Insurers put more demands on event safety

Events worldwide are becoming increasingly difficult to insure. Since the re-launch of the events industry, insurers have started imposing more requirements on security and some coverages have disappeared. What about in the Netherlands?

Earlier this year, the Insurance Journal reported that globally, damage and liability cover for event venues, performers and organisers is still obtainable, but applicants need to demonstrate more than before how they will ensure that the necessary safety measures are in place, protecting both performers and spectators. Underwriting guidelines for event insurance are becoming stricter, and risk management is increasingly required. Applicants must describe in detail how they will ensure safety and how they are prepared for emergency scenarios. "It's like we’re starting all over again in the insurance field," says Carol Bressi-Cilona, vice-president of entertainment and sports at HUB, a US-based international insurance company. The cost of liability cover rose by 5% to 10%[D1]  by 2023. Some coverages, such as for civil unrest and riots, were removed after the COVID pandemic. "The current market is not so much about rate fluctuations, but about reducing or removing certain coverages in insurance," said Bressi-Cilona.

Increase in risks

Increases in insurance costs are also caused by increasingly complex productions, which also increase risks. Spectacular acts that draw crowds are often not without risk for the workers deployed. In terms of spectator safety, risks may also increase. For example, the use of drones over crowds and poor crowd management can increase risk, and COVID has made the risk of disease contamination more explicit. The biggest risks for visitors are still the slips, trips and falls. But assault and injury after a confrontation with security can also lead to compensation claims.

Astroworld

A special mention in this context should be given to the 2021 Astroworld festival in Houston, Texas, at which ten people died. The very serious events have had a long aftermath with huge claims for damages, and this has contributed to insurers now requesting more information on the safety of the event, for example the presence of sufficient escape routes. Insurers may also mandate measures such as deploying metal detectors at entrances to keep out firearms at an event. The increasing impact of weather can also drive up insurance costs. For example, in the US, insuring a festival on the east coast during hurricane season can be a lot more expensive than a spring festival on the west coast. Another site-specific risk is, for example, the likelihood of earthquakes. But the quality of the organisation also comes into play: "If you have a full event with understaffed security and cheap alcohol, that's a problem for the insurer," says insurance broker Ryan Jones of Insurance Office of America.

The Netherlands

In our country, insurers' requirements for event security still seem limited, as generally the Dutch event market is very professionally managed. According to Michiel Bredius of No Risk, insurers do not make specific demands, but when a security plan is substandard they can decide not to insure, or to charge a higher deductible.

Weather-related cover is also a major component of an event's insurance amount in the Netherlands. One example of this is the Guilty Pleasure Festival, a two-day festival around the Gaasperplas lake in Amsterdam, which was cancelled on Sunday 9 July 2023 due to approaching thunderstorms, wind gusts and hail. In a statement, the organisers said that, after frequent contact with the security services, their insurance broker No Risk and the weather services, given the locality and the uncertainty of where and in what severity the extreme weather would impact the venue, the risk was too great to take. This was a situation in which, in the end, in consultation with the security services and No Risk, they had to cancel the second day of the event.

Looking ahead

What are the financial implications of stopping an event, is it insured and how is the decision made? In scenario planning sessions held before a major event, such issues can be thought through well in advance with all the parties involved. During this handling of a crisis scenario, the possibility of cancellation is often also discussed. Is this even an option, from an insurance point of view? Bredius indicates: "The specialist often has a decisive judgment in this, like, for example, paramedics in health-related incidents and a meteorologist in a weather scenario. But it is desirable that the decision to cancel is always made in joint consultation, with the organisation, the insurance broker and the competent authority."

Source: https://www.eventsafetyinstitute.nl/blogs/verzekeraars-stellen-meer-eisen-aan-veiligheid-evenementen/

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