Concert Insurance

concert insurance

Introduction
Radio broadcasters are often involved in concerts be it as the host/organizer or as a supporting sponsor. And this is not just with respects to groups with distinct concert/event business units such as Townsquare Media, iHeart Media, and Galaxy Communications but also with respects to individual stations which organize or sponsor a concert as part of their station identity. Concerts are exciting and can be an important part of your engagement with your listeners and community. Here are some suggestions to help you minimize the risks and insurance expenditures associated with your concerts.

Get An Early Start
Getting an early start in arranging the insurance for a concert is very important. Your insurance agent works to arrange the best coverage at the lowest cost possible. But, if you first contact your agent the week of the concert to discuss the insurance your agent may run into time constraints. And you could end up with less than optimal coverage at excessive costs. Venue lease agreements are typically signed months in advance of a concert – get in contact with your agent early on (more about the venue lease agreement below).

What’s Happening?
The word “sponsor” is often used very broadly. We have seen some situations where it has meant that the radio station is the host/organizer of the concert — leases the venue, hire talent, makes arrangements for security, sound/light/stage and other considerations. And we have seen other situations where “sponsor” has meant that the radio station is adding its call letters and logo to the promotion of the event, is conducting over-air spots, and is doing a remote at the concert, but that the concert is otherwise entirely organized by another party such as Live Nation. The risk and insurance considerations under these two definitions of “sponsor” are dramatically different. We ask of our broadcasters that they complete a brief Certificate of Insurance Request/Event Questionnaire so that the broadcaster, our risk management team, and insurance company underwriter are all on the same page.

Venue Lease Agreement
Buried within a lease agreement are the insurance and indemnification provisions. Prior to the concert you will have to provide the venue with a certificate of insurance demonstrating that you are in compliance with the insurance provisions of the lease. Make sure that your insurance agent is aware of the insurance requirements under the lease. The indemnification provisions of a venue lease agreement are often very detrimental to you, the lessee of the venue. A typical indemnification provision requires that the lessee “…defend, indemnify and hold harmless the Lessor from any and all liability however associated with or however arising out of the Lessee’s lease and use of the venue and associated parking facilities for said event”. So, if the venue lessor is providing security allegedly gets too aggressive in intervening in an altercation between patrons thereby causing patrons to sustain “…serious and permanent injury…”, you are then contractually responsible for those claims. Review the indemnification provisions of a venue lease agreement very closely BEFORE the agreement is signed. Sometimes a venue will agree to a softening of the indemnification provisions wherein “…except for claims or injury arising out of the negligence or actions of the Lessor or Lessor’s agents” is added.

Certificates of Insurance
Depending on the scope of activities at your event you may have to engage concessionaires, security, sound/light stage and other contractors. Require of your contractors that in advance of the event they provide you with a certificate of insurance displaying information as to their general liability, liquor liability (if applicable), and workers compensation insurance coverages. Send all COIs to your agent for review. And if your event has exhibitors and vendors, they as well should provide you with COIs. Requesting COIs is a routine, commonplace practice. For example, the venue is going to require that you provide a COI as proof of your insurance coverages. A satisfactory COI from a contractor is your assurance that the contractor will be able to address complaints arising out of its services. If you get push-back when requesting a COI it could mean that there is a problem, such as the contractor not having insurance. And, if the contractor does not have insurance and something bad happens, guess who gets stuck with the claim? Probably you, the third party that hired the contractor.

Do Your Diligence with Respects to Outside “Promoters”
Often times a broadcaster will engage an outside promoter to arrange and manage a concert for the broadcaster. It could be that the broadcaster has not conducted a concert before or that the size and circumstances of the concert are such that the broadcaster feels the need to bring in a professional concert promoter to arrange and manage the concert. Evaluate very closely the split of responsibilities between you and the outside promoter and monitor things closely to make sure that the promoter fulfills all of the promoter’s obligations, especially with respects to the insurance for the concert. A critical consideration is that the venue will hold the party that signs the venue lease agreement to be responsible for providing the insurance for the concert. So, if your agreement with the promoter stipulates that the promoter is responsible for the insurance for the concert but you then sign the venue lease agreement, insurance complications will arise.

Event Cancellation and Non-Appearance Insurance
Organizing and conducting concerts can be expensive with a lot of up-front and sunk costs. If the concert is canceled or impaired due to weather, talent non-appearance or other cause, significant financial losses will be incurred by the broadcaster. Event cancellation and non-appearance insurance is available but the underwriting process is extremely time sensitive, and full payment must be received by the underwriter in advance of the event. Do not procrastinate if the size, cost or circumstances of your concert warrants event cancellation and/or non-appearance insurance or you could be stuck without.

Make It Formal
The insurance for your concerts will be handled more efficiently and at lower costs if you establish and implement a set of formal guidelines which incorporate procedures such as those discussed herein. Formal guidelines can easily, and repeatedly if necessary, be shared among your team members and communicated to others involved in your events. Further, by establishing formal guidelines, the various risk management tools are strengthened. For example, in requesting a COI from a security company, your concert coordinator can just state “Sorry to press you on this but Corporate requires that we get COIs from security and all event contractors”.

Coverage availability and pricing subject to underwriting. Preston-Patterson is licensed in all states and Washington D.C.

Contact: Stephen W. Patterson, MBA, CPCU, steve@preston-patterson.com, 800-516-5199 ext. 111