Contingency planning is a proactive way to protect a company or business against potential losses. It is not only a road map for surviving a catastrophe, but it also forecasts the most likely scenarios, identifies the risks, and prescribes corrective actions if things go wrong.
Contingency plans will typically employ insurance policies to cover possible losses arising from negative events.
Before we can get into the contingency insurance plan options, let us first look at what contingency insurance is.
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What Is Contingency Insurance?
Contingency insurance provides a safety net in the event of an unforeseen and unfortunate event. It can either supplement a primary policy or cover certain risks the former would be unable to or slow to cover.
This coverage aims to minimize losses from incidents such as severe weather, natural disasters, canceled concerts and exhibitions, or accidents during events. It also helps to financially recover from business interruption for unexpected reasons.
Contingency Insurance Plan Options for Businesses
Contingency insurance describes a wide range of products not covered by a standard insurance policy, including sports and events held by businesses.
With that said, here are seven contingency insurance plan options.
Over-Redemption and Fixed Fee Insurance
A new campaign is the lifeblood of your business, but it can also be risky. If you like to offer big incentives to get people’s attention but fear that you’ll sell too many products or services at a non-profit or unrealistic price point, over-redemption and fixed fee insurance protect you against the financial risk of an over-redeemed campaign.
Weather Risks Insurance
Weather risks insurance coverage, which is typically used in conjunction with event cancellation insurance, reimburses an insured for lost revenue due to bad weather at their special event.
Weather risks policies permit cancellation of an event if storms (high winds, lightning strikes, hail) occur during the event date and time.
Event Cancellation Insurance
This insurance reimburses businesses for revenues or expenses from events that had to be postponed or canceled due to unanticipated situations.
Contractual Bonus Insurance
This coverage is designed to protect the brand or club by guaranteeing your contractually assumed liability to award performance bonuses to individual sports stars or teams.
Prize Indemnity Insurance
Cash prize indemnity policies are designed to enable the insured to offer a cash prize for a chance to win a product or service.
As a result of this flexibility, businesses have the advantage of being able to provide their clients with a wider range of prizes and a greater opportunity to increase revenue through creative promotional tools.
Non-Appearance
If your business depends on revenue-generating events, non-appearance insurance may be the right protection for you. Incidents, such as accidents, sickness, family issues, and incarceration, are included in this coverage.
The program also contemplates indirect revenue correlated to their appearance.
Death and Disgrace Insurance
This insurance is designed for individuals or companies looking to remove the risk of insuring their advertising campaigns or sponsorship deals.
The policy typically covers your loss if your star becomes unavailable due to death, injury, arrest, breakdown in health, adultery, desertion of spouse/partner, bankruptcy, or any other reason where they are deemed to have suffered public disgrace.
This coverage does not usually provide insurance if the person has merely lost credibility with your desired target audience or if you do not wish them to feature in any further executions.
