Insure Rescue

Callers put on hold on the line to the Wembley Conference Centre hear Michael Jackson’s Dangerous blaring down the phone. It’s an appropriate theme tune, because the business of organising conferences and exhibitions can be a hazardous one.

The costs involved with events, and the money potentially at stake, can be enormous. Insiders quote figures as high as 14m for some of the biggest UK exhibitions – once revenues from exhibitor and delegate fees, advertising revenue, equipment and room hire are taken into account.

Given the high sums involved, it is odd that so many of these events seem to operate on a wing and a prayer. Only one in ten companies adequately insures events against anything going wrong. The other 90 per cent are presumably crossing their fingers and hoping everything will go to plan. The problem is, it rarely does.

Consider the recent spate of terrorist actions – either threatened or actually carried out – which caused major disruption to our travel systems. At one point, the M6 was closed for hours as police attended to what turned out to be a false bomb alert. Closing down a major motorway is hardly going to help your event if 350 of your vital delegates are struggling to arrive.

The recent series of rail strikes ought to send another warning to organisers, who may be faced with unexpected flight bills for important guests. Even planes aren’t a sure bet, as BA’s long-running battle with its staff proves.

Then there’s sheer bad luck. One unfortunate organiser had planned a small reception at a hotel in Scarborough, where delegates could overlook the sea as they talked. A nice idea. Unfortunately the hotel fell into the sea a week before the event.

“It really does happen,” says Steve Warner, sales director for Insurex Expo-Sure, a UK firm specialising in insurance for the conference, exhibition and events market.

“There was one conference in Scotland where everything was flooded. Another in the North six years ago was under six feet of snow. Some of the public still battled through the elements and managed to turn up, but you are obviously dealing with reduced attendance and lower revenues at that point.

“Then there’s always the case where there have been fires at venues. If you don’t have insurance, you have a problem,” he adds.

Others agree. “When you’re working with an event of more than 100 delegates, there’s no way you should ever stage it without insuring against things going wrong,” says Christine Milburn, spokeswoman for the British Soft Drinks Association. She organises its conferences, which attract an international audience of journalists and top company executives.

“Things can go wrong,” she says from experience. She once oversaw a nightmare conference in Amsterdam, where at 9am – just 15 minutes before the first of a series of governmental speakers was due on the platform – a crisis hit the Dutch government. All the ministers and government officials who were scheduled to speak pulled out.

“Everyone had turned up and was waiting,” remembers Milburn. She ended up dragging one colleague from his hotel bed to make a somewhat dishevelled appearance three hours earlier than he had expected. Another contact was hauled from a nearby office, and a third colleague was flown in to make the afternoon slot. “No-one complained. It was a great conference in the end. But if we hadn’t arranged that backup or taken out any insurance, funding the hundreds of delegates who had flown in to Amsterdam would have been a nightmare.”

Begging and quick-thinking may save the day in some cases, but the cost of making sure with insurance is tiny compared with the potential losses.

Full insurance cover works out at about one per cent of total turnover – not much when you consider what is at stake. This can cover unexpected bills, such as alternative transport to ensure vital guests arrive, or the costs of hastily arranged alternative catering, or even unexpected extras – such as matting to cover muddy walkway areas when an expected sunshine-soaked conference falls prey to the elements.

So why do British organisers take risks? One mistake many make is to assume that insurance is already built into the venue’s hire contract. Not so. It is up to the client to arrange the insurance, say conference organisers.

“Conferences and exhibitions are subject to a rental agreement,” comments a Wembley Stadium spokes-man. “We as the venue do not insure you against events, although we do recommend you take it out.”

Others say they see it as a budget control measure. “Costs are so tight and insurance is just another cost,” says one company director who regularly organises events involving high-profile governmental spokesmen or business executives discussing policies and working practices. “I would only insure if there had been a major cost outlay – if we had to hire conference halls and the like. With the smaller events, budgets are already squeezed. Nothing’s gone wrong so far.”

Other people leave it too late. “It is easy to arrange insurance, but the one thing I would say is, never leave it until the day before,” advises Philip Watson, general insurance director with John Charcol (media & entertainment). Many policies ask for at least 14 days notice in order to assess the risk.

Then there’s blissful ignorance. One consumer magazine organises an annual prize presentation event honouring product innovation. It’s hosted by a celebrity speaker, and involves about 400 delegates, who each pay for a four-course meal and several bottles of wine and champagne through the night. “Insure? No. I didn’t know you could,” the magazine publisher cheerfully told Marketing Week. “There’s never been a problem. If the VIP prize-giver doesn’t turn up you can always get Jonathan Ross at short notice.”

For those feeling less confident, there are several insurance options available. Any reputable broker would be able to cover low-key events with a standard policy, although it’s worth noting that you are likely to have to fork out the first 100 to 250 of any claim.

For larger events, Christopher Pouncey, founder of conference and incentive organiser The Travel Organisation, says it’s best to call in the experts. He recommends that you use a broker which specifically caters for the type of event you are organising and can produce a tailored plan.

“Many customers don’t at first feel it is good value to take out insurance. But we wouldn’t feel, as project managers, that we had done our job properly unless we had recommended a specialist insurance package,” he comments.

Specialists brokers – such as Applewell, the firm The Travel Organisation uses – can provide tailored packages to suit. Pouncey says that if it is vital you create a good impression, it is worth asking whether the companies will provide “disappointment money”.

“Imagine if you had flown all these delegates abroad, or taken your top sales staff to an overseas conference to congratulate them on a hard year’s work. It is all about how they feel about the experience. If things go wrong you have to pay to make them feel better, whether that’s compensation or a bar bill.”

Pouncey recommends that travel insurance is taken out for each delegate if the conference is being staged abroad, in addition to the conference insurance cover. Other specialist packages enable you to insure your business against cancellation of the event; substandard facilities; or the inability of clients to attend because of causes beyond their control, such as strikes or terrorist action. Under Insurex’s Hospend scheme, such cover would cost about 7.50 for each person.

Insuring against the weather could prove a worthwhile option if good conditions are vital to the success of the event – when, for example, your conference involves outdoor activity or it is themed around events such as cricket or tennis.

John Lear, who works for Eagle Star Insurance, is the UK’s only Pluvius Underwriter – his title comes from Jupiter Pluvius who was the Roman god of rain. “We don’t just cover excessive rainfall. Events can be affected by a variety of adverse weather conditions,” he says. “For example, rain before an event could result in abandonment because of waterlogged or flooded ground – even if the weather is fine on the day. Or high-speed winds may prevent the launch of a hot-air balloon or the use of a mobile crane.”

Insurance premiums start from about 104, and the payouts are potentially huge if your event becomes a disaster. One company received 15,000 when thunderstorms hit the South coast in July 1995, disrupting the previous seven weeks of glorious sunshine.

You can also take your own precautions in the case where an event hinges on a celebrity speaker. “We had one conference where Jack Dee was hired, but he was about to become a dad, so he warned he could drop out at the last second,” says Harry McNicol, production manager for Head to Head, which organises conferences and prize-giving ceremonies.

“In the end, Rory Bremner was invited in a social capacity, but was ready to jump up and take over if need be. Everything was fine, so he ended up just having a dinner, which was a shame because he was raring to go all night.”

Even with insurance that apparently covers every eventuality, and the expense of stand-in celebrities and experts, a bit of common sense can save the day.

“Check the security,” advises Watson. “Some exhibitions provide a security guard who will patrol through the night, but not all of them. Even with the best insurance policy, if you have left your vital equipment in the building overnight and it gets stolen, there’s going to be a bit of a problem.”