Mitigating Modern Risks in the World of Association Event Planning

21st November 2023

Association event planners face an ever-evolving landscape of risks that now go far beyond the traditional concerns of event cancellations and physical incidents. The modern world is teeming with technological advancements, making cyber-attacks a real and growing threat to associations. We consider the critical importance of insurance in mitigating these risks and offer insights to help association event planners protect their events and organisations.

Words Martin Linfield, Divisional Director, James Hallam Insurance Brokers

The economic turmoil caused by the COVID-19 pandemic forced many associations to adapt quickly. They changed their business activities, witnessed fluctuations in turnover, and experienced shifts in their workforce. Unfortunately, this dynamic environment has left some associations underinsured or completely uninsured for certain challenges. It’s therefore crucial for associations to regularly review their insurance needs and make adjustments to align with a changing world.

In fact, in the digital age, the risk of a cyber-attack is as prevalent as the risk of a physical disaster and it is now probably as likely that an association will suffer a cyber-attack as an office premises physically suffering a fire, flood or being broken into. Most companies have commercial office insurance to protect against fire, business interruption or theft but surprisingly, the majority of associations lack the protection provided by cyber insurance.

Associations, like any other business, rely heavily on technology, from member data storage and email systems to digital registration platforms. Cyber-attacks come in various forms, such as ransomware attacks, phishing schemes, and impersonation scams. The financial and reputational damage from a successful cyber-attack can be devastating, which is why it is important to understand and protect against such risks.

Cyber insurance offers coverage against the financial fallout of a cyber-attack, providing resources to recover and respond to incidents. It can cover the costs of hiring forensic IT specialists, legal fees, and even the payment of ransoms in certain cases. However, the need to protect goes even further – to include third party suppliers.  Whether in the office or on-site at an event, attacks can come through the companies brought in to support an association, it is therefore vital to ensure that they not only have the right technical protection, but also relevant insurance.

Risks however go beyond the obvious when it comes to digital challenges.  As associations have become more digitally oriented, they have also become susceptible to new forms of litigation. Online activities, such as webinars and digital content, increase the risk of legal disputes, including copyright infringement, libel, slander, and licensing issues. A speaker’s controversial statement during a web chat or unauthorised use of images for example can lead to costly legal battles.

Professional indemnity insurance is designed to protect associations from these potential legal pitfalls. It provides coverage for legal defence costs and settlement fees, ensuring that associations can navigate the legal landscape without draining their financial resources.

Another area where many organisations are finding themselves underinsured is public liability.  As the global economy has shifted over recent years so has the costs associated with supporting individuals through hardship following a tragedy.  Hospital bills have increased, inflation continues to rise, as has the cost of living, consequently the level of cover needed has also gone up.  It is easy to assume that accidents and liability claims won’t happen, but they do, and the stakes are higher than ever. Inflation and the increasing cost of living have led to higher compensation demands in injury claims. 

Climate change, so often a key subject talked about by many associations is also having an impact on the events they run.  As climate change continues to influence extreme weather patterns, the risk of such disruptions remains a constant concern – whether it is recent examples of extreme heat, rain, the 2020 “Beast from the East”, such weather can lead to event cancellations or disruptions, resulting in financial losses due to refunds to fee-paying attendees.  The 2010 volcanic ash cloud was another great example.  In all these cases, event cancellation insurance provides a safety net. It covers the financial losses incurred due to unforeseen circumstances or significant disruptions. Depending on the policy and level of cover, such insurance can recoup the costs of non-refundable deposits, marketing expenses, and lost revenue.

Ultimately, associations and their event planners operate in a dynamic and fast-paced environment, with a multitude of risks to navigate. In the digital age, cyber threats have become as significant as physical risks, making cyber insurance a necessity. Public liability insurance, professional indemnity insurance, and event cancellation insurance also play pivotal roles in protection from unforeseen events and legal challenges.

To effectively manage these risks, association event planners must regularly review their insurance policies, stay informed about the changing landscape of liabilities, and work with insurance experts to tailor coverage to their unique needs. In a world of ever-present risks, a robust insurance strategy is the foundation for a successful and secure association.

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