Insurance risks and challenges for live music venues

Live music venues, nightclubs, karaoke bars and other licensed venues, have started to see an increase in insurance rates, most recently for public liability and property risks. This is a consequence of a hard insurance market^[1], principally driven by a reduction in underwriter appetite and a higher frequency of claims. The nature of music venues – which combine crowds with alcohol consumption – means there can be a higher risk for accidents, loss or damage to occur (trips and falls, physical assaults), increasing the potential for claims (injury or death).

Other risks for live music venues can include property damage, and event cancellation due to unforeseen circumstances such as a fire, storm, natural disaster or pandemic. Insurance for music venues can be complex and difficult to navigate. There can be exclusions on coverage or certain conditions that need to be met before a venue can safely operate. There’s no one-size-fits-all insurance cover solution – few insurers may be willing to take on all the risks for live venues – which means that renewal is not as straightforward as simply finding the best priced cover or package.

How to source competitive cover

At renewal time, the key to giving yourself the best chance in finding the right protection for your music venue at the most competitive price is to kick-start the review process early.

Marsh entertainment insurance expert and National Segment Leader, Simon Calabrese encourages his brokers to work with clients as early as 10-12 weeks in advance of their renewal date. He reminds clients, ‘Three months should provide sufficient time to thoroughly review and update your insurance policy. It sounds early, but it provides your broker with enough time to check whether your existing cover is still viable and determine the right cover and terms going forward, at the best possible rate.’ ‘Unfortunately there isn’t a silver bullet insurance solution for entertainment and music venues, so starting early will always give you the best chance.’

Lean on your broker for expertise

Simon recommends to consider working with a specialist broker who can drive the end-to-end process for you, share expertise and save you time. Your broker should assist you by:

• Providing a timeline of renewal so that you have ample time to review and understand renewal policy terms
• Guide you on ways to improve your risk profile, and suggest improvements you can make to keep costs down
• Provide you with a quality market submission to boost your chances of negotiating optimal terms for your cover with the underwriter – the better the submission the better the terms, and it’s difficult to convince underwriters to write the risk once a poor submission has hit the market
• Meet with you before they go to market for a suitable product so that you can review and discuss the market submission, ensuring your questions are answered
• Provide you with a second opinion before going to market, as a benchmark to your current policy.

Our Marsh entertainment brokers can help review your insurance policies and advise on renewal terms. We have been partnering with your industry associations, and supporting music and entertainment industry clients for more than 20 years, so we deeply understand your business challenges and risks. Above all, we can work with your to help you assess and determine the best market products for protecting your business.

For more information, contact Simon Calabrese on 0410018445 or simon.calabrese@marsh.com

¹Although the insurance market has moderated recently (Q3 2022), across the Pacific region (and Australia) insurance premiums have still continued to rise. This includes a 5% increase in property premiums and 11% increase in liability premiums. For more detail refer to Marsh’s Global Insurance Market Index Q3 report.