Cancelling superstars need cover
9 October 2007
When superstars fail to turn up to public appearances events can fail spectacularly. Often keynote speakers are considered the linchpin of major events. Imagine the scene: after six months of preparation the conference will be underway in 12 hours. The venue has been booked, caterers arranged and delegates are attending in their thousands to see a dynamic and inspiring keynote speaker. Then, with just hours to go, the star speaker pulls out and there is no-one to replace him.
Musical divas such as Amy Winehouse and Lily Allen have previously gained notoriety after cancelling concerts. US rap star 50 Cent recently cancelled a European tour due to schedule conflicts, although he is now in the process of setting new dates. Even former US president Bill Clinton has been known to pull out at the last minute due to illness. And the costs of cancelling can be huge, says Lizzy Seeger, a contingency underwriter with Hiscox.
“If the organisers are relying on one single person to make an appearance in order to attract the audience and that person just decides not to show without reason, the organiser could claim back the appearance fee from that individual,” she explains. “What they can’t do without cancellation cover is claim back money spent on hire of the venue, caterers and ticket refund - there are also reputational issues.”
Seeger says underwriters would expect to consider the celebrity’s history of non-appearance in the underwriting criteria, as well as how dependent the entire event is on the star’s appearance. Seeger said: “Taking Amy Winehouse as an example, she may be booked to present an award at a music ceremony. What is the likelihood of the event being cancelled because she fails to show?”
If the star has a history of cancelling events because of drink and drug related problems, she says, certain exclusions may be applied. “There are syndicates which would look very carefully [at the claim],” says Seeger. “They would look at the star’s history, and assess whether it was their fault for the no-show. If it was, then it is unlikely they would be covered.”
However, she adds, some Lloyd’s syndicates would take on ‘high risk individuals’. “Lloyd’s is definitely a leader in the market for this style of cover,” Seeger says. “There are certain complexities with underwriting cancellation risks for high risk individuals for which Lloyd’s has particular expertise.”
In times of crisis the public relations company is usually on hand to help things run more smoothly. However, things can go wrong, even for the experts. And when they go drastically wrong professional indemnity cover can save PR firms from loss of earnings and help protect the company’s reputation. “Public relations firms acting on behalf of events organisers should consider what level of professional indemnity cover is right for them,” says Seeger. “This can give peace of mind.”
As celebrity status becomes ever more central in the media savvy world, the importance of public appearances becomes greater. Cancellation cover is a key consideration, particularly when stars have a history of no-shows, and given the complexities of such events, Lloyd’s underwriting expertise makes it the market of choice.
Last updated on 11 Oct 2007
