This type of insurance is not designed to cover disappointment per se should a special event not take place; but when disappointment comes as a result of an identifiable risk or exposure happening such as:
- Bad weather
- Accidents at the venue
- Accidents en route to the venue
- Key transport failures
- To the event
- For the event
- Leaving the event
Then the insurance reimburses the beneficiaries to the extent of the cost of arranging the event in part or in whole and can be particularly written to allow for increased costs in special circumstances such as lengthened delays in re-bookings.
In respect of individuals the biggest and most expensive special events are weddings and can vary from the cost of hire of marquee and catering in the UK to exotic weddings abroad.
However the principle of an indemnity for special event failure can be applied to any person, entity or business that can demonstrate and quantify an insurable interest in the failure.
For those companies whose business it is to arrange special events or who provide components an annual policy can be arranged [for most components that are consistent in the arrangements] in order to protect cash flow and income.
The indemnity limit is determined by individual costs of the events but maybe subject to a maximum set by the insurer who also usually imposes a modest excess.