Insurers review Middle East events coverage after cancellations

(Reuters) — Some insurers are excluding Israel, Lebanon and other Middle Eastern countries from their event cancellation policies after the Israel-Hamas war resulted in some activities being pulled.

European Aquatics last week called off the continental water polo championships, which was scheduled to take place in Israel in January, because of the ongoing conflict.

“Insurers in the cancellation contingency space are beginning to err on the side of caution,” said Edel Ryan, a senior executive at broker Marsh.

Organizers of large events often buy cancellation insurance one to two years in advance. Such policies typically exclude war or terror attacks. Many organizers choose to buy that cover through an add-on political violence and terrorism policy.

“Some (insurers) have stated that they will not be looking at writing new business in certain territories or are having very clear specific exclusions around those territories, particularly in the Middle East – but, of course, Israel and Lebanon were quoted,” Ms. Ryan said.

Insurers cannot change policy wordings of existing policies, so any event organizers that bought political violence cover and canceled after the conflict started on Oct. 7 should be covered.

But new policies are likely to exclude Israel, Lebanon and countries neighboring Israel such as Egypt and Jordan, three sources told Reuters, standard practice after a war breaks out.

Insurers are also considering restricting cover for event cancellations outside the region, the sources added.

MTV last month canceled its Europe Music Awards, which were due to take place in Paris on Nov 5, citing “the volatility of world events” amid the ongoing conflict in Israel and Gaza.

MTV had no immediate comment on its cover.

Ms. Ryan said some political violence insurers were proposing wordings that would allow them to break or review policies due to “conditions relating to armed involvement in the 2023 Israel war.”

Specialist political violence policies are typically offered by companies operating in the Lloyd’s of London insurance market, as well as by U.S. insurers.