Some of the most utilized coverage options for this class include:
Cancellation of Events
Protects loss of revenue for an event cancelled due to adverse weather, earthquake, damage to venue, terrorist threats, communicable disease, etc. A few examples follow:
Professional sports franchise averages over $10 million of net revenue for each home game. Cancellation of event insurance was purchased to cover a variety of perils / potential losses with a maximum $3 million per game benefit and no deductible. During the season, the team lost 2 home games due to a significant storm that left its site unsafe for hosting, requiring the teams to play at another team's home stadium. This insurance policy repaid the team $6 million for lost revenue as a result of the games being relocated.
Professional sports franchise averages over $10 million of net revenue for each home game. Cancellation of event insurance was purchased to cover a variety of perils / potential losses with a maximum $2.5 million per game benefit and no deductible. During the season, the team's home city was hit by a blizzard two days before its next scheduled home game. Rather than moving the game, the team incurred $1 million of emergency clean-up costs (on top of normal stadium preparations) to get the stadium / field ready to play. This insurance policy repaid the team $1 million for the additional costs incurred.
Professional sports franchise schedules a three game exhibition series with another franchise before their regular season begins. Per the teams' agreement covering the exhibition series, the visiting team will receive either an agreed percentage of ticket / concession revenue or a flat fee of $100,000 per game if any games are cancelled due to inclement weather. The home franchise purchased cancellation of event insurance to cover the guaranteed fee, for which the policy paid out $200k as two of the three games were rained out.
A Texas high school conference purchases cancellation of event insurance for each of its 12 member schools' football games which typically net in excess of $250,000 of ticket and concession revenue. The policy covers a variety of perils / potential losses with a maximum $100k per game benefit and a three-game deductible. During the season, a series of tornadoes wiped out two weekends of football entirely, resulting in 12 games being completely cancelled. This insurance policy repaid the high school conference $900k for lost revenue as a result of the games being cancelled (12 games minus 3 game deductible; 9 games paid at $100k each).
Prize Indemnity Coverage
Insures the financial obligation of an entity sponsoring a unique promotion at an event (e.g. prize money awarded for a hole-in-one, half-court shot made, etc.) or tied to a specific occurrence or milestone reached (e.g. sport contract bonuses).
If you don't see what you're looking for, or are unsure of any of the coverage options above, please contact us and we'll be happy to help you find the right solution!