Event Protection Basics: Weather Insurance vs. Event Cancellation Insurance

Now more than ever, there is revitalized importance in insuring your event and investment against postponement, cancellation, or other unexpected occurrences. In light of a global pandemic, there is increased discussion about event cancellation insurance. Major music festivals such as Coachella and South by Southwest (SXSW) were canceled in response to COVID-19 and could have benefitted from having this insurance in place when they started the planning process.

Policyholders who secured event cancellation insurance before January 2020 may have purchased optional coverage for cancellations due to diseases like COVID-19. It has been reported that such coverage is no longer offered, and, in fact, many insurance companies are including specific coronavirus exclusions in newly issued event cancellation policies. The best way to know what your insurance coverage includes is to review your policy terms with a professional.

Before you look to cancelation insurance as your catch-all risk management solution, consider the difference between weather insurance and event cancelation insurance. It’s important to understand what’s included (and what isn’t) in both types of insurance, so you know how to protect your event no matter what challenges arise. Vortex Weather Insurance believes in making things easy to help keep your business moving–and helping you stay informed is at the top of that list.

What Is Weather Insurance?

Weather insurance can help to protect your business or your event from decreased sales or increased expenses due to adverse weather and is an essential part of a complete weather risk plan. A weather insurance policy serves to help protect your bottom line from an adverse weather event, not as a cancellation policy, but to provide peace of mind no matter what the clouds hold. Vortex tailors each weather insurance policy to fit your business’ specific risk and concern. We build policies for rain, snow, high and low temperatures, or any combination of measurable weather elements with duration, coverage, limit, payout structure, and triggering events customized to your needs. Unlike event cancellation insurance, your policy can trigger even if your event can continue.

Weather protection generally falls into two categories: one-time events and long-term solutions. If you aren’t sure which length of coverage you need, contact us for help. If the conditions of your policy are met, your claim is typically resolved with payment sent within two weeks–no lengthy paperwork, proof of loss, or adjusters required.

What Is Event Cancellation Insurance?

Event cancellation insurance protects your event-related revenue or expenses against cancellation due to circumstances beyond your control. Your policy’s conditions are met only if the event is canceled, and then cancellation insurance typically pays when the insured can prove a covered catastrophic or uncommon event has occurred. Weather events are included in some cancellation policies (in some cases, it’s extra coverage that has to be added). Event cancellation insurance does not protect against common types of adverse weather. That’s not how event cancelation insurance works.

For event cancelation insurance, policy conditions are not met if it rains during an entire concert, but the band can still play. Or if rain causes a long event delay during the day that results in an evening performance after many patrons have already left, your policy won’t be triggered. Also, event cancellation insurance may only cover bills already paid (like non-refundable deposits), not perceived sales, increased expenses, or loss of revenue due to adverse weather.

What Does Weather Insurance Cover?

Vortex tailors the duration of coverage and limits to your event’s needs. Policies can help cover a few hours, a few seasons, and beyond with our creative solutions. We account for event geography, time of day, time of year, and historical data to help you determine the policy that is right for you.

• Hourly event coverage: Outdoor events have multiple revenue-generating events worth protecting during certain hours of the day, like entertainers, concerts, and evening fireworks. We’ll help you pinpoint hourly event coverage that’s right for you.
• Multi-event coverage: A short-term weather insurance policy can cover a concert series, carnival, or events on an important weekend or holiday. For example, fair organizers may need a policy from 10 am to 1 pm for pig races and again from 6 pm to 10 pm to cover a sold-out concert. We’ll help you choose a long-term solution that mitigates risk and supports the success of your business during various hourly windows.
• Seasonal coverage: Does your business organize multiple events throughout the year? If so, a seasonal weather insurance policy may be right for you. We’ll work with you to identify relevant weather variables during a given time period, then build a weather insurance policy that helps protect your business against lost revenue.
• Rain insurance: Even if it lets up during your event, rainfall in the hours leading up to open hours can have a significant impact on its success. When the morning’s weather isn’t ideal, people may stay home, and walk-up revenue suffers. Our rain insurance policies can help to stabilize your revenue against the uncontrollable and unexpected by the hour, day, or season.
• Excessive temperature insurance: When the heat rises outside, crowds tend to stay inside or head to the pool. If attendees can see their breath, they’ll likely hibernate someplace warm. Neither of those scenarios favors your outdoor fairground event–but we can write a policy that does.

Weather Insurance vs. Event Cancellation

Our priority is the success of your business. We want you to feel confident in knowing if event cancellation insurance or weather insurance is right for your event–that’s why we’ve put together an easy-to-follow guide to compare the two.

	Pros	Cons
Weather insurance	Insurance typically more likely to trigger Simple and automatic claims process Defined coverage limits are paid in full (not indemnity based) Highly customizable Doesn’t require proof of loss	Length of coverage window must be determined by the insured Probability of occurrence is typically higher; thus the premium is typically higher Only covers weather-related incidents
Event cancellation insurance	Typically less expensive Typically covers 24+ hours of the event Covers a wide variety of catastrophic cancellations	Burden of proof of loss falls on the insured Probability of occurrence is typically lower Limited on customizations Certain insured perils may be excluded depending upon when the policy is purchased

The Bottom Line

While it seems the topic of conversation amongst the event industry is event cancellation insurance, it’s not a one-size-fits-all type solution for event planners. When planning an event, it’s important to consider every factor that may impact your business and its revenue. We pair knowledge and tools from experienced meteorologists with our seasoned weather team to develop diverse options tailored to your event’s specific needs. Together we help you understand both weather and insurance, so you have the insight to minimize your financial risks.

Talk with us today about how weather insurance protects the reputation of your events, no matter what life brings.