BUSINESS Perspectives Avoid a Financial Washout
Don’t let your event get caught in the rain without insurance By Robert Weber
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inally, all the puzzle pieces you’ve worked so hard and long to assemble are in place. The elusive talent has been buttoned up, the hotspot venue has been booked and your advertising campaign has created the necessary buzz. Every detail of your event has been choreographed, checked and rechecked. You think you have all the bases covered. Nothing can go wrong — until it does. The only thing that you couldn’t control happens. All your careful plans are ruined and your event is decimated financially. You can’t control the weather, but you can protect yourself from the devastating loss and anxiety rain inflicts on you and your business. What could you have done differently? You should have purchased rain insurance.
happen is that the agreed threshold for rain accumulates during the specified time period. The event does not have to be cancelled. There is no proof of loss required to pay a claim. In most other types of insurance, deductibles (in dollar amounts) are used to lower premium costs without losing much coverage; rain insurance allows you to use deductible days for the same reason. Let’s say an event planner needs a rain insurance policy to cover her entire weeklong local event. After careful calculations and consideration, she feels she can still turn a profit even if there was a Rain can ruin outdoor events. When complete rainout one day that week, which caused a full day’s loss of revenue. weather interrupts an event, you She believes that since What Is Rain Insurance? her customers know the suffer a loss in walk-up revenue. Rain insurance provides monetary protection event spans the entire for event organizers in those circumstances week, if there is one day when rain interrupts or adversely affects their scheduled of rain, they will just come on another of the remaining six functions. These insurance policies can shield you from days. If this event planner’s seven-day policy was written any type of loss incurred. Your payout can cover you with a one-day deductible, it would pay her for every from the loss of your perceived potential profits, to any additional day it rained (that met the insured threshold), other tangible expenses that may be related to the starting with the second rainy day. interruption or interference of your event. Unlike other Although premiums are typically lower the further insurance products, a rain insurance policy will pay you in advance they are contracted, policies must be any dollar amount you were contracted for, with no purchased at least two weeks prior to the event. This questions asked. is due to the availability of weather forecasts as it gets Rain insurance is based on your predetermined closer to the event. amount of rainfall accumulating over a number of Rain can ruin outdoor events. When weather predetermined hours. For instance, if you have planned interrupts an event, you suffer a loss in walk-up revenue, a three-hour outdoor event that would be ruined by a as fewer people attend. In addition, you will lose out on drizzle, you would select for your policy a small amount the expenses for promoting, renting equipment, hiring of rain such as 0.10 (1/10) inch. That amount would have personnel and so forth. Rain insurance will compensate to accumulate over your three-hour event for you to for all of these forms of losses. Cost for such policies satisfy the terms of your contract. The more hours you varies depending on the location, deductible days and insure, the higher the rate, so it’s important to choose timing of the event. the most critical hours that will most directly affect the There are many factors that go into setting up a rain success of the event. insurance policy correctly. Only use a company that Let’s illustrate this concept with another example: If specializes in this type of insurance. Otherwise, you there was an event scheduled from 10 a.m. to 5 p.m., you might end up paying for a policy that does not provide might decide to start protection at 9 a.m., an hour prior you with the proper protection. to start time, and end coverage at 3 p.m. The earlier Robert Weber is founder and CEO of Rainprotection.net, and is a hours are usually more important than the later hours, member of the Weather Risk Management Association. Robert as that is when people are deciding whether or not to has worked with the CME developing their rain derivatives, and attend. Furthermore, by 3 p.m., most if not all potential has been profiled in the Wall Street Journal. Rainprotection is revenue for this event would have been collected. among the insurance industry’s leading providers of specialty Based on a few factors, with one being the amount event insurance products, including: event cancellation, event of hours the insured wants covered, a proper rain organizer, exhibitor, tenant user, prize indemnity/promotion and threshold is chosen. The dollar amount you insure is weather insurance. Robert can be reached by email at the full amount you will get paid. All that needs to Robert@rainprotection.net. 10
2012 Facilities & Event Management SuperBook