In my opinion, Cancellation Insurance is one of the most complicated classes of Insurance currently marketed. When dealing with our professional clients, no two quotations are ever the same. What is the non-appearance risk? Is it only non-appearance of the star? Is the star understudied? Will people ask for their money back if the star doesn't perform? What about the rest of the cast? How many understudies are available? So you can begin to see that the deeper you dig into this very complex subject, the more confusing it can become.
Once we have ascertained what the non-appearance risk is, we then have to work out whether any other type of risk, such as non-availability of the venue, needs to be included in the wording.
When all the strands have been gathered together, we produce a draft wording for the Client and Insurer to consider.
You may be wondering why I'm telling you about the professional wording - well the answer is because an incident occurred recently on a claim for cancellation of an amateur event which has a bearing on both amateur and professional clients.
Consider the following facts. An amateur society has in force a First Night Policy, including the Cancellation Insurance Section. The renewal date is, say, 1st June 2015. On 1st May 2015 a fire occurs at the venue which completely destroys the theatre. The amateur society have to cancel the run of their show. But the performances are not due until July 2015, i.e. in the next period of Insurance. Will the Insurers pay? If not, do the Society have to renew the Policy first and then claim? Well they certainly can't do the latter because, if they did, the Insurers would repudiate the loss because they would say that there were known circumstances that would lead to a loss and therefore they wouldn't provide cover knowing that a claim would be made.
The answer is that the original Policy should respond as the incident leading to the loss has occurred during the period of Insurance, i.e. it is the date that triggers the loss that is all important. This is the way First Night would deal with the situation, but obviously I can't speak for any other Insurer.
There still seems to be a certain amount of confusion regarding "age" limits in the Insurance Policy.
We incorporate an age limit under the Personal Accident Section of our Policy - this has nothing whatsoever to do with the Liability Insurance Section.
It is not our intention to restrict membership of your society to the under 80's. I am acutely aware that many people aged in excess of this figure will want to be a part of your society. The point we make is that, for anyone over 80, the Personal Accident benefits will not be available. This is, in fact, in line with the overall Personal Accident Insurance market.
Also on this point, should a member make a claim under the Personal Accident Section, this does not prohibit them from claiming under the Liability Section. Furthermore, a judge will not take into account any payments received from a Personal Accident claim when granting a payment under a Liability claim. Always remember, however, that it is much easier to make a claim under the Personal Accident section than it is to make a successful Liability claim as you do not need to prove negligence.
Insurers may have, in the past, had a reputation of trying to elongate claims so they can hang on to the money longer, or hope that the litigant grows tired and goes away. Now I am not going to say that this hasn't gone on in the past, but in the modern era it is in the Insurers' interests to try and settle as quickly as possible because it will, in the long run, be cheaper. Additionally, Insurers are now subject to strict protocols in order to speed up claim settlements.
Finally, for this issue of Amateur Stage, I wish to draw your attention to the fact that I assume you are all now looking closely at your summer schedules. If you are performing outdoors, please be aware that a standard Insurance Policy will probably have included within it an exclusion, under both the Material Damage and Cancellation Insurance Sections, relating to property left in the open.
As a rough guide, you can expect the Material Damage Section to exclude Theft, Malicious Damage and Water Damage claims to property in the open.
As far as the Cancellation Section is concerned, the exclusion will probably refer to "weather related risks".
If any of these exclusions are a concern to you, I would suggest you speak to your Insurers to see if they can amend the wording in any way.
Of course, the most difficult problem will be the Cancellation Section would you give Weather Insurance for an outside performance in the UK in our summer? I'm not sure I would!