The excitement around live events has never been higher, but so are the concerns of organizers, operators and vendors.
As live events continue to roar back, event producers, organizers, live event service providers and equipment rental houses are looking to secure the long-term financial health of their businesses. Many are reevaluating their existing insurance policies to verify that potential claims, such as equipment damage in transit, loss through voluntary parting or damage to third-party equipment are covered for full replacement cost.
Many policyholders incorrectly assume that they have appropriate coverage in place—so now is the time for insurance agents to check in with their existing policyholders to determine if the policy meets the needs of their business.
One major coverage option that should be addressed is voluntary parting, which occurs when a third party acquires and steals equipment through fraudulent means, such as providing fake documentation or banking information. Most property policies exclude voluntary parting as a covered peril, so agents and policyholders should discuss this scenario and how it could impact the insured's business.
The coverage territory is an important consideration as well, dictating which physical locations are covered. Most property policies provide coverage in the U.S., Puerto Rico and Canada. Specialized carriers often offer worldwide coverage by default, which means all gear is covered regardless of location.
For non-owned equipment, such as semi-permanent stage, audio or lighting gear shared by all performers or vendors through an event, insurance protection is provided through care, custody and control coverage. This also applies to rental equipment. If a policyholder is working at a large festival where they are required to operate someone else's front-of-house soundboard, any damage caused to the equipment through negligence while that gear is under the care, custody and control of the policyholder is covered. This provides peace of mind for both operator and owner and helps simplify and expedite financial restitution in the event of a covered loss.
Nearly all live events involve transporting expensive gear, making transit coverage another critical insurance protection. Instead of hoping a motor truck cargo policy covers losses, policyholders with an inland marine policy are protected against losses in transit, whether the incident occurred in the possession of an employee or a third-party transportation company. This ensures that if a transportation partner has an accident and equipment is damaged or destroyed, the motor truck cargo policy does not need to be solely relied upon to apply, which rapidly resolves any issues.
Lastly, a key policy feature to review is whether coverage insures equipment to replacement cost or actual cash value. Motor truck cargo policies typically operate under the actual cash valuation model, which depreciates over time. But since new equipment is virtually always more expensive than the depreciated value of existing equipment and new purchase prices also tend to rise over time, working with a specialized carrier means full replacement cost coverage is a standard policy inclusion.
The excitement around live events has never been higher, but so are the concerns of organizers, operators and vendors. Successful events involve the coordination and collaboration of many different stakeholders, tons of moving parts and inherent risks of weather, crowds and unscrupulous businesses or partners. With proper insurance coverage, live event companies can focus on doing their job well without worrying about potential disasters or incidents.
Scott Carroll is senior vice president at Take1 Entertainment Insurance.