Contingency in business relates to insurance products that generally are not included within the most commonly accepted types of insurance products such as property, casualty, marine, and financial services handled by the majority of insurance companies. The London Market began the industry of contingency insurance products.
These forms of insurance cover cancellation, non appearance, prize indemnity, transmission failure, weather, political risk, reduction in yield, and various other forms of unusual and esoteric coverage. These types of insurance products protect business clients from losses every bit as much as do typical insurance coverage.
Cancellation coverage pays a business or individual client back all of the costs and income associated with conventions, concerts, and other special events that are forced to be canceled or postponed for reasons beyond a promoter’s control. Reduced attendance, ticket refunds, and obligations of contract may also be covered by this category of contingency insurance.
Non appearance contingency insurance protects a business’ income should their scheduled famous performer not appear at the event as promised. Included with this type of contingency coverage are dangers such as sickness, extortion, accident, family catastrophe, and even incarceration of the performer. The total dollar amount that is covered includes not only the fee paid to the performer but also the revenue generated indirectly from the event appearance, including parking, ticket sales, merchandising, and concessions.
Prize indemnity contingency proves to be the widest type of contingency insurance business. Such products permit clients to be capable of insuring give away products and cash prizes to customers via promotions. To qualify for this coverage, a prize winning has to result from a lucky event.
Transmission Failure contingency safeguards a business’ advertising money spent, or other revenues that would be generated, if a television signal somehow became preempted or interrupted. This contingency insurance is set up to provide coverage for a specific time frame or television event. Interruption has to be something that the insured is unable to control, such as catastrophic or segmented coverage.
Contingency insurance for the weather is commonly utilized alongside event cancellation coverage. These policies pay an insured entity if poor weather happens at a certain time on a particular day. Included in these types of weather are snow, rain, wind, lightning, or tornado watches and warnings. It might also be utilized in a promotion where weather turned out to be a factor in a prize being won.
Political risk contingency coverage pertains to an individual event that might lead to an event being canceled. Such coverage could pertain to delay, abandonment, or repatriation having to do with a covered event. Such coverage is available for limited time frames only.
Reduction in yield contingency is useful for casinos, amusement parks, and resorts. This policy actually pays if anticipated revenue from visitors or ticket sales does not reach the expected level because of a covered peril. If attendance is less than expected, the policy will pay to its limit.