Mitigating risk in meeting contracts has always been a core focus of any meetings program, but it’s even more important in the face of COVID-19. Especially as the globe begins to reopen. Cancellations are on the rise, laying ground for financial exposure. Event insurance has become a new researched topic. Comprehensive and inclusive force majeure clauses are essential. And protecting the health and safety of your employees and attendees is more critical than ever given viral spread.
All of this should be considered with any contract, big or small, to ensure your company and its people are protected. Now, more than ever, a clear list of negotiable and non-negotiable business and legal terms are critical to your risk mitigation strategy. Considering impacts from the COVID-19 pandemic, we’re detailing recommended ways to mitigate risk for future meeting contracts.
Important note: In this article, we’re providing recommendations for future contracting. It should be noted that this is not legal advice or an attempt to advise on the enforceability of any Force Majeure provision. With any recommendations below, we ask that you consult with your legal counsel.
Recommendations for mitigating risk in corporate meeting contracts
Re-Evaluate contractual documents
- If you have a company-approved addendum or supplier-specific MSA (Master Service Agreement), consider requesting suppliers to adopt any client document in its entirety in order to secure the business. Do not expressly link this to force majeure cancellations.
- Revisit the legal language in the rider/MSA with your in-house legal counsel to confirm all essential terms and conditions are written to their approval
- If you do not have a rider or MSA, or a preferred hotel program in place, now is the time to consider one! Having a preferred hotel program with a rider or MSA in place can help mitigate risk and increase savings to your bottom line.
Consider expanding clauses
Consider revising the force majeure clause to include more explicit language around a pandemic to provide broader protection to your organization. Additional clauses to consider including are for social distancing, travel warnings, F&B and attendee safety.
Evaluate Options for Event Insurance
Event insurance has become a broader topic. Special event insurance, also known as one-day event insurance, helps to protect from financial loss for a one-time meeting or event. It can cover costs in case you unexpectedly need to cancel, are found responsible for property damage or injuries occur during the event.
Policies should be evaluated per event to confirm cost-effectiveness and protection against cancellations due to restricted travel or related business travel restrictions. Event insurance protects event planners from a variety of mishaps, from general liability to more specific coverage protecting against a range of potential problems.
Types of Event Insurance Coverage
– General liability insurance
This type is used to protect the insured against property damage or bodily injury caused by agents or employees of the insured. In most cases, venues will require special events insurance of no less than one million dollars and to be included on the policy. It is possible for your corporate program to extend to the event, but this should be confirmed with your insurance company/broker.
– Liquor liability insurance
This insurance provides protection in the case of alcohol being erroneously furnished to a minor, or any statute, ordinance, or regulation relating to the sale, gift, distribution, or use of alcoholic beverages.
– Cancellation insurance
In the event of a cancellation, this type of insurance can protect during unforeseen circumstances such as foul weather, or a vendor no-show (such as the photographer or caterer). This usually covers the loss of deposits and costs already paid in advance. This generally must be purchased when booking the event.
– Auto liability insurance
This type responds to claims of bodily injury or property damage to third parties arising out of the use of a vehicle at the event.
Keep up with current events
Before going to contract review the current guidelines for the city or country where the event will take place. Certain changes may warrant amending your contract before execution.
