Insurer gets out of the rain

Hundreds of events may now have to be cancelled

The threat of bad weather has just taken on a whole new meaning for small event organisers, as getting insurance to cover against a rainy day now seems impossible.

David Smythe, Chairman of the Methven Playing Field Committee used Zurich's Pluvius Insurance every year to cover an annual fete.

The insurer would pay out if rain forced the event to be cancelled or caused a financial loss.

But a recent letter brought a shock. Zurich wrote to Mr Smythe - and all other Pluvius policyholders - to say that from 1 January, 2004, it would no longer be issuing new policies.

We are a small but fragile organisation, and we cannot afford to take the risk David Smythe, Methven Playing Field Committee

As Mr Smythe's committee relies on an income of £1500 from the fete - or from the insurer, if weather forces cancellation - the risk without insurance is too great, as Mr Smythe explained:

"We are a small but fragile organisation, and we cannot afford to take the risk of losing a lot of money if it rains.

"If it rains... then we do not run the event, and we have already incurred costs such as setting things up, hiring PAs and the usual costs that go with these things."

Dwindling demand

Zurich's Susannah Jeffery told Money Box that there is simply not the demand anymore:

"With the recent run of great summers, we have simply seen a diminishing number of people actually asking for this type of cover. People are much more willing to take a gamble on the weather.

"And when you are setting up a fete and you are on a small budget you are going to be looking to save as much money as you can, and many people are making the choice to cut their insurance costs."

We are going to be writing to all of our customers, leaving them a name and a number of somebody they can speak to Susannah Jeffery, Zurich

With the dwindling number of policyholders, Zurich decided it simply could not afford to service its customers in the way that they would want.

But Zurich's letter was brief, just two lines long, and it gave Mr Smythe no suggestion as to what he might do instead to get insurance cover in future. He told the programme:

"It was not very helpful, it just says thank you for using Zurich in the past for weather insurance.

"It is difficult because I have a feeling that Zurich were about the only people who were offering cover, so we are trying to explore new avenues to see if anyone is actually still doing it."

Search for cover

When Money Box searched for cover, it had no luck

On hearing this, Zurich was apologetic, and Susannah Jeffery claimed that it was taking steps to redress the situation. She told the programme:

"We are going to be writing to all of our customers, leaving them a name and a number of somebody they can speak to in Zurich who is going to be best placed to advise them on where they can go to get this cover going forward."

However, when Money Box contacted two insurers that Zurich suggested, neither was able to help.

The programme also contacted several other insurance brokers, some on the recommendation of the British Insurance Brokers Association (Biba), but again none of these companies could come up with the kind of bad weather cover Mr Smith needs.

It seems that if you are organising a very big event such as a festival or antiques fair, then there are companies that can help.

But if, like Mr Smythe, you want around £1500 of cover for a school or village fete, at the moment it seems impossible.

Zurich said that it issued 300 Pluvius policies to customers last year. So, hundreds of village fairs and school events may have to decide if they can afford to take the risk themselves, unless another insurer steps forward soon.

BBC Radio 4's Money Box was broadcast on Saturday, 24 January, 2004 at 1200 GMT. The programme was repeated on Sunday, 25 January, 2004 at 2100 GMT.