Music Festival Insurance Balancing Coverage with Costs.

Event insurance for music festival entities is a cost that cannot be avoided because it often includes coverage required for legal compliance. In addition, the multitude of adverse factors that can impact any outdoor festival mean without insurance entities could face huge financial losses. How can organisers balance the coverage they need with the rising cost of premiums.

Music festivals are currently being faced with rising operating costs that are forcing up ticket prices for festival-goers and making it difficult for entities to make a profit. One of the fastest rising operating costs for outdoor music festivals is insurance. Insurers have become more selective about what they will and will not provide coverage for and for many organisers they are increasingly faced with larger deductibles (excesses). It has become a fine balancing act to obtain the appropriate insurance at an affordable price and now requires disciplined risk management that is demonstrable to potential insurers to reduce premiums. How can organisers implement initiatives that reduce insurance costs yet provides suitable coverage.

Critical Coverage vs. Optional Coverage.
Mandatory insurance is required for any business that employs people usually called Employers Liability Insurance, in addition they will need Public Liability Insurance and, in some cases, Professional Indemnity Insurance. On top of this an organisation operating an outdoor music festival will need specialist event insurance. Thers are specialist insurers who usually provide customisable policies that cover a wide range of factors. For festival organisers critical coverage would usually include Event Cancellation, Property Damage and Equipment Insurance. Optional coverage that is increasingly important can include Cyber Insurance, Environmental Liability, Money Insurance, and Terrorism Cover. The optional extra coverage covers the organisers for losses incurred from cyber-attacks, cashless payment failures, data breaches, ticket fraud, and environmental pollution, for example. When deciding on the level of coverage required it is essential that organisers work closely with contractors who must evidence their own insurance coverage. This ensures that there is adequate coverage for all equipment and activities on a festival site, for example.

Recent Factors Influencing Insurance Premiums.
Obviously, the biggest impact on the event insurance market in recent times was the coronavirus pandemic that led to numerous festival cancellations. At the time not all insurers honored claims made, and it led to future policies including specific exclusions and re-wording of policies to avoid a plethora of claims for similar future occurrences. Other factors heavily influencing rises in premiums are the increases in claims for the effects of extreme weather, rising injury and liability claims and the increased cost of replacement equipment, for example. The biggest insurance cost for organisers is the purchase of event cancellation insurance, and insurers have increased premiums significantly in recent times. This reflects the perceived risk which insurers see as increasing and includes extreme weather, artist cancellations, infrastructure failure, government restrictions (increased regulatory compliance oversight) and civil disturbances.

Cost Reduction Initiatives for Festival Organisers.
Festival organisers can reduce insurance premiums by choosing the cheapest quote, reducing coverage or increasing deductibles; however, this often leads to a reduction in coverage. There are some initiatives that organisers can consider to reduce premiums but retain suitable coverage. A key aspect that insurers consider is previous claims history so where possible organisers should avoid making unnecessary low value claims. Insurers are also keen to see high levels of risk management practices by organisers as this limits exposure from future claims. Organisers should aim to produce high-quality detailed risk assessments that include plans for crowd management, emergency procedures, traffic management, medical facilities, weather monitoring systems, security management, sustainability and contractor competence records. In most cases, the more evidence submitted to an insurer, the better the underwriting assessment, resulting in lower premiums. Some insurance specialists can reduce premiums quoted if multiple policies are bundled together from a single provider and is worth considering when shopping for the best policies. An organiser can further reduce risk by employing the latest technology, and insurers often look at these initiatives favorably. This can include increased CCTV monitoring, smart crowd density analysis, digital incident reporting, GPS asset tracking, temporary structure monitoring sensors, and sophisticated access control systems.

Future Trends.
The event insurance sector is expected to change over the next 5 years with increased data driven underwriting where they use a festival's live operational data from crowd management, and weather monitoring to price risk more accurately. Expect a bigger focus on cyber resilience where festival organisers will be expected to implement robust cybersecurity controls along with staff training and incident response plans. Insurers are shifting their coverage focus to more critical or catastrophic incidents and may insist on higher deductibles for routine disruptions which are low value but admin heavy claims for example.

For festival organisers planning their next event using a software management platform like Festival Pro gives them all the functionality they need manage every aspect of their event logistics. The guys who are responsible for this software have been in the front line of event management for many years and the features are built from that experience and are performance artists themselves. The Festival Pro platform is easy to use and has comprehensive features with specific modules for managing artists, contractors, venues/stages, vendors, volunteers, sponsors, guestlists, ticketing, site planning, cashless payments and contactless ordering.

Image by  Alexander Nadrilyanski via Pexels

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