Corporate functions Melbourne will cater any business industries according to their need. With any dynamic and entrepreneurial business sector like the Event Industry it is not surprising that risk taking is a common and probably necessary part of creating a successful and profitable company.
What company exists without taking a few risks now and again? Perhaps the risk is an investment into new premises, buying a rival company or entering a new market place.
Such risks are not insurable. If they were, we would have terrible business people making terrible decisions but never suffering the consequences of such decisions!
Those companies that do get past their first year and become relatively successful have to constantly evolve to remain so.
This involves reinventing their propositions to customers, acquiring new staff and generally becoming better and better at what they do. With growth and success come the inevitable procedural demands. Finance, Tax, Compliance, Health and Safety, Risk Management and Insurance etc, all unappealing to the entrepreneurs but still fundamentally important.
After working in the Event Insurance sector for a number of years I can tell you that most event companies buy insurance for two reasons:
1) It is a Legal Requirement – e.g. Employers Liability which is a statutory requirement for all UK businesses.
2) It is a contractual requirement -.e.g. the Organiser is told they must have Public Liability Insurance or they will not be traded with. This is common with Event Venues and Organisers but also Event Organisers and Exhibitors.
So out of these ‘forced’ reasons to buy insurance a general trend has emerged. An organiser will say what must I have (because I am told to), and how cheap can I buy this for?
The insurance market has responded and cost effective “buy online” or over the phone, automated industry has emerged…selling Public Liability and Employers Liability Insurance.
There is nothing wrong with the facility in principal; in fact we provide standard Event Liability Insurance policies online too. The problem is with Organisers making an informed choice.
Unfortunately there has been an oversight both with buyers of insurance and perhaps more importantly the sellers of insurance, the agents. The reason a person or a company should buy insurance is to protect against the uncertain yet quite possible chance of a loss. This might be a claim from an injured member of the public or a Fire which has damaged an Exhibition Hall. Both could lead to very different types of insurance claims but ultimately in a financial cost to the Organiser.
A major area of cover which Organisers seem to be avoiding or missing is the protection of their revenue. This revenue is critical not just to the success of the company but also the survival.
We mentioned that most general business decisions cannot be insurered, such as creating an event that has no target market and hence nobody turns up!
What can and should be insurered is “Revenue Protection”. This protects Event Organisers against the risks of the uncertain and those circumstances which cannot be foreseen or otherwise catered for.
Obvious risks include a Fire or Flood at the Event Venue. However there are many other previously unforeseeable circumstances that can lead to an event being disrupted and an Organiser being out of pocket.
We have seen the Volcanic Ash Cloud, Industrial Strike Action and the Threat of Terrorism all bringing major cities and the events within in them to a halt.
If you are an Event Organiser it is time to open your mind and be honest with yourself in answering the below questions:
· Could my event be disrupted in anyway due to circumstances outside of my direct control?
· If it was disrupted, how much would it cost me financially? Either in additional costs to save the event, and/or in lost revenue/profits?
· Following the additional costs and loss of revenue, would my business survive and in what state? Would I have to lay people off?
If you think that your event could be disrupted but there be no financial repercussions consider the below:
- 90% of Venues will not reimburse Organisers their costs, let alone any lost profits should the Event be cancelled or disrupted. Check the contract!
- How much would it cost to reorganise the event if it needed to be rescheduled? Consider marketing costs and potential lost Exhibitors from a rescheduled event.
- Think about the effect on the relationship with the Exhibitors/Visitors. If the event relied on repeat custom for future success, it is likely that Exhibitors and Visitors would need to be compensated if the Event could not go ahead as planned. Alternatively these customers might be lost forever.
This article might sound like preaching but it is because I believe that Organisers want to adequately protect themselves. I think it is the duty of the insurance broker to highlight risks to an Event Organiser and offer possible insurance solutions.
If an Organiser considers all the options and decides a particular insurance is appropriate or is not appropriate, that is fine. It is all about making an informed decision.
I have worked at Heartland Event Insurance Brokers for a number of years and can say that most of my Organisers that have taken the time to consider the risks to their business vs the comparably small cost of adequate insurance would never dream of underinsuring again. Many have fortunately been protected by the policies we have placed.
If you wish to look at the risks that face your business and what insurances are available to you, it is advisable to contact a specialist independent insurance broker. Often an initial review will cost nothing unless you decide to place any cover.
I am personally available to provide independent advice to the Event Industry, you can contact me on 01926 420 555 or visit our website.
Heartland Event Insurance is an independent insurance broker to the Event Industry. We provide various insurances including Event Revenue Protection, Event Liability Insurance and Exhibitor Insurance Solutions. visit http://www.heartlandevents.co.uk for more information.
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