Special Events Coverage: Increase in Terrorism Protection?

Special Events Coverage: Increase in Terrorism Protection?The recent uptick in terrorist acts has increased the need to address these tragedies in the insurance world. Special Events Insurance covers a broad scope of risks, including liability insurance for bodily injury, property damage liability, host liquor liability, and event cancellation coverage for lost deposits. However, unfortunate incidents such as the Vegas shooting last October and the Florida nightclub shooting have created a larger need for these special event hosts to address a more serious concern. With these types of violent acts on the rise, your clients could start to request a terrorism insurance component in their special events coverage.

After a tragedy occurs is naturally the time where your clients call and ask about their coverage and options to add to their existing policies. Most special events insurance policies exclude acts of terrorism, which is why it’s imperative to note that. However, if your clients want to purchase the coverage in addition to their existing policy, remind them of the additional premium cost.

However, navigating terrorism policies can be challenging, as well. For example, a “lone wolf” attack like the Las Vegas shooting, wouldn’t be covered under most terrorism insurance policies, because the shooter wasn’t affiliated with an official terrorist organization. And consider that some policies include time and distance restrictions, some provide cover for threats and not just actual acts, and some may include riots, strikes and civil commotions within their definition of “terrorism,” while others do not. The latter consideration opens the door to a wide range of related issues, states Insight + Analysis Magazine.

As the insurance expert, it’s up to you to inform your clients about what they are purchasing. Terrorism insurance isn’t a blanket policy that covers all acts. There’s so many different facets of the policy and exclusions that the client might not be aware of.

It’s important for insurance agents to review the client’s risk exposure from the start. A wedding, for example, has a far lower chance of facing terrorism than a concert hall. How many people the venue can accommodate has a huge effect on risk and premium price, as well.

“The exposures aren’t as great the smaller the event, typically speaking, so we’re constantly assessing the price ranges in the marketplace,” Mark Beck, senior vice president of the Mass Merchandising Division at K&K Insurance Group, Inc., explains. “It could be that certain sized events may be priced a little more competitively, but it really depends on the exposures and attendance.”

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