April 01, 2020
The event cancellation/contingency market is suffering enormous losses as a result of major events around the globe being canceled due to COVID-19. Total losses are currently estimated to be between $5B and $10B.
Coverage purchased prior to the pandemic will likely include coverage for communicable disease. After cancelling most events for April and May, organizations are now cancelling events in June and July, including the 2020 Olympics, which are postponed until 2021. Carrier responses to requests for quotations are delayed due to the volume of claims being processed by the market at this time.
Quotes for coverage on events scheduled for this fall and later are coming in, with exclusions for communicable disease, on accounts where it was normally offered and purchased.
Carriers will need to re-evaluate how they underwrite communicable disease going forward. A recent coverage quote offered a small sublimit for communicable disease (excluding the coronavirus) but at a prohibitive rate. It is advisable for clients to insure their events as soon as possible as the market conditions will likely continue to worsen. Underwriters will take a closer look at all of the perils being offered under a broad event cancellation policy. Insureds can expect higher rates and stricter terms in the near future.