When resource newsletters for race directors started carrying information about insurance for virtual events, it seemed surprising, to say the least. After all, virtual races and other events don’t take place on a measured course or in a controlled environment. Is coverage necessary?
Short answer: yes. Given the fact that many road races, duathlons and other events (from charity 5Ks all the way up to major marathons) have switched over to remote participation for the foreseeable future, the idea isn’t so unusual. Nor is it very expensive, compared to standard event insurance.
Nathan Nicholas, with the firm Nicholas Hill Group, has been working with a number of event owners in the industry to provide coverage for virtual events. And while there has been a sharp increase in the number of virtual events in the marketplace (particularly as event owners use them rather than cancelling to keep their brand strong), there has not been a history of them.
“I’d say it’s questionable as to whether this kind of coverage existed before,” said Nicholas. “If an event owner purchased a policy, there likely was not an exclusion for virtual events – but it was a gray area.”
It is rare, he adds, for policies to provide blanket coverage; in general, event owners need to stipulate exactly what activities will be taking place during the course of an event in order for them to be covered under the policy.
“When the pandemic hit and things changed, we had clients reaching out to us and asking about coverage for the virtual events.” It became apparent to Nicholas and his colleagues that this was a need in the marketplace.
Insurance for virtual events does come at a cost, although it is significantly lower than that of a live event. And event owners are still required to provide information on the date (or date range) of the event, the estimated participation and the activities being undertaken by participants.
Policies for virtual events provide the same coverage as in-person events, including general liability and participant legal liability. And while it’s certainly possible for an event owner to host a virtual event without insurance, says Nicholas, it’s not advisable. And that includes virtual events that don’t charge a registration fee.
“Anyone can sue anyone in the United States. If a participant in a virtual event sues the event owner for any reason, the event organizer would be forced to defend themselves even if they feel they have no exposure. We also anticipate that sponsors, particularly in the case of high-profile events, would continue to require proof of coverage.”
The only coverage not provided is participant accident coverage since, says Nicholas, “We can’t control the environment.”
The virtual event industry is taking off and as a result, says Nicholas “We’re seeing a lot of inquiries.”
If a vaccine can be developed and the rate of infection can go down, meaning live events become the norm again, it’s still unlikely virtual events will disappear. Such events were being held prior to COVID-19 but came into their own with the need for social distancing.
“I think when life gets back to normal in the next year or so, the virtual events will find their place,” says Nicholas. “There are people who like the format. I also think event organizers who have transitioned to a virtual format may come to like it. They have a lot less expense and they can still make money. I don’t think live events will be harmed by them going forward. Besides, you have so many people using technology like Strava, which allows everyone to compete in a very open-ended format. I think there are some really cool things coming down the pike.”