Editor's Blog

12/09/2017
Hurricane Irma and the insurance question

Hurricane Irma tore through the Caribbean and Florida last week, leaving a trail of death and destruction in its wake.

It’s too early to say what the cost to the events industry in Florida will be, but the fact that more than six million people were ordered to evacuate their homes should be some indication of the size of the impact.

However, while the scale of the devastation was shocking, the fact is that it’s Atlantic hurricane season, so anyone organising events in the region should have had an inkling that this was at least a possibility.

Elizabeth Seeger, contingency underwriter at Hiscox, has been writing risk for 25 years. I asked her about what event organisers can expect if a hurricane turns up.

She said: “It’s been known about forever. We’ve been insuring against this sort of thing for the 30 years we’ve been in business. It doesn’t come as a surprise.

“Our first thought is the people involved, we don’t expect people to be on the phone to the insurer while they’re evacuating the state.

“Every policy will have a loss adjustor contact details, they should contact them in the first instance. If it’s possible they can postpone the event or relocate.”

“If it’s a summer fashion show, it doesn’t make sense to postpone it until November, as the show will be out of date by then. There will be a lot of pressure on the sporting events as well, it really depends on how the schedule is looking for the rest of the season.

Seagar added that the fact of the whole of Florida being evacuated made Irma one of the biggest hurricanes in living memory.

“In 25 years I’ve been rating risk, it’s the first time I can remember that they’ve closed the state,” she said. “We’ve had terrible situations before but usually just confined to one city. Florida is a very popular venue with event organisers, for obvious reasons, and there will be a lot of events impacted."

And she also shared her advice with event organisers looking to work in a hurricane zone

She said: “My tip for event organisers would be to buy your policy early. If you’re looking at an event in November you may think you no longer need hurricane cover as it’s out of season – but the fact is it may still be severely impacted. You’ve got to bear in mind the knock-on effects, so it’s always best to protect your risk in known risk areas.”

Last year, Hiscox Event Insurance estimated that around three quarters of event organisers fail to organise sufficient cancellation cover – something that Seagar said is still a source of amazement.

“Irma has shown exactly how risky organising an event can be," she said. "For the cost of a basic policy you can be covered against it, but we’re always really surprised that people are willing to run that risk.

“If something hits the headlines then that will put it in people’s minds and we will see an increase. But it usually takes headline news before people take action. And once it’s out of the headlines, you see levels drop off again.”



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