“Event insurance” is confusing. Five possible types of insurance can be relevant. On top of that, event insurance for incentive travel can be even more complicated. So, event insurance is really an umbrella term for multiple coverages. Wait a minute! “Umbrella insurance” is the 6th kind of insurance!
Event Insurance for Incentive Travel
Event Cancellation Insurance
Event cancellation can cover a wide range of conditions, such as weather, disease outbreaks, labor strikes, power outages, terrorism, reduced attendance, inability to travel, etc. Here’s where the challenge occurs. A customer wants a broad definition of covered conditions, but the broader the list, then the higher the insurance premiums rise.
TIP: Very few corporate incentive trips get cancellation insurance. It’s more prevalent with association conferences, where an annual conference is the primary revenue generator for the organization.
Travel Insurance
Travel insurance can be useful for incentive travel programs that reimburse for travel interruptions.
But, travel insurance can cover a confusing list of situations: cancellation for the sickness of the passenger (if they cannot travel), cancellation due to work schedule conflicts, trip interruptions, and travel delays. For example, if attendees get stuck due to weather delays, their hotel charges or extra flight costs would be covered.
Certain variations of travel insurance will cover medical costs and even emergency evacuation.
The progressive levels of coverage and costs would be:
- Trip insurance – Merely covers travel interruption costs like hotels and airfares.
- Trip cancellation – Includes trip interruption, but can be expanded and more expensive with “cancel for convenience” clauses to cover “Oh, now I’m too busy,” “I have family matters that prevent me from traveling,” “I had a different job now”…
- Travel medical – covers emergency medical coverage outside of the home country.
- Medical evacuation – or “medevac” provides emergency medical evacuations and international security evacuations.
TIP: Personally, I’m not a fan of travel insurance, because the confusing coverages, clauses, and exclusions require meeting planners to possess the technical expertise of an insurance broker. It creates potential misunderstandings with travelers. Brightspot supports our clients with insurance expertise, but we no longer recommend it for incentive trips.
Risk Protection from Force Majeure
This peculiar French phrase for ‘higher force”, commonly known as acts of God, should be in every hotel contract. If we pause, take a deep breath, don’t hyperventilate over extremely hypothetical events, and level our head – we might realize that force majeure already covers the same contingencies as cancellation insurance.
For legal clarification, a force majeure clause renders the contract null and void, eliminating hotel liabilities. But, an organization would likely have other, smaller costs if an event is canceled. Cancellation insurance could cover airfares, off-site events, excursion activities, registration fees, sponsorships, or event management fees.
TIP: A good force majeure clause covers 99% of reasonable risks for incentive travel.
For more help with incentive travel and events, take a look at our website.
