Event cancellation insurance reimburses the insured for irrecoverable expenses and lost revenue when an event is cancelled, postponed, abandoned, or relocated due to a covered cause. Covered causes typically include severe weather, venue damage or unavailability, performer illness or non-appearance, terrorism, and civil authority actions. Coverage can also extend to reduced attendance due to covered events. Communicable disease exclusions have evolved significantly since 2020.
Event organizers, concert promoters, festival producers, corporate event planners, wedding planners, trade show organizers, and sports event operators. Any organization investing significant resources in a live event — from corporate conferences to music festivals — faces financial risk if the event cannot proceed. Venues that depend on event revenue also benefit from event cancellation coverage for their hosted events.
Event cancellation policies are typically purchased for specific events with coverage limits equal to total event expenses and expected revenue. Policies must be purchased before any known circumstances that could cause cancellation (a hurricane forming in the Atlantic would make it too late to purchase weather coverage for a coastal event). Coverage periods span from policy inception through the event date(s) and may include a window after the event for delayed claims.
Event cancellation limits equal the total insurable event value (expenses + lost revenue), ranging from $50K for small corporate events to $50M+ for major concerts and festivals. Deductibles may be monetary ($5K-$50K) or expressed as a percentage of the insured value (10-20%). Adverse weather deductibles may apply separately. Premium is typically 1-5% of the insured value depending on event type, location, season, and covered perils.
A three-day outdoor music festival was cancelled when a hurricane warning forced mandatory evacuation of the venue area. The event cancellation policy covered $2.1M in irrecoverable production costs, $650K in artist guarantee payments, and $1.8M in lost ticket revenue — a total $4.55M recovery that prevented the festival's production company from bankruptcy.