Be it conferences, exhibitions, festivals, musicals or private celebrations—if you have ever planned an event, you know how many things can go wrong anywhere, anytime. Frazzled event planners have long turned to experts that specialise in Event Insurance, instead of using general brokers/advisors, for greater peace of mind.
What unique risks do the suite of Event insurances cover? Why should a business seek specialist advice in relation to Event insurances, instead of dealing with general brokers/advisors?
We posed these questions and more to JLT Australia’s Event Insurance expert, Simon Calabrese, for his insights.
1. When should a business consider seeking specialist advice in relation to Events? Why should they seek specialist advice when they may already have a general broker/advisor appointed?
From the very moment that an organisation or business starts to consider running an event, they should engage with a specialist. The advice that a specialist events broker can provide, at the very outset of planning, can greatly assist clients in; identifying events-specific risks, the formulation of a risk management plan, navigating the insurance and indemnity aspects of artist, venue and supplier contracts and ultimately ensuring that all risks are adequately identified and transferred via suitable insurance solutions.
2. “Events” is a broad term that covers across scale and functions. What are the overlapping risks and what are a few of the more niche risks that can give us an idea of the variations across the Event insurance landscape?
The term Event is self-explanatory, however, the risks associated with events encompass more than the event itself or indeed the event promoter. All suppliers, artists, contractors, consultants and principals have an overall bearing of the total risk as well. Each individual or organisation will have their own specific risk profile related to an event and will, therefore, require appropriate risk advice and tailored insurance solutions.
The common risks that overlap between promoters and suppliers would generally be; public liability, general property, workers compensation, voluntary workers personal accident and other ancillary risks such as travel and motor.
The more niche risks associated with events are the contingency lines of event cancellation and non-appearance as well as slight variations of traditional risks such as Festival Money Cover. With the emergence of RFID payment wrist-bands at festivals, there is an increased exposure in relation to cyber-crime which event promoters have only recently started to truly understand.
3. What events require specialist advice from a broker such as JLT’s Entertainment & Leisure Specialty business? How does specialist advice add value to the client in these cases?
With my “marketing cap” on, it would be remiss of me not to mention that JLT Australia’s Entertainment Website provides a “beginner’s guide” to the different risks associated with events and the broader Entertainment Industry.
All events “big and small” require advice from the very outset for the variety of reasons outlined in the above questions.
4. In your experience, what usually goes wrong in events? How do the above insurances help?
Some of the more frequent claims are generally property based; be that damage to a mixing desk that has liquid spilt over it, a fire in the costumes department of a theatre, a forklift backing into a stack of speakers, misplaced instruments in transit via air or simply items stolen back-stage at a show.
Whilst cover for the repair and replacement of property can be purchased via general property and/or marine policies, they are normally a lot more expensive and more restrictive in cover than a specialist Entertainment & Events Property Policy. Additional benefits such as “Emergency Hire”, “Breakdown Cover”, “International Freight Costs”, “Automatic Worldwide Cover” and “Hired/Borrowed Equipment” are generally only available via policies specifically tailored to the Entertainment & Events industry; such as JLT’s Musical Instrument and Entertainment Equipment Policy Wording.
If I’m ranking from a frequency perspective, then event cancellation (contingency insurance) would rate quite high for events. Be that cancellation or postponement due to weather-related risks, bushfire risks, venue damage or even threat of terrorism, there are a significant number of reasons why an event or tour is cancelled. Cancellation to non-appearance of a principal performer also ranks highly; be that due to illness, travel delay or death of a family member. Globally, we are seeing scores of large events per month cancelled or postponed for a variety of reasons. Contingency insurance looks to cover the associated costs and lost revenue of the promoter when an event is cancelled or postponed due to a circumstance beyond the control of the promoter.
Whilst public liability claims tend to be less frequent, personal injury claims such as crowd surge/crush or stage collapse can represent very large aggregate losses that no event promoter could financially absorb. Financial loss and compensation aside, without adequate legal representation and nimble public relations consultants at hand, such a loss could be crippling to the business and indeed the reputation of those associated with the event. Having the right insurance program in place with insurers that understand your business and a broker/advisor that can best represent your interests is critical when such a loss arises.
5. How are events risks changing over the years? What are the emerging risks in this area?
One of the most notable “emerging” exposures that has continued to become more of a concern for event promoters, is the more frequent incidence of terrorist attacks across the globe. Whilst terrorism is not necessarily an “emerging” risk, the frequency of terrorism has meant that the contingency market has had to provide different options when looking to cover terrorism risks for events. Only specialist brokers will truly understand a promoter’s risks when it comes to terrorism and advise on whether global terrorism cover might be needed as opposed to a more restrictive Time & Distance terrorism, as well as ensuring that the “threat” of terrorism is also included in said policies. Each event is different and a “one shoe fits all approach” simply won’t be adequate when tailoring an insurance program for an event or tour.
As alluded to above, the emergence of RFID payment wrist-bands at festivals has brought about a relatively new and emerging risk in relation to cyber-crime. It is important that event promoters look to discuss this exposure with their broker and determine whether or not there is adequate protection provided by the merchant, who is responsible for the collection and storage of customer data and what safeguards are in place to protect this data. From here a specialist will be able to provide advice in relation to potential improved IT security as well as appropriate risk transfer options.
6. What's the strangest/most notable case that you've come across in your career?
To be honest, I know that the entertainment industry is known for some interesting claims and/or needs but I haven’t seen anything in the past 16 years that was that out of the ordinary. The more interesting claims generally relate to event cancellation and prize indemnity:
A number of years ago I was involved in a claim whereby a prominent DJ was scheduled to perform as a headline act on an Australian tour. On his way to Australia from America, the DJ’s full catalogue of vinyl went missing in transit which meant that the entire tour had to be cancelled as the DJ could not perform!
Some events and entertainment industry organisations tend to use prize indemnity or prize insurance policies as a way to attract more patrons or simply promote their brand and event. I was involved in a promotion which was quite normal but was made a lot more interesting due to the numerology aspect of the promotion. In 2009 I was working with a prominent casino that wanted to run a large promotion for their VIP members. The event was held on the 09/09/09. During the party one lucky member got his name drawn from a barrel and was asked to come to the stage at 9.09pm. He was then asked to pick a number on the roulette wheel, from memory it was 26. The wheel was spun, the ball was dropped and at 9.09pm on the 09/09/09 the ball landed on number 26 and the lucky member won AUD 999,999! Fortunately for the casino, they had purchased a policy to protect them against the 1 in 37 chance of the member’s number coming up, which meant that the prize was paid by the underwriter, not my client.
For further information, please contact Graham Edwards, Regional Director of Sales and Marketing at Graham_Edwards@jltasia.com.