LAST UPDATED: 2 December 2022

Race Cancellation Insurance in the Age of Pandemics

Insurance veteran Nathan Nicholas talks pandemics, race cancellation insurance and the merits of insuring your virtual race.

Nathan NicholasNathan Nicholas

Race Cancellation Insurance in the Age of Pandemics

To say it's been a challenging year for the endurance events industry would be an understatement. So what can we learn from what we’ve been through to help us improve the way we manage risk in the events industry going forward? That’s what we’re exploring in this episode of the Head Start podcast with the help of our guest, Nathan Nicholas, Managing Partner at specialist insurance broker Nicholas Hill Group

When it comes to 1-in-1,000-type risks in the industry, Nathan has dealt with it all, from severe weather and natural catastrophes to terrorism and, now, pandemics. So he’s the right person to help us understand what happens when things like COVID come around, how events are affected, and how they can protect themselves going forward with the help of event cancellation insurance.

In this episode:

  • What's been happening in the race insurance industry during the COVID pandemic
  • Race cancellation insurance: What is it? What does it cover? Does it pay out? How much does it cost?
  • Communicable disease cover: What is it? Is it part of your race cancellation policy? Can you buy COVID cover today?
  • The remarkable story of a mystery event which got hit with terrorism, thunderstorm and COVID in consecutive years and had to cancel the race two years in a row
  • The state of race insurance as the world (and races) begins to open up
  • A brief look at virtual event insurance: Do you need it? What does it cover? How much does it cost?
  • Nathan's take on whether COVID infections in your event would be covered by your insurance policy

Thanks to GiveSignup|RunSignup for supporting quality content for race directors by sponsoring this episode. More than 21,000 in-person, virtual, and hybrid events use GiveSignup|RunSignup's free and integrated solution to save time, grow their events, and raise more. If you'd like to learn more about GiveSignup|RunSignup's all-in-one technology solution for endurance and fundraising events visit

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Episode transcript

Panos  1:40
Nathan, welcome to the podcast. 

Nathan  1:42  
Hey, thank you, Panos. Great to be here.

Panos  1:44  
Well, thanks a lot for coming on. You're based in Colorado, is that right?

Nathan  1:47
We are. We're in Colorado Springs, on the Front Range just south of Denver, and we operate nationally. So it's a good place to be based out of them staring out my window at Pikes Peak right now.

About Nicholas Hill Group

Panos  1:58  
Yeah, lovely place to live and work. And of course, you're the Nicholas in Nicholas Hill group. Quite a few people would know who you are. But some of our listeners may not. So why don't you tell us a little bit about what you guys do in the endurance events space?

Nathan  2:14  
Yeah, we consider ourselves kind of a boutique specialty insurance firm. We operate on a national basis. We manage custom programs. So, we seek out opportunities within the marketplace where certain industries or segments are being underserved. And we learn everything we can about them. And we try to fill that gap for those segments by creating custom insurance platforms with customized coverages. We try to tap technology at every turn. So we make things as easy as possible for them.

Panos  2:50  
Yep. And it's also important, I think, to know that you guys also work quite closely with some of the big organizations and governing bodies in the industry like USA Cycling and USA Triathlon and others. So how long have you guys been working with events in the endurance market for?

Nathan  3:08  
I was actually raised in the insurance industry. And I think at 12 years old, I was in a mailroom. So, I've been around it all my life. Historically, we originally were a Life and Health Insurance firm. So we provided life and health benefits way back, as things evolved, and actually, as I matured into business, I started in the insurance industry on my own outside of my family. I was selling long term care to seniors, and you name it, I've kind of done a little bit of everything. But as I matured, I quickly realized that it was a lot more fun to speak to people that you had a common passion and a common bond with. And I started to build out my own business around working with those folks. And being blessed to live here in Colorado Springs, it's home of the Olympic Committee, and home of multiple national governing bodies. So a lot of the different sports organizations are based here in our community. So when I started to work towards directing my business in that manner, working with sporting organizations, I started with the sports I was engaged in, and that included skiing, for one, we worked with, we still work with a lot of ski resorts around the country, and mountain biking, running, endurance, things of that nature. We're fortunate enough to partner up with USA Cycling, USA Triathlon, just a variety of different sports organizations. And again, we provided medical benefits, health insurance benefits, but as things evolved, not only with those opportunities with our current partners and what they needed, but also with the regulatory landscape in the US and healthcare in general, and things like the afford fordable Care Act and Obamacare, quickly we kind of transitioned into the property and casualty world and have continued to evolve ever since. And like I said, we try to find areas where our clients and our partners are having challenges, and we help them address those challenges.

