Contingency

Written by Naomi Vary

Key developments in 2025

Having appeared to be on the rebound from Covid, the events industry has been beset by cancellations in 2025.  By February 2025, 30 UK music festivals of varying sizes had already been cancelled.  The core reasons given were financial; a hostile economy has driven up costs and expenses, in circumstances where the squeeze on household finances means that potential attendees cannot afford the resulting increase in ticket price.  The need to have contingency plans for bad weather, and to consider security given domestic threats, further put pressure on an already stressed sector.   In short, smaller and medium sized events are facing a perfect storm of increased costs and reduced revenue, making it difficult to compete with larger organisations which are better placed to weather both and real and financial storms.

Ongoing debates over freedom of speech and cancel culture are having an inevitable impact on events, ranging from university debates to film shows and art exhibitions.  The protests noted in the 2024 Annual Insurance Review have continued; Barclays' sponsorship of the Wimbledon tennis tournament was met with demonstrations by the Palestine Solidarity Campaign, and protests are planned for the Scottish League Cup final after Barclays signed a sponsorship deal with Hampden Park.  Although in the 2024 review we noted that the effect of the protests was largely financial, with sponsors stepping down in the face of protests, the increasingly charged atmosphere may lead to more tangible threats to event security.

Keeping with a recurring theme, the impact of cyber attacks on events is under the spotlight.  This year has seen a ransomware attack on Yes24, a South Korean online ticketing platform, which led to numerous cancellations and postponements as a result of booking systems being taken offline.  Although traditional contingency policies excluded losses arising from cyber attacks, many insurers are now introducing specialist event cancellation cyber coverage, and regrettably we expect that 2026 may see claims activity on these products.

What to look out for in 2026

At the time of writing, the country is said to be in the grip of a superflu outbreak of a scale that has resurrected discussions on compulsory mask wearing.  Those event organisers who have managed to emerge from the Covid pandemic relatively unscathed will no doubt be hoping that this is overstated, but the announcements may dent the confidence of a public for which memories of Covid are still fresh.

Public confidence may be dented further by the increasingly hostile global environment.  Fear of violence has led to public New Year's Eve celebrations for 2026 to be cancelled or curtailed in a number of cities, including Paris, Tokyo and Belgrade.  A firework display scheduled to take place on Bondi Beach has been cancelled after the recent Hannukah attack.  Given the complexity now associated with event cancellations – with "no platforming" and political unrest adding to the staple menu of adverse weather, financial woes and audience apathy -  it can be difficult for insurers to assess whether a loss falls within the scope of a traditional contingency policy.  The Covid cases have shown that the Courts are keen to adjudicate claims in favour of the policyholder, and the current landscape may lead insurers to review wordings to ensure that all involved are on the same page in relation to cover.