When Does Event Cancellation Insurance Cover Losses from the Coronavirus?

Attorneys at a contingency fee law firm explain when policies may and may not cover event cancellations due to COVID-19.

Music, entertainment, sports, and many other events across the globe have been canceled as the coronavirus brings the world to a standstill. In Texas alone, South by Southwest and the rest of the Houston Roughnecks 2020 season are just some of the headline-capturing events to be canceled.

Dial down to local communities in Houston, TX, and across the U.S., and you’ll see everything from schools and churches to conference centers, fundraisers, and so much more becoming ghost towns. And several more cancellations and closures are expected to follow as authorities work to contain the virus.

While many are wondering when things will get back to “normal,” some also have questions about whether event cancellation policies will cover the losses caused by the coronavirus.

When an Event Cancellation Policy May Cover COVID-19 Losses

The language in an event cancellation policy dictates the extent of the coverage it provides—and whether that coverage includes losses for cancellations and closures caused by the coronavirus. In general, an event cancellation policy may cover these types of COVID-19 losses:

• If the optional coverage was obtained before January 2020: New event cancellation policies tend to contain COVID-19 exclusions. Before January 2020, however, some insurance companies were providing optional coverage for infectious diseases. Depending on the language in those policies, event organizers, venue owners, and/or others may be able to file claims, seeking compensation for coronavirus losses caused by cancellations and closures.
• Depending on the presence and/or nature of any “pandemic exclusion”: While the absence of this exclusion doesn’t automatically mean a policy covers COVID-19 losses, it’s presence doesn’t necessarily exclude coverage either. Again, the language matters, as events canceled due to the coronavirus may still be covered by policies with pandemic exclusions, depending on the language.

When successful, these types of claims can include compensation for losses like (but not limited to) lost:

• Ticket sales
• Merchandise sales
• Food and beverage sales
• Event marketing costs

Coronavirus Event Cancellation Claims: What You Need to Know

As COVID-19 continues to pull the plug on events and venues, knowing the following can be helpful when it’s time to file a claim.

• “All-cause” coverage doesn’t mean everything is covered: The definition of “all-cause” varies from policy to policy and from insurance company to insurance company. So, again, the details and language matter. Keep in mind that “all-cause” coverage generally applies to certain types of weather events, like hurricanes, and that it’s not uncommon for other events to be specifically excluded.
• Insurance companies are not looking out for you: They tend to be more interested in protecting the company profits and limiting payouts. That may, at times, involve the use of certain tactics to try to wrongly deny or undervalue claims. For an unsuspecting policyholder, that can cost them the compensation they need and deserve.
• How you submit your claim matters: Missing or wrong information, even mistakes and missed deadlines, can cause problems. Insurers may use these types of oversights as leverage to reduce or deny otherwise valid claims.
• An experienced lawyer can make a big difference in the outcome of a claim: The right attorney can help you anticipate and overcome the challenges that insurers may raise. This can be the key to bringing a claim to the best possible resolution efficiently as possible.

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1: According to the NY Times
2: Google I/O conference cancellation notice
3: According to Vox