Panos  5:20  
And I guess like everyone else, the past 12 months must have been pretty eventful for your business and the insurance industry as a whole, I guess - right? 

Nathan  5:30  
Yeah, you bet. You bet. Primarily because the segments or the coverages that we provide to our clients were centerpiece throughout the pandemic. So not only do we provide event liability, which I'm sure we'll get to here shortly, for endurance sports, and obviously, once the pandemic hit and the world shut down, that meant that our clients were no longer able to host their events. So that part of our business kind of dried up quickly - temporarily, thankfully. But also event cancellation, we provide event cancellation to literally thousands of events around the world. And once those events were canceled, our phone started ringing. And certain clients were fortunate enough to purchase coverage before the pandemic and they had some coverage available to them. And others were on different platforms that didn't have communicable disease coverage. So it was an interesting time!

What is race cancellation insurance?

Panos  6:26
Yeah, I can imagine. So that's actually exactly what I'd like us to talk about today. That is, event cancellation insurance on the one hand and, to a smaller extent, virtual event insurance, which has also come to the fore during the pandemic. So let's come back to discussing some common questions we get about virtual event insurance in a minute. But let's start with race cancellation insurance. And I'd like to start at before the pandemic: what was happening before COVID came about, which I'm sure would have changed quite a lot since then. And we'll go into what the pandemic has meant for event cancellation insurance, as a product. But again, let's start from the beginning. So what is race cancellation insurance? What does it typically cover? And what kinds of people used to take out cancellation insurance before COVID? And for what reason? What kinds of risks were they trying to mitigate with a race cancellation policy?

Nathan  7:28  
Yeah, well, historically, event cancellation insurance, which wasn't limited to races or endurance sports, but was probably more utilized in the entertainment segment, or professional sports, things of that nature, it was a commodity. There were a handful of insurance companies that offered it. Only specialty carriers offer this type of coverage. One might think of Lloyd's of London and, you know, things of that nature. Other carriers certainly offered it as well, we have a lot of partners that do so. But traditionally, it really was something that only the largest events out there, the best funded events, with a lot of revenue, a lot of expenses, they were the ones buying it, because there was a high cost of entry - it was an expensive product, relatively speaking. Smaller events, more community based events simply didn't have the resources to pay for it. So historically, that's who is buying it, the larger events. They covered their revenue, or their expenses, typically whichever is largest. Some nonprofit events, they'll make money off their events but the expense side is the larger side of the ledger, so that's what they would insure. And it would basically make them whole if an event was canceled due to a covered peril. And traditionally, the coverage was really broad. It was expensive, but it was broad. It covered a lot of things. The biggest peril, the one that people were most concerned about, they may not be most concerned about that today, but it remains the biggest peril, whether you believe it or not, especially as we come out of this pandemic situation we've all been in, is adverse weather. That was the number one concern, just a bad day, a storm hit on a bad day, things like that. It also covered you know, natural catastrophe or disaster, you might think of earthquakes, forest fires, certainly hurricanes had been factors, things like that. And then, in recent history, terrorism has played a role. So terrorism was an option. And there are varying degrees of terrorism coverage that one could choose.

How much does race cancellation cost?

Panos  9:40  
Okay, so you mentioned race cancellation insurance historically has been an expensive item, relatively speaking, as you said. So what kind of premium roughly are we talking about? So, let's say, I wanted to - just to give people like a rough point on the map here, you know, in terms of expensive and cheap means in the context of an event cancellation policy - let's say if I wanted to cover like 100,000 of expenses, what kind of premium would I have to pay on that, pre-pandemic, to protect myself against a cancellation caused by adverse weather or terrorism or any of the other perils that the policy might cover?

Nathan  10:24  
You know, it's a commodity, but it's an interesting product, where it's difficult to give you a generalized answer to that question. Because there's a lot of factors in play, when it comes to pricing event cancellation. What I will tell you is that most of those carriers in those standalone, fully underwritten markets, they had minimum premiums involved. So, it might have been $5,000, for instance, or something along that line, but it would greatly increase. And the factors that come into play when pricing event cancellation would be location of your event, type of event you're hosting, whether that event is indoors or outdoors, and how susceptible it is to a rain event - if it sprinkles, are you going to have to cancel that event? Or can you endure half an inch of rain? Or what's the situation surrounding your event? We've had events that are just fine with rain, but if the wind picks up to a certain level, they're going to have to cancel. So it's very customized, and the quoting is entirely subject to your own event, and how risky your event is, from an underwriting perspective, related to the perils that any one carrier covers. There's a lot of factors apply. And those factors might not be weather related. They might be you're in Florida and you're wanting to schedule an event during hurricane season, or any number of factors. You might be in a location that has some political upheaval, or has seen some recent protests, or whatever the case may be. Those all increase the exposure from an underwriting perspective. And therefore the cost.

