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Earlier this year, the eruption of an unknown Icelandic volcano brought Europe to a standstill. Eve Pertile asks what the event industry has learnt from the ash cloud crisis
Until now, the
phrase ‘force majeure’ or ‘act of god’ has always lurked somewhere in the fine print of insurance policies – blissfully far from the mind of anyone booking foreign travel. However, the recent
eruption of Iceland’s Eyjafjallajökull (the curse of tongue-tied newsreaders the world over) and the ensuing Europe-wide flight ban has thrust it very much into our consciousness. It’s a wake-up
call that has cost the UK economy an estimated £500m, while Eventia members reported that around 65% of their events that week were cancelled or deferred.
WorldEvents, a global event management company is one organiser whose events in Europe went ahead. ‘We’ve got an in-house travel department and a 24/7 duty officer system so there’s always someone watching the situation,’ says Andy Tattersall, group operations director. ‘As soon as anything starts going astray, we can put contingency plans in place.’
Planning might avert disastrous consequences, but it’s a robust communication strategy that will see you through if the worst does happen. ‘The worst thing is the information vacuum,’ says Tattersall. ‘If you are stuck at airports for 24 hours with large groups of delegates; at least tell people what you know.’
The natural reaction is for organisers to turn to event cancellation insurance for peace of mind. However, once the volcanic activity became a ‘known circumstance’, insurers wouldn’t provide cover for policies purchased after 15 April – standard insurance industry practice. ‘It is almost like insuring a burning building,’ explains Martin Linfield, underwriting manager at Hiscox Event Insurance.
However, this is not the end of the story. As we go to press, Aviva, the country’s largest insurer, is launching a new add-on to holiday insurance policies from 1 June to cover delays and cancellations as a result of the eruptions. If there’s no further volcanic activity over the next few weeks, business insurance is likely to follow suit, though insurers remain characteristically cautious. ‘Insurers will now look at offering cover on a case-by-case basis,’ says Linfield. ‘We’ll consider an organiser’s contingency plans closely.’ Savvy organisers who cost up a contingency plan might secure lower premiums. ‘Underwriters are paying for people to go via a different route to keep the event alive. It’s cheaper to do this than pay out for cancellation,’ says Terry Waller, MD of specialist event insurer Arc International.
So, what has the industry learnt? Quite simply, the companies that came off best started with crisis management measures in place and tackled the situation through good communication on the ground. The lesson? Be wise before, not after, the event.
This article first appeared in Square Meal Venues & Events magazine, summer 2010