Quick facts from Nathan Nicholas of the Nicholas Hill Group, Running USA’s membership insurance provider
Since the COVID-19 pandemic hit the U.S. in early March, Running USA has received a high volume of questions about event insurance and the options for future event cancellation coverage.
Nathan Nicholas, partner at the Colorado-based Nicholas Hill Group, has been kind enough to field many of those questions and address a sobering reality: if you were not already insured for communicable disease coverage prior to the outbreak, it will not be possible to purchase coverage for the foreseeable future. Those who did have policies in place may have some recourse.
This is an unprecedented situation, not just for the event industry but for all of us living through it. That makes it harder for event industry veterans to know exactly how coverage opportunities will line out in the future, Nicholas noted.
“It is impossible to predict if and when insurance companies will remove the COVID 19 exclusion or even when they will begin to once again cover communicable diseases.”
If you’re feeling confused or alone, you are not. There are many dealing with the exact same emotions right now, in our industry and beyond.
“At the end of the day, we must all realize that our action or inaction regarding a potential cancellation can have a positive or negative impact on our community,” said Nicholas. “Continue to have your participant’s health and safety as your top priority, plan ahead and know that you are not alone.”
We asked Nicholas to summarize some of the top points that all event organizers should be aware of regarding insurance at the present time. Here are his insights:
If you purchased event cancellation insurance prior to the outbreak and your policy includes communicable disease coverage, then you may be covered should you be forced to cancel your event.
If you did secure coverage for communicable disease prior to the current outbreak, the word “forced,” more specifically, the term force majeure, is key to whether your policy will respond should you cancel… please note, fear is not a covered reason for cancellation. Rather, you would need to show an inability to commence the event. This would typically be a civil authority shutdown of the event; restriction on mass gatherings; some type of travel ban, etc.
Unfortunately, it is now impossible to purchase a new event cancellation insurance policy to cover the current Coronavirus outbreak.
Prior to this outbreak, Running USA members could purchase a new event cancellation insurance policy (with a 10% member premium discount) that included communicable disease coverage (without a Coronavirus/COVID 19 exclusion).
As of March 13, 2020, many insurance companies have stopped offering communicable disease coverage with their event cancellation policies.
Historically, once an outbreak ends, insurance carriers will remove the outbreak related exclusion(s) and once again begin covering communicable disease without the specific illness being listed as an exclusion.
When the outbreak ends, if you want to protect your event from future cancellation related financial impacts, the key is to plan ahead. Request a quote for an “all-cause” event cancellation policy that includes communicable disease coverage as soon as it is once again available. Consider event cancellation insurance premiums a cost of doing business and budget for it while still in the planning phase.
Will my general liability/business insurance provide some protection? We’ve had several questions related to business interruption and/or loss of income coverage. Without seeing each specific policy and how coverage, perils and exclusions are defined, it is impossible to tell you for sure, but in general, coverage for the current outbreak may unfortunately prove unlikely. Business interruption coverage is typically limited to physical loss or direct physical damage to property at the insured premises (think flood, fire, etc.)
Finally, he added:
“I am available to assist any Running USA member (or non-member event) should they have specific insurance related questions or concerns. Please email me at nathan@nicholashillgroup.com”
Thank you, Nathan for sharing your insight and wisdom with our members – we appreciate it and know they do too. For more information on Running USA membership and insurance, please visit:
https://www.nicholashillgroup.com/runningusa