Panos  12:18  
Yeah, and I can think the US is a country that definitely carries a lot of those kind of adverse weather and natural catastrophe type risks. I mean, you mentioned hurricanes, I guess forest fires in California have been a big risk for events in that region also over the past few years?

Nathan  12:39  
Yeah, that's been a big one, Panos, that's been a big one. If you're a California event organizer, and let's say you might have a bicycle tour, and it spans three or four counties, not only do they look at how susceptible your course is to a future forest fire, but they will look at the past forest fires and are the roads you're using or the trails you're using, are they subject to flooding or landslides, because of the past fires? All sorts of factors come into play, the prevailing winds, if there is a forest fire, are you going to be downwind from that where the air quality becomes a factor and for health concerns you cannot host your event. All sorts of factors come into play when when we price this. So that's why historically, and we can get in a few, you know, current options, because we've addressed some of these concerns, but historically, very expensive, but on the flip side, very customizable. So depending on what you do, we've had a lot of success, getting creative, and addressing your concerns.

Does race cancellation insurance pay out?

Panos  13:51  
And I guess some people when they go into insurance contracts, they always have at the back of their mind, is this thing gonna pay off when I need it? It is an expensive product, as you mentioned, but I also guess that when it comes to it, you can rely on these kinds of policies to pay off, right? I mean, you're not going to be getting ifs or buts or people looking at the small print?

Nathan  14:14  
Yeah, yeah - within the parameters of the policy. I mean, insurance is a multi-page contract, that's what you're buying. And there's certainly a lot of fine fine print and legalese, that, you know, we recommend working with a specialty insurance firm, someone that does this for a living and can advise you speaking with your attorney and your board. All those come into play. Certainly the exclusion page is important. But yeah, within the term of the policy, it pays off. I mean, that's what they do. But when you buy your own policy, when you go that route, because there's different routes you can go today, but when you go that route, you buy your own policy, you get it customized to your needs. You'll have a pretty firm understanding of the intent of the policy. But when you do that, those policies typically get adjusted. So you get assigned to -- a claims adjuster gets assigned to your claim and they work with you. And the first thing they do - insurance companies most of them are for profit entities as well - so they will pay within the term of the policy, within the scope of the policy, nothing more, nothing less typically. But they will also work to adjust that claim. What that means is they might look at the policy and they might say, well, the first question is, is it possible to reschedule your event, postpone your event, instead of just outright canceling your event. And most of our clients, event organizers, their motivations are in line with the insurance company as well, they all want to host a successful event. That's the goal. They want to take care of the registrants the people that signed up, they want to host a quality safe event. So typically, they welcome that discussion. They want to look at the calendar, and they want a partner in that effort to see if there's a way we can push it forward. The biggest one that you might think of today is the Tokyo Olympics. Tokyo Olympics last year, wasn't cancelled. All right, it was postponed to this year. And there, that's gonna be probably the largest event cancellation claim in history and, hopefully, larger than anything we see again for quite some time. And it will be large, regardless of whether it's able to proceed as planned this summer or not. It's just a massive effort that's underway right now. And the insurance companies are partners, with the International Olympic Committee to make sure that those games happen. Because, at the end of the day, it's cheaper to postpone and to cancel, but if it has to be cancelled, and there's no way around that, yes, those policies respond. And they pay those claims.

What is communicable disease cover?

Panos  17:03  
Right. So leading up to this disaster that has been the last 12 months. How did communicable disease cover play into all that? Was it on lots of people's radar when they were taking out cancellation policy? Did people include communicable disease covering in their policies? Or did they just think it was like a waste of money?

