Meetings & Conventions: Newsline
COVERAGE FOR TERRORISM DISAPPEARS FROM
POLICIES
Costs Skyrocket for Event Insurance
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.”
• MARTHA COOKE
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
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