Home / Daily / Event cancellations 'probably not covered' by insurance
12 March 2020
Sports clubs and event and conference organisers are not likely to be able to claim on insurance policies for coronavirus-related cancellations.
Event cancellation insurance is increasingly popular due to the huge potential costs involved if a major attraction is called off due to unforeseen circumstances.
Sporting fixtures across the globe have been abandoned due to the COVID-19 outbreak, now declared a pandemic, and festivals and conferences here in Australia have also fallen victim to the virus.
Steadfast yesterday cancelled its annual convention due to start in Perth on March 22, saying it would refund delegates and sponsors. The Australian Securities and Investments Commission and Insurance Council of Australia have also postponed their upcoming annual forums.
Steadfast declined to comment on its own insurance arrangements, but insuranceNEWS.com.au understands that most event cancellation policies contain a communicable diseases exclusion.
An extension can be written in, but now the outbreak is a “known event” it is impossible to get cover specifically for COVID-19.
Even if insureds arranged communicable disease coverage prior to the outbreak, insurers are unlikely to pay claims if an event cancellation is based on a decision by organisers, rather than a clear direction by authorities.
Sportscover Australia says it has not received any claims related to COVID-19 so far, and that its exposure to the outbreak is negligible.
The specialist underwriting agency, in operation since 1986, insures participants and players, coaches and instructors, clubs and teams, gyms and fitness facilities and associations.
CEO Simon Allatson told insuranceNEWS.com.au cover for a communicable disease would generally require an extension to a standard policy and an additional premium – something few policyholders had the foresight to arrange.
“It’s unlikely their normal cover is going to recompense for any loss so from that point of view our exposure, I would suggest, is minimal,” Mr Allatson said.
“This has taken the world by surprise. It hasn’t been foreseen and people haven’t necessarily factored that into their insurance arrangements.”
Sportscover has received a growing number of enquiries about the virus, particularly in relation to travel arrangements for athletes and sports teams as well as events that are being postponed or cancelled.
The insurer plans to have conversations with its broker network to make sure clients are fully aware when looking at cover for travel and events that they consider all possibilities, “even if they are extreme”.
“The pandemic issue is one we are still very much in the middle of,” Mr Allatson said.
“At the moment it has been minimal in terms of insurance impact for us but it is something that we are talking about internally each and every day.”
Mr Allatson, formerly CEO at Athletics Australia, says the outbreak will likely trigger new and detailed management conversations regarding cover for sports or events and encourage people to think about every foreseeable issue that might impact their operation.
“That is probably one of the few upsides, that we learn from it and be better prepared for next time,” he said.