The event industry is grappling with increasingly complex risk profiles, and as Damian Schleifer (pictured right), executive vice president at Front Row Insurance Brokers, explained, this is particularly evident in live performances and digital media.
Speaking to IB, Schleifer identified two major areas of focus: live events, such as concerts, theater, and performing arts, and the growing digital transformation, including streaming services. These sectors face evolving challenges, from logistical concerns to cutting-edge technologies like artificial intelligence.
"It was difficult. A lot of performances were canceled," he said, noting the slow recovery process even as the industry ramps back up. While there’s more activity now, it has introduced new complexities in securing insurance coverage, particularly with insurers tightening their capacities.
"It’s finding insurers that have been there, tried, tested, and true, who understand the risks in the industry."
A significant focus for live event insurance revolves around logistics and the unpredictability of touring schedules. Schleifer emphasized the need for meticulous planning: "How can you deal with a touring company who might have quite an extensive schedule? Build in some time for delays, for logistical issues, for people who might become sick."
This evolving landscape has also affected insurance solutions for cancellations. Schleifer highlighted the importance of these discussions with clients, particularly for key figures in the production who may fall ill or be unable to attend.
“How can insurance be used to cover those costs?" he said, adding that it is crucial to mitigate losses related to ticket sales and refunds in such situations. Non-appearance insurance, for instance, is gaining prominence as organizers look for ways to safeguard their financial interests against unforeseen interruptions.
The environmental impact is another rising concern, as Schleifer explained with reference to recent events in Canada. Wildfires, a growing threat to live performances, are proving difficult to insure against.
"Trying [to get] insurance for event cancelation caused by wildfires is very difficult," he said, pointing out that smoke from fires, even far from a venue, can disrupt events. Coverage exists, but it comes with high premiums and close scrutiny by insurers. And the increasing prevalence of extreme weather events only adds to the challenge of securing reliable coverage.
In addition to environmental challenges, the sector must also contend with the digital shift. As streaming and digital platforms become more dominant, the nature of risk in the entertainment industry is changing. Schleifer noted the rise of artificial intelligence (AI) as both a tool and a concern for content creators.
"AI is going to make things a lot easier in some ways, but it presents a bit of an issue for content creators as to the ownership of that content," he said, raising concerns about the legal complexities surrounding AI-generated material. With AI blurring the lines of content ownership, insurance must adapt to address intellectual property issues, particularly when AI is integrated into digital media productions.
Looking at the broader industry shifts, Schleifer reflected on how COVID-19 has redefined risk profiles. The pandemic brought massive disruptions, and insurance coverage for cancellations due to communicable diseases remains a challenge.
"Getting coverage for cancelling due to a communicable disease or COVID-19 is not currently available," he said. However, certain film and television productions in specific countries can still find limited coverage for key individuals. These constraints highlight the ongoing challenges in the insurance industry to keep pace with new risks.
Schleifer also underscored the importance of customized insurance solutions for different sectors within entertainment, such as theater and opera companies. These tailored products account for unique risks, from property damage to business interruption.
“We started it off looking at the base exposures," he said, detailing how the policies cover specialized equipment like props, sets, and wardrobes. Ensuring that producers can recover from canceled performances and lost expenses has become an integral part of their coverage, especially given the difficulties in obtaining such insurance after the pandemic.
Cybersecurity is another rising issue, particularly with the growing digitalization of live events and ticket sales. Schleifer was particularly concerned with cybercrime, which poses a significant risk to clients handling sensitive data.
"There are exposures there with emails, confidential information, fraudulent transfer of funds," he said, noting that these risks extend beyond the typical concerns of the live performance industry. Cyber and crime policies are increasingly relevant, especially for clients with innovative digital platforms or extensive online engagement.
Ultimately, Schleifer’s approach is to ensure that clients are prepared for a wide range of scenarios. Insurance can’t cover everything, but by fostering open discussions about risk and worst-case scenarios, Front Row Insurance Brokers can help clients think beyond traditional insurance.
“Clients need to kind of imagine a worst-case scenario,” he said. “’What would I do in the absence of insurance?’"
