December 01, 2001
Meetings & Conventions: Newsline newsline.gif (8042 bytes)   COVERAGE FOR TERRORISM DISAPPEARS FROM POLICIES
Costs Skyrocket for Event Insurance Jack Withiam
Jack Withiam Insurance companies learned a costly lesson on Sept. 11, and planners are feeling the ramifications. No longer do cancellation policies cover acts of terrorism, and the price of such insurance is soaring.

Previously, acts of war were excluded from event coverage, but there was no exclusion for losses resulting from terrorism. “Major carriers said they will not invoke war exclusions,” said Lou Novick, president of the Novick Group insurance and financial services firm in Rockville, Md.

As a result, insurance firms are struggling to pay millions of dollars in damages. The industry is lobbying Capitol Hill for relief.

In the meantime, rates for event cancellation insurance could rise by 100 percent, said Tom Kornelis, vice president of the Seattle insurance firm, Acordia Inc., a Wells Fargo Co. High-profile shows might face stiffer fees, he warned.

“They’re increasing rates and reducing the amount they will write,” said Kornelis. For example, an event insured for $1 million now might only be covered for half of that, possibly forcing some shows to buy multiple policies to obtain the proper amount of coverage.

Coverage for acts of terrorism, meanwhile, is simply not available. “No one is going to be successful in obtaining coverage [for terrorism],” said Novick.

Charles Greco, president and CEO of Framingham, Mass.-based IDG World Expo, discovered this after attempting to buy insurance. The only quote including terrorism was from Lloyd’s of London, but it applied only to events within one week and 250 miles from an attack useless if an incident was to disrupt air travel.

“We’re not worried about something happening at the Javits or Moscone. We’re worried about something happening that prevents people from traveling,” said Greco.

Jack Withiam, executive vice president and general counsel for White Plains, N.Y.-based George Little Management, said if coverage gets too pricey, “We might just self-insure the smaller shows.”


Trade Shows Report Lower Numbers Events suffer slippage compared to last year 3rd Quarter 20003rd Quarter 2001Percent Change Net Square Feet 238,892 230,168-3.7% Exhibiting Firms801767-4.2% Professional Attendance15,56914,396-7.5% Source: Tradeshow Week’s Quarterly Report of Tradeshow Statistics Back to NewslineM&C Home Page
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