“I have never heard of a meeting organizer suing its event cancellation insurance company,” said meeting and hospitality industry attorney Joshua L. Grimes, Esq., Grimes Law Offices, LLC, when asked by MeetingsNet to comment on the case. “Cancellation itself is rare, and when it happens, it is usually apparent from the policy documents whether the insurance is applicable. And in the event disputes arise, the planner and insurer are usually able to settle their differences amicably.”

Grimes added, “the coverage depends on the specific wording in the insurance policy, which is not easily analyzed. But since most lawsuits settle at some point, I would say it is likely that the parties will agree to some resolution before the case goes to trial and a decision is rendered.”

While not associated with the case, Grimes reviewed the court record, and commented on how the association might have better protected itself. “I have not seen the event contract, but the organizer should have included a force majeure or ‘excuse of performance’ clause covering the contingency of a government shutdown. The organizer knew or should have known that a shutdown was possible since it happened several years ago, and has been threatened several times since,” said Grimes.

“And in the event of a shutdown, it would become likely that government employees would not be able to pay for their travel. So language could have been incorporated into the contract allowing for cancellation of the event without liability to the organizer if a shutdown happened. This would have been the best way for the organizer to plan for a shutdown, and in the future this meeting organizer and others should consider including such a clause in their event contracts.

“This did not appear to be a force majeure event allowing for cancellation without liability under the laws of most states,” added Grimes, “as it was not illegal or impossible for the event to go forward. Among other things, to my knowledge it was not impossible or illegal for military or government personnel to travel because of the shutdown; rather, they chose not to do so because the government would not cover the cost of their travel and/or they probably wouldn't be paid for their time. Presumably, the officials could have traveled at their own expense, or the expense of the organizers, and they would not have run afoul of the law for attending the event.

“Further, from a cursory review of the insurance policy, it appears that the event organizer didn't do everything it should have done to protect its interests. The policy included a clause that allowed the organizer to identify ‘key’ speakers without whose attendance the event couldn't go forward. From the information available in the court record, it appears that the organizer failed to identify the government officials who couldn't attend due to the shutdown as key attendees, so their absence didn't require the insurer to offer compensation. This underscores the need of event organizers to secure event cancellation insurance, and to read the policies carefully so they can be called upon to compensate if a cancellation becomes necessary.”