Event Cancellation Event Cancellation Insurance Insurance

after the 2005 Hurricane after the 2005 Hurricane SeasonSeason

BUTTINE EXHIBITION INSURANCEBUTTINE EXHIBITION INSURANCE125 PARK AVENUE, 3125 PARK AVENUE, 3RDRD FLOOR FLOOR

NEW YORK, NY 10017NEW YORK, NY 10017T 800.964.4454, ext 21T 800.964.4454, ext 21

F 212.986.2822F 212.986.2822jmb@buttine.comjmb@buttine.com www.buttine.comwww.buttine.com

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Event Cancellation Event Cancellation InsuranceInsurance

ObjectivesObjectives::

• Effects of 2005 stormsEffects of 2005 storms

• What is Event Cancellation Insurance What is Event Cancellation Insurance and how it helps youand how it helps you

• When to buy coverage and what it costsWhen to buy coverage and what it costs

• How claims are paidHow claims are paid

• How to purchase this insuranceHow to purchase this insurance

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The Short-Term EffectsThe Short-Term Effects

•A spike in demand for Event A spike in demand for Event Cancellation Insurance Cancellation Insurance

•Record number of cancellations, Record number of cancellations, postponements and relocations postponements and relocations Record Insurance Losses Record Insurance Losses

•Rates for Gulf Coast events increase Rates for Gulf Coast events increase due to projected Re-insurance (The due to projected Re-insurance (The Insurance Company’s Insurer) rates; Insurance Company’s Insurer) rates; 2006 est. are worse than 20052006 est. are worse than 2005

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The Long-Term EffectsThe Long-Term Effects

• A shift in the perception of Event A shift in the perception of Event Cancellation Insurance from a “selective” Cancellation Insurance from a “selective” to a “compulsory” mindset for manyto a “compulsory” mindset for many

• Event Organizers will need to re-evaluate Event Organizers will need to re-evaluate their “Contingency Plans” their “Contingency Plans”

• The cost of holding events at high risk The cost of holding events at high risk locations – Gulf Coast during hurricane locations – Gulf Coast during hurricane season, in the North during the winter or season, in the North during the winter or on the West Coast - should be considered on the West Coast - should be considered

• Potential insurance rate increases for Potential insurance rate increases for events in High-Risk locationsevents in High-Risk locations

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Event Cancellation Event Cancellation InsuranceInsurance““Event Cancellation Insurance Event Cancellation Insurance

– a form of customer service” – a form of customer service” Jack Withiam, Jr. GLM LLCJack Withiam, Jr. GLM LLC

•Pays your anticipated profitPays your anticipated profit•Pays incurred expensesPays incurred expenses•Allows return of sponsorships, Allows return of sponsorships,

exhibitors fees and exhibitors fees and education/seminar chargeseducation/seminar charges

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Event Cancellation Event Cancellation InsuranceInsurance(“what’s in it for me”)(“what’s in it for me”)Security from this coverage adds value and Security from this coverage adds value and helps grow your event…helps grow your event…

•It’s security to investors by providing a degree It’s security to investors by providing a degree of certainty that their investment will be repaidof certainty that their investment will be repaid

•It provides security to owners (individuals, It provides security to owners (individuals, corporations, and non-profits) that expected corporations, and non-profits) that expected profits will be there in the event of a covered profits will be there in the event of a covered claimclaim

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Event Cancellation Event Cancellation InsuranceInsuranceNo one wants an event cancellation so …No one wants an event cancellation so …

• It pays the incremental cost of It pays the incremental cost of “making it happen” in event of loss“making it happen” in event of loss

•Pays the cost of rescheduling the Pays the cost of rescheduling the event in same or new locationevent in same or new location

•Pays the cost of combining a cancelled Pays the cost of combining a cancelled event with the follow-on eventevent with the follow-on event

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When to purchaseWhen to purchase Event Event Cancellation InsuranceCancellation Insurance

• When you have an When you have an economic interesteconomic interest in event: in event: i.e. when’06 event concludes and you are selling i.e. when’06 event concludes and you are selling space for ’07 event, or sign a lease and pay venue space for ’07 event, or sign a lease and pay venue depositdeposit

• The rate is the same 2 months away from your The rate is the same 2 months away from your event as it is 12 months – the more in advance event as it is 12 months – the more in advance you buy, the more covered days you get.you buy, the more covered days you get.

• Best way is to buy two years’ in advance for Best way is to buy two years’ in advance for shows that are tied to one facility, i.e. insure two shows that are tied to one facility, i.e. insure two years’ worth of revenue.years’ worth of revenue.

