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Insuring the unknown

Tim Thornhill of Tysers insurance brokers explains the ins and outs of policy amid Covid-19, and how the pandemic is set to change insurance policies for all

18 May 2020

Insuring the unknown: Tim Thornhill talks insurance in the age of Covid-19

Conversations surrounding insurance in the wake of the Covid-19 outbreak have been complicated, simply because these are unprecedented times.

If you look at any industry and economic decision, when you are dealing with something that has not been dealt with in a generation, there is always going to be complexity. Where there is no practical or legal precedent, there will be a delay in decision-making capability and a lack of clarity. This is all compounded by the quickly evolving nature of the pandemic.

If event organisers purchased cancellation insurance with a blanket communicable disease extension, they are likely to be insured.

However, there are some instances where there could be exclusions specific to a type of communicable disease. The detail is in the policy wording and any extensions that are noted within the documentation. It is hard to give a specific example as not all policies are the same.

When venues are ordered to shut down by the government it can alter the insurance claim, but again, this will depend on the policy. In some cases, there can be a trigger for a policy to react if the government or a local authority stops an event happening by mandating that a venue shuts down. This is different to a venue choosing not to put an event on, in which case, it is less likely that the cancellation would be insured.

However, if the proximate cause is still excluded (communicable disease or terrorism, for example), then the government enforcing a shutdown does not change the terms of the policy, and a claim would not be covered.

We can look back on government and local authority decisions with the benefit of hindsight and most of us reading this will have different opinions even with that. In the UK, from the evidence of the government, as of the time of writing, social distancing and the shutdown of venues has helped to save lives. Whether or not the timing of that was perfect in terms of the loss of life or economic impact will never be known, as is the case with all future governmental decisions.

When you are dealing with something that has not been dealt with in a generation, there is always going to be complexity

Some organisers are also choosing to postpone rather than cancel events. Dependent on the insurance contract, postponing an event is likely to help with the insurer’s losses, but it may also help promoters.

It is likely that live music, sports and events are going to see an increase in insurance premiums after this. This class of insurance has seen catastrophic losses this year; last year saw some big losses, too. These increases will be coupled with a change in the wordings, and work is happening in the background by us, our clients and our insurer capacity to make sure that we can get the best balance possible in what is an extremely difficult time for live events.

We have set up teams specifically to look at the future and we are looking forward for our speculation to turn to plans and then reality, to help the industry get moving again and, most importantly, our attendees experiencing the world’s great talent live.

We are going to see a change in insurance policies. It has already happened. What we are looking to do is make sure that the changes ensure that our promoters, artists and all others in the value chain are protected in most eventualities. It is tough now to know what this will look like in two months, so forecasting six months is impossible. We just do not know the full impact.

For now, we would advise event organisers to be prudent and look at contracts carefully, and when taking an insurance policy out for event cancellation, talk to your broker and study it in detail.

Brokers are here to help and we work on the behalf of our clients, so please study the facts.

Tim Thornhill led the ‘Cancellation insurance’ workshop, along with Tysers colleague Gary Brooks, at this year’s International Live Music Conference. 


Tim Thornhill is director of sales, entertainment and sport at Tysers insurance brokers.

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