Special Event and Travel Cancellation Risks

The beginning of the new millennium will beevents, which should have caused people to
remembered as one of the worst times for eventunderstand the need to protect their investments.
organizers world-wide. A sequence of disastrousAlthough rates in the past decades have been quite
events caused hundreds of thousands tourists toreasonable, most prospective customers did not
cancel their holidays. Weddings, family events,purchase any kind of protection. The saying, "It won't
children's summer camps, and thousands ofhappen to me," led millions of travelers all around the
commercial events and conventions were cancelled.world to refrain from purchasing travel insurance (or
Hurricanes, earthquakes, tsunamis, terror attacksto ensure that their cover includes a Cancellation
caused not only direct vast damages but alsoClause), which resulted in somewhat higher premium
collateral damage to millions of individuals andrates, as the spread of risk was smaller than the
businesses.potential. Most of those organizing events - private or
The resulting financial damage is huge. Empty hotels,commercial - ignored history, and smiled when nothing
lost deposits, travel agencies with no income, airlinershappened and the event was over. For those who
that fly almost empty, lost income to wholesalers,saw the risk materialize, no smile could help.
organizers and many individuals - and the list goes on.The insurance market can only offer the products. It
The estimated losses are stated in billions of dollarscannot purchase them instead of the at-risk
(according to the publications of the numerouscustomers. However, it is important to elevate the
insurance companies).level of awareness in the general public, to ensure
This scenario is familiar to the insurance industry:better protection to the public.
those companies who write Travel Insurance thatThe big numbers look a bit remote from the individual
includes a Cancellation Fees Clause; those who writewhose story is the wedding reception of his son or
Special Events with Cancellation Fees Clauses; anddaughter, and whose relatively small deposits for the
those insurance companies who write Politicalreception hall and the caterers are now lost. An
Coverage (many of which are state-ownedadditional average expense of $100 could now save
organizations).this money, and ensure his ability to celebrate the
Although this scenario is well-known, the actual lossoccasion at a later date.
sustained by the insurance industry is by far lowerThe small stories are those that should alert you, the
than the actual loss sustained by the tourismreader - personally or as an insurance broker or agent
industry, the canceling individuals and many others.- to ensure that next time, you will not be caught
The reason is Awareness.without protection.
In the past century the world witnessed many