Insurance Helps Weather-Related South Dakota Event Cancellations

By Jeff Bahr, Aberdeen American News | October 3, 2014

Event organizers often do more than hold their breath and hope for success. Sometimes, they hedge their bets when they plan an entertainment venture.

Insurance seems like such a dull subject that it would have no place in the entertainment world. Policies, though, are necessary and sometimes even helpful for those who put on concerts, county fairs, centennials and ski shows.

But it can be a throw of the dice. Groups organizing a concert may purchase a policy to limit their losses if the show is canceled due to bad weather. The investment doesn’t always pay off.

It was a rough year for some event organizers, the Aberdeen American News reported.

The Beach Boys concert scheduled for Aug. 6 at the Sioux Empire Fair was canceled because of rain that fell before the concert. The fair did have an insurance policy for adverse weather.

“And we did collect a small amount, but not enough to cover the show,” said Scott Wick, president and CEO of the Sioux Empire Fair Association.

Sawyer Brown was not able to perform at the Roslyn Centennial on June 21. Organizers had insurance for the concert, but were not compensated because the rainfall didn’t equal the amount required in the agreement. Roslyn residents, though, were able to get the band to return Aug. 9.

The concert was the only part of the centennial weekend that Roslyn organizers insured, said Kelly Hanson, one of the co-chairmen.

The organizers of Frosty’s Summer Bash, held June 28-29 at the Brown County Fairgrounds, had rain insurance. But they weren’t compensated.

“I wish. We missed it by an hour and a half,” said Georgia Smith of the Snow Queen Festival, which put on Frosty’s Summer Bash.

The rain that fell on the opening day arrived before the event started.

Smith, who has been involved in many music events over the years, doesn’t normally buy weather insurance. She purchased it for Frosty’s Summer Bash because rain was falling regularly at that time of year.

In the insurance agreement, the concert organizer must fill in at least three variables. The group buying the insurance has to decide the level of expense it wants to insure.

“The more you insure for, the more the policy costs,” Hanson says.

The group must specify how much rain is needed for the policy to pay off. A time frame must also be specified.

In addition to rain, insurance policies may guard against a host of other weather problems, including high wind, hail, lightning and extreme heat.

The Brown County Fair does not buy insurance for its concerts. But it might be something the fair needs to look into, said fair manager Amy Scott. This year, the fair was worried about rain forecast the night of the Willie Nelson concert. But a few sprinkles near the end of the show didn’t bother the veteran entertainer, who just kept singing.

Trail Days takes place every June in Ipswich. The policy that Trail Days buys will pay off if one-fifth of an inch of rain falls in a three-hour period. One band appearing in Ipswich, Black Hawk in 2005, had to be moved downtown. But no Trail Days concert has ever been called off. Trail Days has never received any insurance money.

“We’ve got rain a lot, but never got rain at the right time,” said Trail Days organizer Nathan Davis.

The Sioux Empire Fair doesn’t buy event insurance every year, Wick said. In some cases, the policy must be purchased at least 10 days prior to an event.

“In South Dakota, that’s like playing blackjack in Vegas. You can wake up to a beautiful blue sky in South Dakota and mid-afternoon or evening you’re getting rain,” Wick said.

Plus, there are different ways of measuring the rainfall. One method is relying on National Weather Service figures at the airport.

The airport is a long way from the Brown County Fairgrounds, noted Smith, explaining that, sometimes, it’s raining at the fairgrounds, but not in Aberdeen.

You’ve got to guess very correctly to hit the insurance jackpot. One agent told Wick that people collect on weather-related insurance only about 15 percent of the time.

One type of insurance that many businesses and events must have is liability. Trail Days has liability insurance on its grounds year-round.

“This day and age you almost need it,” Davis said.

Liability insurance is a necessity for a water ski team. Like other ski groups, the Aqua Addicts have a $1 million liability policy through an organization called USA Water Ski. Every member of the Aberdeen Aqua Addicts has to contribute. Each member pays $50 to $80 a year, depending on age.

“If you don’t have a million dollar liability policy, you are not allowed on a public lake,” said Todd Thorson, the head of Aqua Addicts.

Vendors and subcontractors at the Brown County Fair have to provide Brown County with proof of insurance that names the county as additionally insured. That’s true of any group that leases county property.

During the fair, more coverage is required from the operators of the carnival because it is a higher-risk event, according to county auditor Maxine Fischer.

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