Hurricane Florence Renewed Insurance Requirements Focus
As the Carolinas braced for Hurricane Florence, there was a renewed focus on insurance requirements for events. This is an often short-changed element when planing for events because most planners focus on contingencies. But what happens in an historic, catastrophic situation like Hurricane Florence (also deemed a “Force Majeure” scenario by most venue contracts)? Here’s a good read from Billboard.com discussing the impact on a number of music festivals scheduled and how Hurricane Florence Renewed Insurance Requirements Focus in the industry.
As Carolinas Brace for Hurricane Florence, Focus Renewed On Insurance Requirements for Major Events
To file a claim, insurance must be bound prior to naming of hurricane or storm, for example. As Hurricane Florence bears down on the Southeastern U.S., dozens of events, including J. Cole’s Dreamville Festival near Raleigh, N.C., have been cancelled or postponed to a later date.
Who pays for the lost revenue and costs of events that have to be canceled because of catastrophic weather? If event producers have event cancellation insurance, then typically their insurance provider will cover losses, and in some cases, lost profits if event producers can prove the event was going to make money.
But in order to make a successful claim, it’s important the policy was purchased and bound in advance of impending weather, explains Paul Bassman, president and chief executive for Ascend insurance brokerage, which provides insurance for the entertainment industry.
“Once a hurricane or storm has been named, a cancellation policy is going to exclude that storm,” explains Bassman. Storms and hurricanes are named by the National Oceanic and Atmospheric Association’s (NOAA) National Hurricane Center in Miami.
“As long as you purchase your insurance prior to the storm becoming a named storm, you’ll have coverage under your cancellation policy for cancellation due to weather,” said Bassman, adding that those who wait too long could find themselves exposed to uninsured damages. “You can’t insure a house that’s on fire and you can’t insure a festival that’s already on the path of a hurricane.”
Hurricane Florence has led to the cancellation of dozens of concerts and sporting events as the coastal regions of North Carolina, South Carolina, Virginia and Georgia brace for the category 2 hurricane, which will likely make landfall later today (Sept. 13).
Officials with ScoreMore Shows, which is producing Dreamville this weekend in Raleigh, issued a statement Monday (Sept. 10) announcing the cancellation of the event.
“Our team has been working tirelessly with officials from the City of Raleigh, along with our State and Federal Partners, among others, to monitor the potential negative impact of Hurricane Florence,” the statement reads. “With the current weather-related information at hand, we have together decided to cancel this year’s event for the ultimate safety of both the local citizens and festival attendees. Rest assured, we are doing everything in our power to make this event happen at a later time and we hope to share details regarding a possible new event date as soon as we possibly can.”
Bassman said he assumed Dreamville had event insurance, though he didn’t know for sure.
“There’s two ways to cover your event,” he tells Billboard. “You can cover total expenses, which covers your production costs, labor costs, security costs and artists guarantees — basically your expenses. Or, if you’re pretty sure you’re going to make a profit, you can cover your revenue.”
In order to cover an event’s potential upside, organizers need to prove their profitability through ticket sales receipts and documentation on revenue from merchandise, concessions, parking, sponsorships and other revenue streams.
“Ideally, it’ll put you in the position that you would have been financially had the event occurred,” he says. “If you have a total loss, there’s still a huge amount of work that goes into making sure that you were actually going to make a profit. You can’t just declare revenue and then collect on it. You have to prove your loss and there’s a lot of adjusting and accounting that goes into proving the loss.”
Hurricane Florence is expected to be a major event for insurance companies across the state and a number of concerts and events are facing cancellation. SPARKcon, a creativity and arts festival presented by the Raleigh Visual Arts Exchange, has been rescheduled, as has 4U, A Symphonic Celebration of Prince at the Red Hat Amphitheater, which had been scheduled for Thursday (Sept. 13). That concert is being moved to Oct. 8.
Also cancelled is an upcoming concert by Jason Aldean scheduled for the Riverbend Music Center in Cincinnati, which is expecting flooding from the nearby Ohio River as a result of the hurricane. Alan Jackson rescheduled his Charlotte concert at the Spectrum Center on Sept. 15 “in consideration of fans’ safety and that of the touring crew and venue staff.” Charlotte’s two-day Soul Junction Music Festival was also canceled, as were a number of college football games, including a game between West Virginia and North Carolina State in Raleigh; the Blacksburg, Va. game between East Carolina and Virginia Tech; and the Chapel Hill, N.C. game between the University of Central Florida and the University of North Carolina. As of Tuesday, the UNC Chapel Hill campus was on hurricane watch.
Source: Billboard.com, August 13, 2018 | Author: Dave Brooks