Destinations International has partnered with insurance and risk-management company Anderson Benson to develop event-specific cancellation and risk-mitigation policy options that will protect destinations and host organizations against financial losses across a range of potential disruptions. The Nashville-based boutique agency, whose policies are underwritten by Lloyd’s of London, works with renowned performing artists to insure concerts, among other events and industries.
For destination marketers, meetings have been a city’s most predictable and dependable market segment for incoming business, said Don Welsh, president and CEO of DI, which represents the interests of more than 650 convention and visitor bureaus globally. “The pandemic taught us not to take that for granted,” he added.
While the concept of event insurance isn’t new, typically meeting professionals have had to purchase off-the-shelf products that are not tailored to the specific needs of destinations and meetings, Welsh said this week during a press conference at PCMA’s Convening Leaders conference in Columbus, Ohio. The new program is designed to provide remuneration should an event be canceled or disrupted due to reasons beyond the destination organization’s control. Policies can cover traditional force majeure occurrences, such as adverse weather and terrorism, as well as disruptions due to civil commotion, national mourning, and travel boycotts and bans, among other circumstances.
Tailoring event insurance to current market needs
“This has been a long time coming,” Welsh noted. For more than a year, DI has been working with George Anderson, president of Anderson Benson, and a task force of 14 CVB leaders to understand the needs of destinations and planners. “We wanted to talk to those destinations that really were dependent upon the importance of meetings for vitality or community,” said Welsh. (See sidebar below for task force members.)
As we recover from steep loses, both planners and suppliers are concerned — first and foremost — with mitigating their risks when they commit to a meeting. “We don't know what's going to come down the pike next, but the best thing we can do is be prepared.”
Event cancellation insurance: What’s covered, what’s not?
“Nobody, including me, really likes to spend money on insurance,” said Anderson. “You cringe when you hear the word, but it's a tool to protect one's balance sheet. This product will protect any budgeted cost and revenues for any type of meeting, event or convention.”
The new policies can cover risks that include adverse weather, terrorism, civil commotion, national mourning, active shooter, cyber breach, and nonappearance of a speaker or other important performer or presenter. Other considerations are public sentiment and reputational protection if, due to unforeseen circumstances, going forward with an event would reflect poorly on the host organization.
Planners and destinations can select coverage for just a few of those circumstances or a full range of potential disruptions, Anderson explained. Policies will be customized to address specific concerns and will be priced according to the breadth of coverage, among other factors.
No, Covid is not covered… yet
Currently, policies do not cover communicable diseases, although that might be available “in a very narrow way” later this year, said Anderson. Another concern being discussed is the passage of legislation after the contract is signed — such as abortion restrictions or bans — that a group strongly opposes.
“We have already started talking to underwriters about that,” Anderson told Northstar. “We're trying to define how that works…. We're not there yet, but I think we can get there.” The challenge is to define what would trigger the application of the insurance, and how losses would be measured. “I think we’ve got some good ideas.” In fact, conversations will be taking place next week on this topic, and such coverage could be introduced within a few months, he said.
DI’s Insurance Task Force
A committee of 15 DMO leaders worked with Destinations International and insurance firm Anderson Benson to develop event-cancellation and risk-mitigation policies that address a broad range of concerns. The following are the members of the Insurance Task Force:
- Adam Burke, Los Angeles Convention and Tourism Board
- Al Hutchinson, Visit Baltimore
- Butch Spyridon, Nashville Convention & Visitors Corp.
- Claude Molinari, Visit Detroit
- Gina Gemberling Wibben, Little Rock Convention and Visitors Bureau
- Julie Calvert, Visit Cincy
- Leonard Hoops, Visit Indy
- Marc Anderson, Visit San Antonio
- Martha Sheridan, Greater Boston Convention and Visitors Bureau
- Michael Crockatt, Ottawa Tourism
- Santiago Corrada, Visit Tampa Bay
- Walt Leger III, New Orleans & Company
- William Pate, Atlanta Convention and Visitors Bureau