A Changing Live Event Insurance Landscape; Coverage Restrictions in Today’s Market Requires Critical Policy Reviews
There are a wide variety of possible liabilities associated with a single live event. Each has its own share of challenges and unpredictability, meaning even the tiniest misstep could spell disaster. That’s why live events have always required special attention and unique insurance coverages to ensure the most robust protection possible.
As the live event insurance market emerges from the pandemic, it enters an environment where attaining coverage is more complicated than before. Carriers are restructuring existing policies to reflect updated risk calculations and introducing new targeted exclusions that remove their responsibility to provide coverage for damages and losses that arise in certain COVID contexts.
Therefore, agents who want to grow their businesses in the current environment must stay up-to-date on their carriers’ changes.
Get to Know What You Don’t Know
As various carriers tweak their coverages, agents should talk with them to ensure they’re aware of any major changes to their existing clients’ policies and determine if those changes will hinder their ability to secure future coverage. For example, clients with a general liability policy for daily operations may wrongly assume they are covered for a special event, whether on-site or off, creating a situation where one wrong assumption could lead to a calamitous result.
Even when a policy covers special events, it may only do so for events individually declared to the policy. In this scenario, a declared events exclusion often makes it clear that only declared events are covered under the policy.
Another critical live event coverage is for spectator liability, which provides protection if someone slips, falls and sustains an injury during an event. As the name suggests, this coverage does not extend to staff, performers or other paid participants.
Furthermore, some policies can exclude spectator liability altogether. If left uninsured, a client could be on the hook for any injury at their event — whether it be a customer, talent, stagehand, crew or independent contractor.
It’s also vital to review policy exclusions, which narrow the scope of coverage provided by the insuring agreement. Live event exclusions may list items such as tents, bleachers or thrown objects as non-covered incidents.
These could leave clients open to significant liability if guests are injured by a falling tent or collapsed seating structure, for example. Agents should look carefully at the exclusions for each of their clients’ policies to mitigate any gaps or deficiencies, while offering the necessary resources and expertise.
Get Ahead of It
Carriers scrutinize policy terms to ensure policyholders provide all the detailed information they need. Providing such information is now taking more time and preparation than in the past, so agents must manage their work accordingly to ensure clients have enough time to fully evaluate their insurance needs and potential exposures in accordance with carrier deadlines.
For existing clients, agents can prove their value by identifying any changes to open policies, then communicating them to the client with suggestions to limit potential exposures and liabilities. Any agent branching into live events for the first time is advised to speak with all their partners to determine which carriers and policies offer the best mix of protection and value, and any untenable policies due to exclusions or coverage limits.
Ask About Everything
The threats facing live events today range from violent assailants and crowd stampedes to cancellations due to weather or local health regulations. With more variables than ever before, the market for cancellation coverage has tightened significantly. To ensure proper coverage and help event organizers succeed once they are on site, it’s vital to ask many questions, including some that may not have been as important in the past.
Regardless of the size or purpose of your event, there are several core questions agents must ask their clients.
Where are the entrances and exits located, and how many are there? Will the event provide security? If so, is the security company well-insured, and is their staff trained for this specific type of event? Do they have an evacuation plan in case of an emergency? If so, how long will it take? Does each vendor have its own insurance policies? Does the event organizer know the details of each policy? What’s the plan if there’s an active shooter situation?
These questions can help your clients sort through event details and find the right choice for them. Carriers that offer specialized live event policies are likely to provide better protection, making all the difference, especially for clients who host multiple events.
If a business hosts a one-time event, it must make sure it’s been declared to its policy. If it’s a monthly event, each one needs to be specifically declared with the date and relevant details. This may require more interaction between the agent and client, and it’s entirely possible carriers will continue to implement changes that affect new and existing policies.
Setting Up for Success
Everyone associated with live events is excited about their return. Fans are coming out of their homes and experiencing all they missed from a pre-COVID world. Performers are back on the road, and venues are happy to accommodate. But, for insurers and their clients, running an event may never be as simple as it once was. Various new and heightened threats to event operations have forced insurance carriers to alter how they evaluate events, what coverages they offer and at what price, limiting options for agents and their clients.
Carriers now require detailed information about every aspect of an event to determine their policies, rates and coverage options. So, agents and their clients will likely need to invest more time to gather all the relevant facts.
Agents play a critical role in making sure clients are aware of any changes or potential coverage gaps that can leave them vulnerable. By staying informed of carriers’ new policies, reviewing existing policies and working closely with clients to gather detailed event information, agents can help live event hosts and organizers again entertain millions safely and confidently.