Even the innocent can get caught up when an untimely incident befalls an event. Here’s what you need to know.
by Scott Carroll, EVP & Program Director, Take 1 Insurance
Your sound system is hanging perfectly from the trusses on either side of the stage, your lighting equipment is flown brilliantly from the trusses, your video wall is standing as the backstop to the stage. It’s all there, ready to go after this event to the next show. But you can’t touch it. That’s because it’s now part of a crime scene.
There are risks looming as we head into the 2018 touring and outdoor event-production season. These come from a number of directions: weather that can wreak havoc with staging and bring it crashing down on concertgoers, violence and mayhem from terrorists and other evildoers, even perpetration of fraud. From an insurance perspective, the focus of most of these incidents is on liability: who’s at fault, how that’s determined, who pays whom, and how much and when.
But there’s another aspect of this that’s less discussed but that can leave companies who become embroiled in these scenarios hanging — literally. Anything that’s part of a crime scene has to be left untouched, including possibly, the sound, lighting and video systems that are deployed at events of all sizes, from a pair of speakers on stands and a few LCD displays to tour-level PA systems and giant LED video walls. Those are the tools of the trade for the vendors that support these events, but when incidents like those mentioned occur and damages ensue, criminal and civil investigations around them can tie up assets like these for weeks and in the worst scenarios for months, or longer.
There are standard insurance products that can be used for certain types of situations in which a company or individual cannot conduct business as usual. Known as business-interruption insurance, they cover the loss of income that a business suffers after a covered cause of loss. One of its trigger mechanisms however, for the coverage to apply, is that there must be damage to the property covered before BI can be triggered. But the scenario described here is materially different. The equipment is perfectly fine and serviceable, but it cannot be accessed due to an ongoing investigation that requires a location to remain pristine. That requires language within a policy that does not require property damage to be a determiner for Business Interruption to kick in, as most inland marine policies do..
Take 1 has what we call our Combined Crisis Cover product, designed specifically for the live and special-event industry, and which provides immediate coverage of up to $35 million annually in the event or threat of “malicious acts,” including terrorism, active assailants and other antagonists who interrupt or cause the cancellation of a planned live event.
Combined Crisis Cover is part of a trend in the insurance industry that recognizes that the world has changed. Insurance companies aren’t just service vendors to event production providers, we’re partners with you, because we share in your upside and your downside. When things go as they should, we collect premiums that are kept affordable by an intricate mechanism of reinsurance and other industry strategies; when they don’t, we may be the first line of economic recourse for you and others affected. So this essay today isn’t about selling an insurance product; it’s about informing you that the way you’ve gone about protecting yourself has changed, and our industry has changed with it.