Canadian Underwriter

The show must go on

December 11, 2020   by Scott Carroll, Executive Vice President, Program Director, Take1 Insurance

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There’s no denying it: The effect of COVID-19 on the live events industry has been nothing short of catastrophic. An industry that at one time was riding higher than ever before was put on hold in an instant.

But live events aren’t gone for good. Until some sense of normalcy returns, every single person looking to stage a live event, experienced or otherwise, must creatively adapt in order to recover. And their insurance brokers and risk managers must follow suit to avoid a claims nightmare.

The live events industry will make a comeback because of an unprecedented pent-up demand for live entertainment. As a whole, the industry has been lucky enough to come out of previous national and global calamities relatively unscathed. For instance, after 9/11, people didn’t stop attending movies, concerts or sporting events. In fact, a recent report from Investopedia found that despite the lasting impact of the plane attacks on North America’s collective psyche, the economic and financial impact was fairly muted. Markets bounced back within months of the tragedy. In 2001, much like today, many were mentally anguished, but at least they were able to go out and entertain themselves.

The impact of COVID has changed that reality drastically, such that I believe there will be more events than ever before and people will be eager to attend. That said, until the risk of COVID is managed to the point that social distancing regulations can be relaxed, the live events industry will have to adapt and so will their insurance providers.

What is the concert industry doing to manage the risk? Many artists are presenting streaming concerts; fans pay money for tickets just as they would at a regular venue. And when concert-goers return to live venues in some form, don’t expect the virtual element to disappear. Given capacity limits and social distancing guidelines, concerts will continue to be streamed online, at least for the next several months, so as to not lose out on significant chunks of revenue.

That means the insurance industry must be prepared for a streaming element to concerts, as well as the associated risks, including internet crashes, malicious hackers, and more.

For example, a free virtual concert staged by the Israel Philharmonic Orchestra in June was disrupted by a suspected cyberattack, preventing tens of thousands of viewers worldwide from watching and participating in the event. Just imagine the claims scenario if those virtual viewers had paid their hard-earned money to attend.

Brokers and risk managers should ask the insured venues more questions to get a clearer sense of potential claims that may await. Most notably, what are they doing relative to their duty of care in managing the pandemic? This way, the broker and risk manager could provide recommendations on safety that the live event producer may not have considered. Our industry can provide this critical service to help clients navigate through these uncertain times.

Furthermore, from a business perspective, talking to a client about their specific business risks is a good positioning tool for the broker when pitching the insured to the insurance company. In other words, when an account is submitted to the underwriters, it’s never submitted blindly. Rather, the broker has spent some time discussing what the insured is doing to manage risk — especially if they’re in the public view. If a venue, for example, is taking all the necessary precautions to avoid a claim, that becomes a bargaining chip. When an insurance carrier likes what they hear, they become more comfortable insuring a particular client, raising the likelihood of that account being accepted.

Of course, live events are not limited to the traditional venue. Prior to COVID-19, the industry was expanding at an unprecedented rate across the world. Citing an August 2019 report from Allied Market Research, the global events industry was valued at $1.1 billion in 2018. It is expected to grow by 10.3% (or $2.33 billion) by 2026.

The reasons for staging a live event are various: increasing business profitability, celebration, entertainment, and supporting community causes, among others. The scale can range from a massive corporate event down to a local carnival.

One example of a local event is organized by a large brewery insured by our company. Before the onset of the pandemic, they routinely staged concerts for around 1,000 people per show. The brewery also happens to own a large field not far from their location. When COVID struck, they saw an opportunity to get creative. An event service firm provided a stage and the brewery began hosting a series of socially-distanced concerts. Each party separated into their own individual squares — six feet apart.

From our perspective, as live event insurance providers, this was anything but ordinary. This really isn’t a venue and we’re not dealing with a concert promoter. However, this was a forward-thinking entrepreneur who saw an opportunity to fulfill a consumer need. They were willing to provide detailed answers to the areas of concern we identified. Together, we made the concert work safely for everyone involved.

Even though, from a risk management perspective, not all of the things you would look for were present, together with the client, we were still able to manage this event as effectively as possible.

That’s a service we should be able to provide. We will have to adjust as clients continue to capitalize on a desire for safe and engaging entertainment options.


Based in California, Scott Carroll is a commercial broker/underwriter focused on live event safety.

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