery in numerous areas — public health, the economy, travel and more. Talley expects the current crisis to continue to impact behavior for the coming 12-18 months.

“If we think international travel is going to snap back, I can guarantee you that isn’t going to happen,” said Talley. “The question now is how do we repurpose, redesign those live events. The learnings from this are going to be key for how we go forward, because the snap-back to the way it has been has changed. As an industry, we need to figure out what our unique value is now.”