As ticketing platforms change with market forces, we are seeing more and more product ideas being added to the ticket product itself. The insurance enhancements have primarily been ‘borrowed’ by the travel business world to increase end user control, reduce event organisers’ costs and to provide a new line of income.
There are two products currently available in the insurance market: inability to attend insurance (ITA) and event cancellation for ticket holders.
Inability to Attend (ITA) Refund Schemes
When customers buy tickets for events, the ticket purchase will usually include refund terms. Generally, if the event is cancelled – for example, due to an unavoidable closure of the venue – the customer will receive a full refund for their ticket from the venue. However, if the customer has purchased their ticket or tickets and is unable to attend for personal reasons and the event still takes place, there is typically no responsibility on the venue to refund that outlay.
This is where ITA has become increasingly popular. ITA insurance picks up the liability for refunding the customer if they are unable to attend the event, for a selection of named reasons beyond their control. This enables the venue to provide a safety net for customers who have invested in tickets, but miss out of the experience through no fault of their own.
Examples of the perils typically covered by ITA includes;
- Death, accident, injury or sickness of the ticket holders
- Travel delay due to mechanical breakdown or accidental damage to transport
- Adverse weather preventing travel to the venue
- Jury service preventing the attendance or a ticket holder(s)
- Damage to the ticket holder(s) home requiring them to stay at home and miss the event
- If the event has been postponed and rescheduled for another date that the ticket holder cannot make they will also be refunded
Cancellation ticket scheme
The cancellation ticket scheme is a rapidly growing event protection business through its core distribution channel of providing event cancellation insurance on a transactional basis to ticket agents, venues, events and sports teams. This opportunity exists to create a new channel of business through further adaption and utilisation of a ticketing platform to act as a sales and distribution tool for cancellation insurance with a focus on events.
Typical clients for event cancellation insurance are event organisers, promoters, sponsors and talent agents. Brokers service their event clients through placement of risks, both one-off and annual. The policies range from public liability insurance, employer’s liability, professional indemnity and cyber event equipment covers as well as event cancellation insurance. The event insurance premiums are usually in the form of an upfront lump sum payment.
If the event is cancelled for a reason which is covered under the ticket policy, the client would normally pay a claim back to the ticket holder via their event cancellation policy. In this case, the individual ticket holder will make an online claim direct to the ticket insurer.
This form of cover removes the needs for event organisers to put cancellation on their own P&L for ticket revenue, therefore reducing their premium spend. Placing the cover direct on to the ticket holder generates a new income stream through the ticketing platform.
James Davies is the global head of sport at Robertson Taylor, part of the Integro Group.