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What Event Cancellation What Event Cancellation Insurance CoversInsurance Covers

• HurricanesHurricanes• Snow StormsSnow Storms• FloodsFloods• Power Outage / BlackoutsPower Outage / Blackouts• EarthquakesEarthquakes• Building / Venue DamageBuilding / Venue Damage• StrikesStrikes• Wild FiresWild Fires• Terrorism & Avian flu- optional, but getting Terrorism & Avian flu- optional, but getting

commoncommon

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Event Cancellation Insurance Event Cancellation Insurance CostCost• Rates are determined by:Rates are determined by:

Location, Event Dates, ProfitabilityLocation, Event Dates, Profitability

• Rates are usually less than .5% of booth/conference Rates are usually less than .5% of booth/conference fees – more for EQ and hurricane areasfees – more for EQ and hurricane areas

• You can structure policies to ‘fit your needs and You can structure policies to ‘fit your needs and budget’ by using coinsurance, or budget’ by using coinsurance, or cost sharingcost sharing, and , and installment paymentsinstallment payments

• Policy Limit Policy Limit mustmust equal the show revenue – (usually) equal the show revenue – (usually)

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Tips for buying Event Tips for buying Event Cancellation Insurance Cancellation Insurance

• Utilize Specialists – IAEM and other ass’n plansUtilize Specialists – IAEM and other ass’n plans• Avoid Generalists Avoid Generalists • Direct Access to the insurerDirect Access to the insurer• Develop a Contingency Plan and share it with Develop a Contingency Plan and share it with

your brokeryour broker• If you know that your event can be If you know that your event can be

rescheduled, be sure to let your broker know rescheduled, be sure to let your broker know and share it with your insurance companyand share it with your insurance company

• Understand your insurance company’s history Understand your insurance company’s history in this niche in this niche

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Information needed to get an Information needed to get an Event Cancellation ProposalEvent Cancellation Proposal

Event Details:Event Details:

•Event DatesEvent Dates•Name of VenueName of Venue•Event BudgetEvent Budget•Venue Contract Venue Contract •Loss HistoryLoss History

With this information, you should get a proposal With this information, you should get a proposal within 72 hours within 72 hours

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Event Cancellation InsuranceEvent Cancellation InsuranceHow a claim is paidHow a claim is paid

The Principles …The Principles …Budget: Gross RevenueBudget: Gross Revenue $1,000,000$1,000,000

ExpensesExpenses $ 750,000 $ 750,000 ProfitProfit $ 250,000$ 250,000

A claim example – total loss occurs before opening ...A claim example – total loss occurs before opening ...– Paid 100% exp @ time of lossPaid 100% exp @ time of loss $ $ 750,000750,000– Cash in BankCash in Bank @ loss @ loss $ 250,000 $ 250,000– Refunds @ total loss Refunds @ total loss a. $ a. $ 250,000250,000– Ins Co 1Ins Co 1stst Payment Payment b. $ b. $ 750,000750,000– Ins Co 2d PaymentIns Co 2d Payment c. $ c. $ 250,000250,000

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How to File a Show How to File a Show Cancellation claimCancellation claim• Call insurance broker or company ASAPCall insurance broker or company ASAP• Designate one staff member & an alternate Designate one staff member & an alternate

as ‘spokespersons’. as ‘spokespersons’. • Tell exhibitors what you will do after Tell exhibitors what you will do after

agreement is reached with insurer.agreement is reached with insurer.• Document all expenses and actions taken to Document all expenses and actions taken to

preserve the show.preserve the show.• Get name of adjuster, call him/her and make Get name of adjuster, call him/her and make

sure they understand your position and plan.sure they understand your position and plan.• Give regular updates to adjuster on status.Give regular updates to adjuster on status.

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Claim Forms and Claim Forms and StatementsStatements• You have to prove the lossYou have to prove the loss• A good short statement goes a long way A good short statement goes a long way

(w(who, what, where, when, why)ho, what, where, when, why)• No gratuitous information No gratuitous information • ““Just the facts, ma'am” Just the facts, ma'am” Sgt. Joe Friday, Sgt. Joe Friday,

DragnetDragnet• Good information may allow a quick Good information may allow a quick

settlement and avoid protracted settlement and avoid protracted adjustment process. Attendance history is adjustment process. Attendance history is key!key!

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Claim Forms and Claim Forms and StatementsStatements•No standard forms No standard forms

•To support your case - disposable To support your case - disposable cameras are good idea, keep local cameras are good idea, keep local newspapers, weather reports, other newspapers, weather reports, other evidence. evidence.

•Collect names, employers, phone Collect names, employers, phone numbers & addresses of all numbers & addresses of all witnesses.witnesses.

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One more thing … One more thing … Exhibitor LiabilityExhibitor LiabilityInsuranceInsurance• Exhibitor Liability is getting critical due to Exhibitor Liability is getting critical due to

cost of show manager’s liability insurance – cost of show manager’s liability insurance – it saves show managers’ policies from it saves show managers’ policies from paying “other peoples claims”.paying “other peoples claims”.

• Many exhibitors do not have insurance and Many exhibitors do not have insurance and an insurance requirement is a ‘good thing’ an insurance requirement is a ‘good thing’ for exhibitor and meeting mgr.for exhibitor and meeting mgr.

• Foreign exhibitors may have insurance but Foreign exhibitors may have insurance but it often does not pay claims in the U.S.it often does not pay claims in the U.S.

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Event Cancellation Event Cancellation InsuranceInsuranceThis concludes our presentation …This concludes our presentation …

… … What are your questions?What are your questions?

Jack M. ButtineJack M. ButtineBUTTINE EXHIBITION INSURANCEBUTTINE EXHIBITION INSURANCE

New York, NYNew York, NY(800) 964 4454, ext 21(800) 964 4454, ext 21

jmb@buttine.comjmb@buttine.comwww.buttine.comwww.buttine.com