Timely industry insights and opinions from the U.S. Risk team.


Growing Liabilities Restrict Insurance Availability For Live Events

By Scott Carroll, Executive VP/Program Director, Take1 Insurance
January 28, 2021


Strained workforces, dynamic local health regulations and heightened safety expectations have tightened the insurance market for live events.

As we kick off another year in the shadow of Covid-19, event producers need to blaze new paths to ensure they can insure their events amid external circumstances that can impact everything from deliveries to construction to attendance. The live event insurance market is, in a word, hardening.

A Tumultuous Time

Nearly all industries are currently struggling to operate at full capacity as repeated waves of infection necessitate lengthy worker quarantines and complicate on-time project completion. In the view of insurance carriers, the shortage of experienced workers available in the live events industry has increased the potential for accidents. At the same time, event promoters and their insurers are recognizing that even long-time industry pros can require more time or attention to regain full productivity after lengthy inactive periods.

Fluctuating local regulations regarding health ordinances and event capacities have also added uncertainty to the planning and insuring of live events. After repeated cycles of planning, production, and eventual cancellations, all parties involved are taking greater care in minimizing exposures and losses.

Direct Effects

As a result of these changes, finding insurers to participate in live events is becoming more difficult. Throughout the United States, rates are up, coverage limits are being restricted, and it’s becoming harder and harder to find multiple markets willing to participate in certain events, including excess insurance for live music. In many cases, the per-attendee pricing for “spectator liability” has doubled, while the number of carriers writing those policies has dropped by about 25 percent. Some carriers have been pushed out of the market due to the difficulty of rapidly adapting policies to ever-changing state-level requirements.

Cancellation coverage related to Covid-19 or communicable diseases is virtually unobtainable right now, leaving promoters with no recourse to recoup fixed costs if events are cancelled due to civil authority (local event restrictions or shutdowns). While some promoters tried to adapt through innovation with drive-thru concerts, most determined these events were not viable over the long term as they incur high costs with low return due to limited admissions. Insurers also became wary of this type of event, specifically concerning the introduction of moving vehicles for which the insured could be responsible.

For annual events that traditionally required similar coverage policies from year to year, carriers are now introducing new language such as “declared events” and “designated premises” that limit coverages to events that were expressly declared to the policy ahead of time. To cope with these changes, insurance agents may require more consistent communication and more detailed event information from promoters to ensure proper coverage.

Esports Tries to Break Out

The burgeoning market for live Esports events carries a much lower risk of spectator liability due to more limited in-person attendance coupled with a focus on live-streaming to remote viewers. The traditional concerns of insuring on-site equipment for these events can be enormous, however, as the total value of computer and audiovisual gear can far exceed what’s typical for concert policies. Additionally, broadcasting and live-streaming can introduce exposures related to media liability and professional liability. It’s likely that more carriers will look to focus on Esports-specific policies as the events increase in popularity.

A Hopeful Year Ahead

Regardless of the current difficulties, event promoters, venues, fans and insurers are all eager for live events to continue. Insurance coverages will be more expensive and potentially harder to source for the foreseeable future, but determined organizations that are prepared to work with carriers and provide more detailed event information will be able to insure their events. These trends will continue as long as the environment surrounding live events remains uncertain. We are cautiously optimistic that 2022 will begin to deliver a return to normal for the industry, and as always, we will continue to update insurance options to meet the needs of all kinds of events. ◼

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