| Example event | Non-refundable costs | Coverage limit | Base rate | Suggested risk tier |
|---|---|---|---|---|
| Corporate seminar | 25,000 | 25,000 | 1.60% | Standard |
| Outdoor festival | 120,000 | 100,000 | 2.90% | Elevated |
| Destination wedding | 55,000 | 50,000 | 2.25% | Standard |
| Product launch | 200,000 | 150,000 | 3.20% | High |
| Local fundraiser | 18,000 | 18,000 | 1.35% | Low |
- Total Non-refundable = venue + catering + vendors + marketing + travel + other
- NE = max(0, Total Non-refundable − Expected Refunds)
- Claimable Loss = NE × (S / 100)
- Insured Amount = min(Claimable Loss × (CP / 100), L)
- Total Rate = Base Rate + Add-on Rates
- Premium = Insured Amount × (Total Rate/100) × Risk × LeadTime + Fee + Tax
- Payout = max(0, Insured Amount − Deductible) × (Coinsurance/100)
- Break-even Probability = Premium ÷ Payout (when payout > 0)
- Enter non-refundable costs you could lose if cancelled.
- Subtract expected refunds to get net exposure.
- Set severity for full or partial cancellation loss.
- Choose coverage percent, limits, deductible, and coinsurance.
- Enter your base rate and any add-on rate assumptions.
- Pick a risk tier and confirm the lead time is correct.
- Press Calculate to see premium, payout, and break-even.
- Use CSV/PDF to share assumptions with stakeholders.
- Insurance may not cover every cause of cancellation. Always check exclusions and triggers.
- Some add-ons may require underwriting documents or special wording.
- Use a conservative severity if postponement or rescheduling is likely.
Net exposure drives the insured amount
This calculator starts with non-refundable costs and subtracts expected refunds to estimate net exposure. If venue deposits are 40,000 and refunds are 10,000, net exposure becomes 30,000 before severity is applied. Cleaner contract terms can lower exposure and reduce premium needs. Tracking refunds separately prevents overstating risk; refundable items should not be insured as exposure.
Severity and limits shape realistic claim sizing
Severity models partial disruption. At 60% severity, a 30,000 exposure produces a 18,000 claimable loss. Coverage percent then scales it, and the limit caps it. For example, 90% coverage on 18,000 targets 16,200, but a 15,000 limit would cap the insured amount at 15,000. If you expect some costs to be reused later, lower severity can reflect that recovery and avoid over-insuring.
Premium rate components and add-ons
Premium uses a base rate plus optional add-on rates. Default add-ons in this tool range from 0.10% to 0.30% per selected extension, and the base rate starts at 2.25%. If you select two add-ons totaling 0.35%, the total rate becomes 2.60% before multipliers and fees. Use the policy fee and tax inputs to mirror local charges; levies can change the total premium.
Timing and risk multipliers change pricing
Lead time adjusts pricing using built-in bands: over 180 days uses 0.90×, 90–180 uses 1.00×, 30–89 uses 1.10×, and under 30 uses 1.25×. Risk tiers apply 0.90×, 1.00×, 1.15×, or 1.30×, with a custom range of 0.50× to 2.50×. Entering an event date auto-updates days until event, keeping timing sensitivity consistent.
Expected-value view supports budgeting decisions
Probability does not change premium, but it helps budget. If cancellation probability is 12%, expected uninsured cost equals 0.12 × claimable loss. With insurance, expected cost adds premium and subtracts expected payout. Compare both bars to see whether the premium is justified for your risk tolerance. If expected savings is negative, you may still buy coverage for balance-sheet protection, contractual requirements, or reputational risk control during high-stakes seasons or travel bookings.
1) What should I enter as non-refundable costs?
Include deposits and payments you cannot recover: venue, catering minimums, supplier retainers, marketing spend, travel, and production costs. Subtract realistic refunds separately.
2) How do I use claim severity?
Use 100% for full cancellation. Use lower values for partial loss, postponements, or scenarios where some costs are reused. The calculator multiplies net exposure by severity.
3) Why is my payout lower than the insured amount?
Payout is reduced by the deductible and any coinsurance setting. A higher deductible or coinsurance below 100% lowers the insurer’s payment in the model.
4) Do add-ons increase premium even if I do not claim?
Yes. Add-ons increase the total rate used to estimate premium. They are priced upfront because they expand the scenarios where a claim could be triggered.
5) What does break-even probability mean?
It is premium divided by modeled payout. If your estimated cancellation probability exceeds break-even, the expected-value view tends to favor buying coverage, all else equal.
6) Is the premium here a guaranteed quote?
No. It is a planning estimate using your rates and multipliers. Insurers may require underwriting details, endorsements, and cause-of-loss terms that change pricing and coverage triggers.