Nathan  17:26  
Yeah, good question. Again, we've all become experts in this field, I feel like, but we all know that the last major worldwide pandemic was in the 1918-1920 range, the Spanish flu. And none of us who are alive today really had lived through this. So it really was not on anyone's mind, even though we've had localized outbreaks off and on almost every year. Probably we have had every year, but there hadn't been anything that had spread globally, and really had a massive impact in the insurance space. So, leading up to COVID - pre-COVID, if you will - communicable disease was readily available within these policies. Some companies had it as an add-on, some companies, I don't want to say it was offered for free, because, it was priced into the policy, but it was just added - it was an added benefit that you couldn't really exclude it necessarily, unless you made a special request to do so and the company agreed to that. But some of our primary markets for event cancellation just included it as part of their baseline price. So it was interesting when we would get into a competitive situation, and most often we will go to market with our clients and gather as many quotes as we can, and let them make an informed decision about why one policy is cheaper than the next and what's important to them. And we guide them through that process. And when we were in those scenarios, pre-COVID, most of the time, our clients would choose not to pay more to get communicable disease coverage. So they didn't want it. They didn't see the need for it. So you will see that a lot today. I mean, I read a headline earlier in the week, where there's a nonprofit organization, a trade association that represents attorneys, who are suing, I think, Lloyd's of London right now, because they did not have communicable disease coverage in the policy that they chose, and they had to cancel their  conference. I'm not sure the location of that conference, but wherever that conference was being held. I believe - I might misquote them - but I think their conference was canceled because that venue was being used as a hospital staging area for COVID. They lost their permit for the event because of that need in the community. The insurance company declined the claim, because they don't have communicable disease coverage within their policy or pandemic coverage. So it was excluded per the insurance company's guidelines. And they declined the claim. The attorneys are arguing that it wasn't COVID they canceled the venue and got their permit cancelled, but rather the community needed the venue for a different purpose - meaning that there wasn't a travel ban at the time is what they're saying. So they could have gone and held their event that they wanted to, is what they're saying, but the municipality needed the venue for something else. So it's interesting, we're seeing this play out where, where people chose not to purchase coverage that included communicable disease, because they would have had to have paid more. And now they're arguing -- after the fact, they feel like they should have some coverage there. So that's gonna play out in the courts of law. We'll see how it unfolds. We've seen a few endurance events kind of follow suit, claiming that the exclusion was a bit ambiguous that the language was gray within the contract. So we've seen some attempts to challenge that language. For the most part, the courts have upheld the terms of the policy.

Panos  21:32  
Right. And have you had any clients with communicable disease cover that had to claim against the policy? And if so, did they get their money back?

Nathan  21:41  
Yes, yes, you bet, we have had. If you had bought a policy that included communicable disease coverage prior to I would say January 2020 timeframe, before it became well known and before those insurance companies placed the exclusion  -- for not just communicable disease, but COVID, as well, they had a specific COVID exclusion on top of the communicable disease exclusion -- if you'd bought prior to January 2020 and that timeframe and you had that coverage in your policy, yes. We've had more than one claim, and they were paid out just fine, without any delay. There's been a little bit of a delay on the claim side, simply because of volume. Every event in the world got canceled. So whether they had COVID exclusions or not, there are a lot of claims. So that kind of slowed down the process for everybody. So it wasn't that insurance companies were dragging their feet. It's just that they were completely underwater, and they still are today. We're still seeing that unfold.

Getting hit by terrorism, severe weather and COVID three years in a row

Panos  22:50  
So you must have some stories to tell, I suppose working alongside events that sets stressful times for them and also make or break times. I guess, for some of them when they consider canceling last minute.

