Insurance is one of those aspects of event planning that rarely generates excitement but can determine whether an event happens at all. Over the past few years, the cost of insuring events in the UK has risen sharply, and the implications for the industry are significant. For some organisers, insurance has gone from a routine expense to a potentially existential one.
What has changed
The event insurance market has been tightening for several years, driven by a combination of factors. The pandemic was a watershed moment. The massive volume of cancellation claims in 2020 and 2021 caused significant losses for insurers, leading many to reassess their appetite for event risk. Some withdrew from the market entirely, reducing competition and driving up prices for those that remained.
Even as the pandemic receded, premiums have not returned to pre-2020 levels. Insurers have become more cautious, imposing higher premiums, larger excesses, and more restrictive terms. Communicable disease exclusions -- unheard of before 2020 -- have become standard in many event insurance policies.
Beyond the pandemic, insurers are also pricing in other evolving risks. Climate change is increasing the frequency and severity of weather-related claims. The terrorism risk, while difficult to quantify, remains a concern for large public events. And the general trend of increasing claims costs -- driven by higher medical expenses, legal fees, and compensation awards -- is pushing premiums upward across the insurance market.
The impact on events
The most direct impact of rising insurance costs is on the financial viability of events. For large events with significant budgets, increased premiums are an unwelcome but manageable expense. For smaller events operating on thin margins, they can be the difference between profit and loss -- or between going ahead and cancelling.
Anecdotally, many smaller event organisers report that insurance costs have doubled or even tripled since 2019. For a community festival with a total budget of ten thousand pounds, an insurance bill of two or three thousand pounds represents a significant proportion of total costs. Some have responded by reducing the scope of their events, eliminating higher-risk activities, or in the worst cases, ceasing to operate altogether.
The types of events that are offered are also being affected. Activities perceived as higher risk -- fairground rides, adventure experiences, certain types of sporting events -- may face particularly steep premiums or difficulty obtaining coverage at all. This could lead to a homogenisation of the events landscape, with organisers gravitating towards lower-risk formats to keep insurance costs manageable.
The coverage gap
One of the most concerning developments is the emergence of coverage gaps -- situations where event organisers cannot obtain the insurance they need at any price. This is particularly acute in certain categories, such as terrorism insurance for smaller events, communicable disease coverage, and liability insurance for events involving unusual activities or novel technologies.
The government's live events reinsurance scheme, introduced during the pandemic to underwrite cancellation risk, demonstrated that public intervention can be effective in addressing market failures in event insurance. Whether similar interventions might be needed in the future -- for climate-related risks or terrorism, for example -- is a question that policymakers may need to consider.
Risk management as response
In response to rising insurance costs, many event organisers are investing more heavily in risk management. Comprehensive risk assessments, detailed safety plans, professional security and medical provision, and documented compliance with industry standards can all help to reduce premiums -- or at least prevent them from rising further.
Insurers reward organisers who can demonstrate strong risk management practices. This creates a virtuous cycle: better risk management leads to lower premiums, which frees up budget for further investment in safety and quality. However, the upfront investment in risk management can be challenging for smaller organisers with limited resources.
Some organisers are also exploring alternative risk transfer mechanisms. Group buying schemes, where multiple events share a single policy, can reduce per-event costs. Captive insurance arrangements, where industry bodies or groups of organisers create their own insurance vehicles, could provide another option, though these are complex to establish and manage.
What the future might hold
The event insurance market is unlikely to return to the relatively soft conditions that prevailed before the pandemic. The risks that have driven recent premium increases -- climate change, terrorism, pandemics -- are not going away, and insurers are likely to continue pricing them into their products.
However, there are reasons for cautious optimism. As the market stabilises and new entrants emerge, competitive pressure may moderate premium increases. Advances in data analytics could allow insurers to price risk more accurately, potentially benefiting well-run events with strong safety records. And government intervention, if the market fails to provide adequate coverage for certain risks, remains an option.
For event organisers, the message is clear: insurance is no longer a commodity to be bought at the cheapest price and forgotten about. It is a strategic consideration that needs to be factored into event planning from the earliest stages. Understanding the insurance market, investing in risk management, and building strong relationships with brokers and insurers are all essential skills for the modern event organiser.
The events industry is resilient and adaptable. It has navigated challenges far more dramatic than rising insurance costs. But addressing this particular challenge requires awareness, planning, and a willingness to invest in the unglamorous but essential work of managing risk.
