Cancellation cover, in terms of travel insurance, means that if something goes wrong and it is necessary and unavoidable to cancel your trip before you head off, you may be able to claim back money you otherwise have lost (up to the amount stated in your insurance policy).
Cancellation can provide cover for the cost of cancelled flights, hotels, visas, tours/excursions, paid-for activities or sports, prepaid meals that are non-refundable, up to the amounts specified in your policy, and less any applicable excess.
If you booked your trip through a travel agency and they charged you fees, you might be able to claim back some of these costs too, depending on your policy.
For full details of the benefits, terms and conditions, limits, sub-limits and exclusions that may apply, please refer to the relevant Product Disclosure Statement (PDS) here.