Nathan  23:02  
Yeah, we - gosh! - it runs the gamut. We've got all kinds of fun stories, if you're into insurance history. But yeah, we've got one that comes to mind, definitely as one of our current and hopefully future clients - I think they're pleased with us - came to us a number of years ago. It's a large running event in the same location every year. They've been around for 45 years or something. And they reached out to us just to explore event cancellation insurance - never had it before, never had to cancel in the entire life of the event all these years. But they were curious, so they reached out. We ran some quotes for them. They thought it was really expensive. And they discussed it internally. I think we quoted them - if memory serves - we quoted them three years ago for the first time on a Friday afternoon. Full coverage, you know, Cadillac plan, if you will, had all the bells and whistles. They had a board meeting over the weekend, they are going to discuss it and get back to me. I woke up the next morning to news that in their city, where the event is to be held, or was to be held, there was a terrorist event. Someone was mailing packages with bombs in them, and they had exploded. And so I got to the office on Monday morning, and I had a couple voicemails from the weekend. The first one was the event that we had quoted on Friday, leaving me a message saying we want to go forward, we want to proceed, we want to buy the coverage. And the very next voicemail was the insurance carrier saying we'll still offer coverage to these guys, but we're not going to offer terrorism coverage at the moment because of the recent events in their community. So I had to call the client and let them know that, unfortunately, timing is bad and timing is everything, and we can offer coverage but not the terrorism coverage. So they actually agreed to that, they purchased the policy. And it did not have terrorism coverage because of the ongoing threat in their community. But the good news is they actually caught the guy. I believe he was killed, actually, maybe in the process of detonating one of those devices. Whatever the case may be, that exposure was dealt with, that was no longer a concern in the city of the event. And we were actually able, within a short amount of time, maybe a week or two, to add the terrorism coverage back to their policy. So by the time that the event was held, they had terrorism coverage. That was the first year they had bought the coverage. They had a successful event that year, no claim. But they had the coverage, full coverage. And everything was good. They came back a year later, and applied for a quote, again, they felt the need, they saw the value in the coverage. So we were able to provide full coverage for their event. The second year, I think this was like the 44th year of them hosting an event never had a cancellation. Well, that year, I got a call the night before the event that a severe thunderstorm was tracking. It looked like it was gonna cross right over the course where the event was to be held. I told him to monitor the situation to keep us in the loop, which they did. And unfortunately, they had to cancel that event for the first time in their history. It was severe lightning, the morning of the event, it was -- just the course was unsafe, unsafe conditions. So they filed a claim. In short order that claim was assigned to a claims adjuster went through the process. And they received the full benefit of their policy that they had purchased, covering their loss. So it was close to a million dollar claim. That was the second year they ever had an event cancellation policy. That's for the next year, obviously, they had an experience where they used the policy, they now they really saw the value in having an event cancellation policy. So they purchased the policy for a third year. They did that in advance, they wanted to make sure they had the coverage. The first year they had that terrorism issue, they didn't want to procrastinate. So they bought the coverage in a very timely fashion. And lucky they did because shortly after they purchased that coverage, the world shut down due to COVID. They had purchased one of these Cadillac plans like those plans available through Race Directors HQ, and they therefore had communicable disease coverage, that they didn't pay necessarily extra for, it was built into the pricing of the policy. And it was standard. It was one of the standard benefits at that time. So they were very lucky they had the coverage it was in place. And lo and behold, they had to shut down their -- just like the rest of the world, their municipality, their location was shut down. They canceled the event. Second cancellation in their entire history, the 45th year I think or something like that, of the event. They canceled, the claim was paid, even though it was a pandemic, they had the coverage and the claim was paid. So they were very pleased with that outcome. Obviously, one of the few with the foresight to purchase event cancellation coverage that included communicable disease coverage. And it's an interesting case study to hear you have a very large event, who for most of the life of the event had never purchased coverage and started looking at it three years ago. The first year they bought coverage, they were able to host the event, although they almost had to cover to cancel due to terrorism, due to one of the covered perils, which is terrorism. Second year, they did cancel at different peril. Adverse weather was the peril that they had to cancel their event due to, which is covered and the claim was paid. Third year, third year of having the policy, they canceled the event due to communicable disease. They've had a policy for three years. They've canceled two of those three years. And all three years they had three different perils that were covered by the policy. That was a concern for them. So, you know, pre COVID the standard line for event organizers has been I've been doing it for a long time, why would I ever pay the money for that coverage? I've been doing this for 20-30 years. I've never had a claim. Well, if you speak to that event, they'll tell you that that can flip on a dime. Overnight that can change. And today, there's not an event organizer out there that was in business in 2020. They can tell you that they've never had a cancellation concern. It's a whole new world when it comes to van cancellation coverage.

Panos  30:23  
Yeah, I mean, it's like, do you guys have this saying about buses? You wait for a bus, like for two or three hours or whatever. And then two come by at once?

Nathan  30:33  
It's true. Yeah, yeah. No, you bet, you bet. But that's why you pay for it. And that's also why people don't like it, by the way, because, they'll pay for something for a decade and see no benefit from it. But certainly, when the need arises, and you have the coverage, you feel much differently going forward.

Interview break

Panos  30:57
It's been a tough year for races, no doubt about it. But things are finally starting to look up. How do we know? Well, GiveSignup|RunSignup often share insights into the endurance events market from the thousands of races, they onboard every month. So let's get an update on what's happening in the endurance race market from GiveSignup|RunSignup Founder, Bob Bickel. Bob, thanks for coming on.

Bob Bickel  31:20  
Hi, Panos. Thanks for having me.

Panos  31:22
So you guys see a lot of the endurance events market. How's it looking in terms of in-person races making a comeback in 2021?

Bob Bickel  31:31  
Yes, we're seeing a real comeback in live events. Registration numbers are definitely ticking up. About 35% of the registrations that are happening in May are for virtual and 65% are for live. A number of those are for later in the year, but things are looking good. And also, a more real time stat for you, last weekend was Mother's Day, but on Saturday, there were 77 races with about 45,000 participants that had timers using our scoring software. So we know that the number's more than that, but that's an encouraging sign to see that level of activity.

Panos  32:11  
Well, that's certainly very encouraging. But it sounds like virtual races are here to stay?

Bob Bickel  32:15  
Oh, yes, we do expect virtual to kind of continue on. I know my own little race here in Moorestown, New Jersey, we've made it hybrid this year. So people have the choice of choosing live or in-person. And people are choosing live by far, we've gotten a number of really nice notes from participants thanking us for putting on a live event and saying how forward they're looking to this event. And actually, I'm just about to head out to mark the course put down the arrows and the mile markers and so forth, painting in the streets, as they say.

