Author: Ziad Seifeddine
As the Middle East continues to evolve into a global hub for hosting major sporting, business, and entertainment events, the demand for event cancellation insurance is increasing. The region regularly hosts prestigious events such as Grand Prix races, major golf tournaments, and large-scale stadium concerts. This burgeoning market has generated a critical need for comprehensive risk management solutions, including event cancellation insurance.
Navigating event insurance challenges in the Middle East
The Executive Director of DIFC Special Risks, Ziad Seifeddine, notes that the region faces a significant challenge due to the lack of comprehensive data. Unlike the UK, Europe, or the US, where event cancellation insurance is a common concept, the Middle East market is less familiar with this product, and demand is more client-driven. Clients opt for these policies based on financial exposure and contractual requirements.
While we have seen Communicable Disease and Cyber exclusions become mandatory post-COVID-19 pandemic, the Middle East's current regional conflict has led to the introduction of new exclusions under event cancellation policies, such as the Israel/Hamas exclusion, which comes in different wording variations depending on the participating insurer(s).
Coverage under an event cancellation policy
Event cancellation insurance is designed to protect those with a financial interest in an event from irrecoverable budgeted costs and expenses or loss of revenue due to the cancellation, abandonment, postponement, interruption, curtailment, or relocation of the event due to circumstances beyond the insured's control, such as:
- Adverse weather
- National mourning
- Denial of access/damage to venue
- Non-appearance of artists and performers due to death, accident, or illness
- War, terrorism, and civil commotion
Practical applications of the event cancellation insurance
Multiple stakeholders, including organisers, sponsors, venues, and local authorities, are typically involved in an event. Seifeddine explains that any party with a financial interest in an event can obtain event cancellation insurance, although usually the organisers purchase the policy. Generally, one policy covers the entire event unless distinct financial interests necessitate additional coverage.
Upon the decision to cancel an event, the policy is immediately activated, initiating the involvement of insurers, loss adjusters, and possibly lawyers or forensic experts. For example, during the recent flooding in Dubai, the organisers of the Middle East Energy conference initially postponed the event but ultimately cancelled it due to severe weather conditions and concern for the safety of the attendees.
Gallagher's support and expertise
In an era where the unexpected can significantly impact event planning and execution, Gallagher stands as a robust partner in risk management. Ziad Seifeddine emphasises the importance of opting for event cancellation policies to mitigate financial losses:
