Raizner Slania LLP recently filed a lawsuit in Harris County against Certain Underwriters at Lloyd’s, London (“Underwriters”) on behalf of the International Dairy Deli Bakery Association (“IDDBA”) over the insurance company’s refusal to pay a claim under an event cancellation policy. The policy at issue was for three years, covering the IDDBA’s trade show event in 2020, 2021, and 2022. The IDDBA was forced to cancel its 2020 show, and it filed a claim. Underwriters paid that claim, but is now denying coverage for the 2021 trade show. This could be the sign of a trend as event coordinators make the difficult decision to resume events or cancel in light of the continued COVID-19 pandemic.

Harris County Event Cancellation Leads to Lawsuit 

Canceled events are nothing new in the wake of the ongoing COVID-19 pandemic. Since the spring of 2020, countless concerts, trade shows, conventions, and more were canceled to help mitigate the spread of the coronavirus. Now, as stand-alone and annual events begin to resume, some organizers are facing difficulties in deciding whether it is safe to resume.

Raizner Slania client IDDBA faced those difficult choices two years in a row. The IDDBA is a non-profit group that represents the dairy, deli, bakery, cheese, and supermarket foodservice industries. Its membership includes over 1,500 companies ranging from small independent operators to some of the world’s largest corporations. Each year, the organization’s members gather for three days to showcase and sample each other’s products and services, and to network. Additionally, several celebrities, leadership experts, and motivational speakers come to the trade show each year to speak at the gathering, making the event incredibly important to the IDDBA’s ongoing viability. 

Fortunately, IDDBA had the foresight to purchase an event cancellation insurance policy from Underwriters, which covered the 2020 trade show in Indianapolis, the 2021 trade show in Houston, and the 2022 trade show in Atlanta. In particular, the IDDBA’s policy contains a “communicable disease” coverage extension, which provides coverage for an event that is cancelled due to a communicable disease. Like many other organizations, the IDDBA had to cancel its 2020 trade show due to the coronavirus pandemic. But since it had procured coverage under the communicable disease extension, the IDDBA filed an insurance claim, and Underwriters ultimately paid approximately $4.3 million for the claim.

Despite the disappointment of cancelling its flagship event in 2020, the IDDBA remained hopeful that the event would resume in 2021. And so shortly after it cancelled its 2020 show, the IDDBA began planning for the 2021 trade show in earnest. It secured hotel blocks for participants, recruited sponsors, registered members, and engaged speakers. However, despite their optimism COVID-19 continued to spike in Houston as new variants formed and positivity rates and hospitalizations remained high. A few months before the 2021 trade show in Houston, the IDDBA Executive Committee made the difficult decision to cancel its planned 2021 trade show, due to safety concerns and company-mandated travel restraints on exhibitors that did not allow the majority of registrants to attend.

The IDDBA felt relieved that their efforts were not in vain due to their event cancellation policy, which afforded coverage for the cancellation of their 2020 trade show due to COVID-19.  Despite the circumstances surrounding the claims for the 2020 and 2021 trade shows being very similar, Underwriters issued a carefully crafted reservation of rights letter for the 2021 claim, which is likely to portend a denial of that claim. In response, the IDDBA, after hiring Raizner Slania, filed a suit for declaratory judgment in Harris County District Court, seeking an adjudication that the claim is rightfully covered for 2021.

Event Cancellation Insurance Claims

While event cancellations are nothing new, the ongoing COVID-19 pandemic led to an unprecedented number of events to be rescheduled or canceled. Because of this, the need for businesses and organizations to have comprehensive event cancellation coverage has become more important than ever.  

Event cancellation insurance or special event coverage essentially works to protect any event-related revenue or expenses should the event need to be canceled. This coverage typically includes fees associated with the cancellation, abandonment, disruption, or rescheduling of the event. Unlike coverage under a business interruption policy, event cancellation coverage differs in that business losses or some form of physical damage are not a prerequisite for recovery.

Event Cancellation Insurance Coverage Attorneys

At Raizner Law, our experienced insurance coverage lawyers have successfully handled large, complex insurance disputes against nearly every major insurance company. Contact us today to see how we can assist you with your event cancellation insurance claims.

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