Panos  32:50  
Well, of course, I often forget you also direct your own race. Bob, thanks a lot for those great insights and good luck marking the course for your Scott Coffee Run. Okay, let's get back to talking race insurance with Nathan Nicholas. 

Can I get race cancellation insurance today?

Panos  33:06
So fast forward to the present day. I know that, when the pandemic hit, I used to see lots of posts in our race directors group on Facebook with people saying, can I actually insure my events against cancellation now - sort of like in the thick of it. I guess that's a little bit -- it's a little bit late for that, right?

Nathan  33:27  
It is. Again, starting, I believe, right around January, is when we started seeing most insurance companies no longer offer communicable disease coverage, kind of beefing up their exclusion language, if you will, take out any ambiguity, making sure that it was well-written and well-understood that communicable disease pandemics are excluded. And COVID specifically, is excluded. So yeah, it's a little late for that. However, that being said, we've been approached in the last few months by a few markets that are kind of sticking their toe in the water a little bit, saying that they are open to covering event cancellation, including COVID-related claims and pandemic-related claims. We have yet to place one of those policies. The quotes we're getting back for those are in the 20% range. So you know, most people insure their revenue because that's the greatest figure. So, on a million dollar revenue event, you're talking $200,000 for that type of coverage. That's kind of what we're seeing. Some of them are kind of -- we have seen a quote or two where they've sweeten the offer a little bit and said if you don't have a claim, we will kind of give you a rebate, like a claim free rebate. But regardless, it's expensive. It's a big ticket item. I don't know quite how I feel about it yet. We're just kind of monitoring the situation. And that's one market that I know of that's offering that most of them have not jumped into that coverage yet.

Am I liable if there is COVID transmission in my event?

Panos  35:09  
Yeah, of course. And I was just thinking actually, that beyond the event cancellation risk for the event, there's also I guess, now the risk to the organizer of what if I put on an event, it's not canceled, but then, God forbid, something happens, and one of my participants can trace their infection back to my event or something? I don't know, I'm just talking out loud here. Is that a risk organizers face? Being sued by people who would argue they got infected by taking part in a race? And would that go under negligence? Like, how would that work? Would it be covered under your standard public liability policy, perhaps?

Nathan  35:50  
Yeah, well, as you know, at least here in the States, anyone can sue anyone, we all have to defend ourselves and play that out in a court of law. And that costs money. And so we have not seen that firsthand, the scenario that you just outlined, somebody claims that they were infected at an event and turns around and sues the event organizer or the insured for negligence for hosting that event. We've heard a lot of rumors, a lot of hearsay, a lot of stories about that, or concerns about that. I heard someone say recently that there has not been a single incident of transmission at an in-person event like that - that at least has been proven. And we do feel that that would be very hard to prove, especially if an insured takes even minimal safety standard guidelines and follows those, as far as taking temperatures, spacing, social distancing, just doing everything they can do to minimize that risk, certainly would address any negligence that someone might claim after the event. But to answer your question, that's an event liability issue. And most event liability policies, exclude communicable diseases or pandemics. So most of them would not respond to that sort of claim. That's something that a lot of insurance companies are in the process of, kind of reviewing their forms, the forms that have been filed with the states and that they're offering out there to see if there could be some coverage offered, see if that's something they're comfortable with, and what that might do to pricing. And so that's been explored by all the insurance companies in the market, because it comes up, that's something that comes up.

Panos  37:49  
Right. So there's no recourse for me to my event cancellation policy. And there is no recourse for me to my just general liability policy for this kind of thing? 

Nathan  38:00  
Well, I can't answer that, that depends on the policy you have and when you bought it and all that. There may be markets today that have that coverage within their liability policy. And again, it depends on the lawsuit. You know, when you get into liability coverage, you cannot say yes or no, whether something's covered, because every claim is different. And it plays out in the court of law, you speak to the intent of the policy. But you can't really speak to the outcome, because every claim is different.

Do I need insurance for a virtual event?

Panos  38:31  
So actually, it's interesting you touching on the whole litigation side of things in the US, because I suspect that something that will come up in the discussion around virtual race insurance. So virtual race insurance is in the forefront of a lot of people's minds, because, obviously lots of races, a lot of races that used to be in person have transitioned into being virtual races, and also just more race organizers have been putting on virtual races during this time to just help out with revenue. So a very common question that comes up in these discussions is, would I need an insurance policy to put on a virtual race? And why would I need a virtual race insurance policy, if everything I'm doing is just letting people run remotely on their own and I'm not putting on a course or I'm not providing any kind of like physical infrastructure for people to run around in? 

Nathan  39:26  
Well, again, in the USA, anyone can sue anyone, and you've got to defend yourself and that costs money. So that doesn't change whether it's in person or virtual. That being said, when when events shut down, we start to see a trend of the virtual events growing. They were around before COVID, but it was a little more of a novelty, if you will. But it became a focus for a lot of event organizers. to kind of keep the industry moving forward. We saw that momentum and we address that very quickly. And our insurance carrier partners helped us write specific - or address virtual races, specifically - within their liability insurance platform. So we were very early to offer that. And we got a lot of questions about why is this needed? Why should I buy this? Well, again, you can be sued. If you're hosting any type of an event, you are the one advising people to go out and run a course, or participate in an activity that you are responsible for, you are telling them that you are hosting this event, they need to run a certain distance within a certain timeframe, sometimes, within a specific course, or location that there are some arguments that that increases your exposure, because you are not taking control of the course that you're putting people on, you're asking them to go run on or ride a bike on. So it's not a closed course, you're not putting any kind of barricade up, you're not controlling traffic, you're not ensuring that it's, it's safe for people to participate in the activity in that location or that time of year. So there is a school of thought that that increases your exposure to potential litigation. And beside that, if you have any kind of sponsorship, or third-party partners involved in your virtual event, they will maintain or they most likely - or some would say, should - maintain a requirement for proof of liability coverage, where you continue to provide liability coverage and name that sponsor or that partner as the additional insured on your policy in case they get named in a lawsuit due to your negligence or being accused of negligence. So at the end of the day, whether you want to buy it or not, if you have any partners or third-party sponsors or whatever, they may force you to purchase it. And again, if there is a permit required in your location, if you're still hosting a virtual event in, say, a park or a venue in your community, your municipality may still permit that. And they will also require proof of liability coverage, whether it's a virtual or in-person.

How much does virtual event insurance cost?

Panos  42:39  
Well, in the case of insuring the virtual race, however, I guess the cost of doing that would probably be less - perhaps a lot less - than ensuring an in person race of the same size, right?

Nathan  42:51  
Yeah, through the programs where we offer virtual coverage. And again, we were pretty early - Race directors HQ being one of those options for sure - it's a lower price point, that's the way we viewed the coverage. We viewed that due to the virtual nature of an event, we could lower the price point, lower the cost per participant. So we've done that, it's more affordable, most certainly, and quick and easy, not a lot of hoops to jump through and you can purchase it with your credit card online. Again, some underwriters have taken the other view where either they don't offer virtual coverage at all. Or if they do they think that there's a greater or enhanced exposure, because you're not controlling the course or the event. So some may even charge more for that.

Are in-person events coming back?

Panos  43:43  
Yeah, that's really fascinating whether the virtual aspect of the event goes for you or against you in that case. Now let's let's look to the future. I know that people are already -- they've started planning races in the summer and in the fall. I guess one of the first places they'd go to would be to check out insurance and get a quote and things like that. So what's your insight into what's happening in the industry with events coming back to the market now and what's on people's minds in terms of insuring events going forward?

Nathan  44:19  
Oddly enough, I feel like we are a pretty good resource for gauging the market and knowing the state of the market currently, because insurance is likely the first - if not the first one of the very early items - to check off the list when you're hosting an event. So we are definitely seen an uptick in live events coming on board for both event liability and event cancellation coverage. We get those reports monthly. We have activity daily. For the last year it was almost exclusively virtual events. We're starting to see more and more in-person events come on board. And that's really good news especially here in the US with the vaccination rates, and just the overall attitude, I guess that the states are showing, depending on your location. Some states certainly are more open than others still, and that will probably remain the case through the summer, through the event season. But but we're definitely seeing an uptick. I don't foresee virtual events necessarily becoming fewer. I think people have recognized that there is a segment of our population that prefers to run virtually, to not be in a crowded location, to remain socially distant. And I think a lot of event organizers will continue to provide that for those folks. I think they will maybe do so in partnership with their in-person event. I think they'll give the option. We're seeing a lot of that. We're seeing a lot of in person with an option of a virtual event taking place. So that's cool, that's exciting. That's an evolution of the endurance space, which is great to see. It's great to see the industry evolve and cater to a broader audience. Now, with regard to event cancellation, we still are getting the question, a lot of people want the COVID coverage included. Again, that's hard today. There's a really good track record of insurance companies jumping back in once the exposure has been properly addressed. So I really am optimistic that we'll be able to provide communicable disease, including COVID coverage soon, once they determine that that herd immunity has kind of been reached, I really think that there will be some carriers that are forward thinking that we'll jump back in again. There's one already but it's kind of an outlier. And, you we'll we'll see where it goes. But I think it's going to be more and more readily available as we make progress. That being said, I would highly encourage any event out there, regardless of your size, because nowadays, there's an ample opportunity and resources for the smallest event, to get event cancellation coverage. No longer do you have to pay those $5000, $10,000 minimum premiums. There's options out there for you. It won't be a customized policy, it won't be as broad as if you buy your own. But there are options, even for very, very small events, I would encourage them all to look at those options. Because today, if you get permitted for a live event, COVID may very well not be your largest exposure anymore. Because again, culturally, socially, we're all getting more and more comfortable with a pandemic and what our current attitude is, what our risk tolerance might be, personally, and we're all getting out in the world again, we're all going to the grocery store and going to live events. So if you get permitted in your location, that tells me that your location is more comfortable and opening up quicker. And it's less likely today that they're going to pull that permit, because of COVID. Now, there's all these variants out there, anything could happen. So if a variant took root in your community, and it was substantial and concerning, and spreading quickly, yeah, they could pull your permit. But I would think that most venues or municipalities that are granting permits for live events today have determined that they're comfortable with that. And, you know, they might have some guidelines for you to follow, certainly. And as long as you follow that, I would guess that, you know, hopefully, you'll be able to have that event, regardless of what's happening with vaccines. So, in my opinion, your largest exposure in 2020, if you're hosting a live event that's already permitted in this environment remains whether in natural disaster, those have always been the the outliers, those have always been the biggest drivers of claims. And that's not going to change. So I would highly encourage you to look at your options, regardless of whether pandemic coverage is available to you.

Panos  49:24  
Yeah, I mean, it's a funny thing - you must, you must get this a lot in your line of work, the way people's memory works, and how people tend to overestimate some risks and underestimate other risks. Today, it's all about COVID and then you'll have a forest fire tomorrow and it will be all about forest fires. It's totally anchored to the most immediate threat and everyone's super sensitive to that and then everything else is like zero chance until it happens tomorrow.

Nathan  49:53  
I think we're optimistic creatures by nature, but I think we also have really short memories. And we'll be in the middle of a drought If it rains for four days in a row, suddenly we live in Seattle - no offense to you folks in Seattle, it's a wonderful place. But, ya know, it's short term memory for sure. We're gonna get beyond this, we're going to do it quickly. And I think we're seeing signs of that every day. And we're very optimistic for the future. But I do think that event cancellation protection in some form or fashion is going to become standard place. Again, historically, only the biggest events, were able to buy it. Liability insurance has been a requirement for a long time for very good reason. I feel that cancellation coverage may be a requirement in some areas, maybe certain venues. We see that in countries. You can't travel to certain countries right now without showing a form of travel insurance. I think cancellation insurance for live events, may follow suit in some areas as a requirement. But even if it doesn't, I think it's going to become a very standard business practice. And something that event organizers should start to think about budgeting for or building into the price pricing of your event.

How can I get race insurance?

Panos  51:07  
So how can someone reach out to you and perhaps learn a little bit more about getting a race cancellation policy? Or getting a quote, or even just having a discussion about how they should approach some of these risks?

Nathan  51:22  
Sure, well, they can certainly visit our website at But if you're a member of Race Directors HQ, we have special pricing for you. And that's available, Panos, through your website. And we would love to assist any way we can answer your questions. Even if you're working with another resource, another organization or another national governing body or whatever we can, we can help answer your questions and point you in the right direction. Through Race Directors HQ, you get special pricing for both products, I should say all three, live in-person event liability, virtual event liability, as well as event cancellation coverage.

Panos  52:06  
Yep, I know plenty of our members have been coming to you for insurance. And they've been very, very happy with the policies and your response to their questions and concerns. So thank you very, very much for this update and the whole kind of like COVID retrospective we had there. It's been super informative. Hopefully we'll have you on for another episode soon to discuss bright things. But until then, thanks again, Nathan, for your time, thanks to everyone tuning in. And we'll see you all on the next episode.

Nathan  52:37  
Panos, much appreciated. Thank you.


Panos  52:43  
I hope you enjoyed this episode on race insurance with Nicholas Hill Group Managing Partner, Nathan Nicholas.

You can find more resources on anything and everything related to race directing on our website,, where you'll also find a 10% off on race insurance from Nicholas Hill group, as well as other vendor offers. You can also share your questions about race insurance or anything else in our Facebook group, Race Directors Hub.

And if you enjoyed this episode, don't forget to hit subscribe on your favorite player for more content like this. Until our next episode, take care and keep putting on amazing races.

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