EDGY MEETING planners might think about cancellation insurance. But they might think twice if they expect it to cover some of the current challenges to successful meetings and incentives.

“The biggest misunderstanding about meeting cancellation insurance is that it only covers cancellations due to causes beyond the parties' control,” says Tyra Hilliard, Esq., CMP, a Washington, D.C.-based attorney. “If you have to cancel because of low pickup or because your executive director wants to hold a meeting somewhere else, you're not covered. If there's a tornado or the airlines are grounded, you're probably covered.”

One of the biggest concerns these days is the potential negative impact of terrorism on a meeting or incentive trip. Before September 11, 2001, policies didn't even mention acts of terror as causes for a claim. The huge losses related to that day resulted in many carriers excluding the effect of terrorism on an event's viability. But federal legislation signed in late 2002 requires property and casualty providers to offer full terrorism coverage.

Naturally, that kind of coverage comes with a hefty price tag. Eileen Hoffman, program manager for AON Association Services in Washington, D.C. says the carrier she represents offers three types of terrorist coverage for meetings and incentives: the option to decline terrorist coverage completely; reimbursement for 50 percent of losses with a limit of $250,000; and full coverage. For an event to qualify, the terrorist attack must have occurred with 25 miles of the venue no more than a month before the event.

Hoffman says carriers evaluate a number of factors when pricing a policy, including the location, time of year, and budget or revenue projection for the event. A meeting in Miami during hurricane season, for example, will cost more to insure than the same meeting in Kansas.

Planners shouldn't expect a bailout simply because of a war or the outbreak of a disease such as SARS. War is excluded across the board, unless it causes a disruption in airline service, for instance, and attendees can't reach the destination. “Fear of travel is not covered,” Hoffman notes. Neither is attrition due to lack of interest in a program.

In April, some insurers began specifically excluding SARS virus coverage for conventions and events. “As soon as the insurance companies specifically exclude it, the coverage absolutely disappears,” says Hilliard. “Meeting planners still have a duty to minimize the risk to attendees, but they will now have to weigh the financial risk of cancellation against the health risks to their attendees.”

Besides what is covered — and excluded — expected losses are probably the most important consideration in deciding whether a policy makes sense. “A $5,000 premium for a policy is too much if the organization stands to lose only $1,500 if the event isn't held,” Hilliard says.

Cancellation Insurance Providers:

Showstoppers Association Event Cancellation Insurance
Aon Association Services
www.asae-aon.com, http://www.asae-aon.com/
(800) 424-8830 ext. 333; Contact: Eileen Hoffman

ExpoplusCCI
Seabury & Smith
www.expoplus.net, http://www.expoplus.net/
(800) 323-2106, ext. 34271; Contact: Paulette Norman

Event Savers
Rust Insurance Agency Inc.
www.rustinsurance.com, http://www.rustinsurance.com/
(800) 235-1889; Contact: Michelle Holmes or Laura Johnson

Visit our Web site for up-to-the-minute reports on how war and SARS could affect your meetings — the latest on cancellation insurance, attrition, security, risk management, contingency planning, and more. http://warimpact.meetingsnet.com