Music Festivals are Complex Insurance Risks

by Sterling Risk Advisors

Paul Pelt, Sterling Risk Advisors

Over the last few years, we’ve witnessed disasters at music festivals in Europe, Canada and America that have tragically illustrated the copious potential hazards entailed with such events.

We are thick in the middle of music festival season and concert organizers, tour managers and all parties involved today are under more scrutiny than ever.

Music festivals can be convoluted risks and it’s crucial that organizers obtain the correct insurance policy, especially one that is not encumbered with surprising coverage exclusions.  Fundamental in the basic underwriting process is factoring the capacities, performers/genres, venue location, staging setup, type of security, vendors, volunteers, third party equipment, amount of owned or leased equipment, alcohol sales volume and several other elements.

Whether you are a promoter for a festival or another party involved with the production, careful deliberation of the various exposures, applicable contracts and obligations is a necessity.

The indemnity agreements of particular contracts should also be considered.  Within this section of a contract, some of the costs of insurance could be transferred to vendors – some promoters choose to carry the coverage on the vendor’s behalf, or within a contingent policy through the help of an endorsement, as a protective measure (in the event any uninsured vendors are discovered at the time of loss).

However, vendors (alcohol, food, sales and non-sales operations, etc) should carry individual insurance coverage, and indemnify the event organizers; reviewing actual copies of a vendor’s policy will shed light on any unfavorable exclusions that may exist. Promoters should also discuss the request for being added as an additional insured to their vendors’ policies. Other coverages that promoters should contemplate, and may require, are event cancellation, liquor liability, non-appearance, adverse weather, inland marine, workers compensation, hired and non-owned auto liability and excess liability, to name a few.  Also within the realm of festival-related insurance are the coverage needs of entertainers (artists/bands, musicians, DJs), from the touring liability complexities and contingency coverages to the musical equipment and instrument exposures involved in their traveling productions.  Most established acts will have touring policies; however, promoters should review with all parties’ business managers upon the occurrence of each event or festival.  With the unpredictability that comes with music festivals and related risks, and in consideration of our litigious society, it’s imperative to shrewdly protect your investments by understanding the financial impact associated with indemnity and defense costs that could apply to an unforeseen claim, and all potentials for loss, and choosing to cover appropriately. It goes without saying, but promoters and their attorney/s should always give full attentiveness to all contracts and coverages, and also be confident that their policies are placed with a broker and carrier that specialize in, and understand, these risks.

Paul Pelt is a broker with Sterling Risk Advisors specializing in general commercial insurance, commercial real estate, senior housing, industry-specific professional liability and entertainment risk management.

He can be reached at (678) 424-6511;;

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