A Creative Solution
The entertainment industry is highly diversified, with a wide range of businesses. Each subsector of the industry faces unique risks. That’s why they require a unique solution—entertainment insurance. This insurance is quite flexible and can protect you from a multitude of risks.
In this article
What is Entertainment Insurance?
Entertainment insurance is a collection of personalized insurance for those involved in the entertainment sector. Entertainment insurance, popularly known as production or film insurance, protects you and your business from the inherent risks of the entertainment industry. This protection can be in the form of reimbursement of damages, compensation for employee injuries, financial backup during litigation, and so on.
Who Is It For?
- Entertainers and performers
- Film producers and directors
- Equipment rental businesses
- Entertainment venue operators
- Post-production agencies
- Videographers and photographers
- Event planners
Why Entertainment Insurance?
Select USA reports that the U.S. media and entertainment industry is worth $717 billion. By 2023, the figure will reach more than $825 billion. The growing value of business highlights the need to employ a proper risk management strategy. Entertainment insurance offers personalized coverage so that you can choose which risks you want to cover and only pay for those.
Entertainment insurance is the perfect way for you to take care of your business’s well-being. It lets you focus on growing your business by providing you the financial fallback following a loss event.
Entertainment insurance is the perfect way to take care of your business’s well-being. Focus on growing your business by getting your coverage.
What Are the Coverages?
Since entertainment insurance is a packaged policy, you can find the following coverages:
General liability insurance
General liability insurance protects you from losses arising from third-party claims. The claims can be due to bodily injury or property damage. For instance, during a shoot at a resort, your employee accidentally trips, falling over and damaging an expensive vase. In such a scenario, general liability insurance helps you pay for the loss caused to the resort owner.
The insurance also covers you from losses resulting from advertising damages such as copyright infringements, defamation, etc. Such lawsuits can be expensive to pay on your own. Most businesses require you to have this policy before renting out a facility, performing work for others, or permitting to shoot at a location.
Errors and omissions (E&O) insurance
E&O insurance is specifically designed to protect you from losses caused due to errors, negligence, or malpractice on your end. This coverage, under entertainment insurance, is often called media liability insurance. It protects you from third-party claims on the grounds of unauthorized use of names, musical compositions, plots, ideas, format, titles, etc.
The insurance also protects you from lawsuits arising from intentional torts such as defamation, slander, libel, and privacy invasion. As per your needs, you can either get short-term coverage specific to a single production or long-term coverage for a production series.
Workers compensation insurance
Workers compensation is mandatory (except in Texas) for businesses that employ workers. This insurance helps you compensate your workers in the event of death, disability, or injury due to the work environment. The insurance covers medical fees, funeral costs, lost wages for the injured workers, etc. In return, the workers give up the right to sue you when such events occur.
For instance, one of your employees is carrying a heavy speaker and trips on some wires that weren’t taped down properly. They fracture their wrist and can’t work for over a month. In such a scenario, they can sue you, making you liable to pay for medical bills as well as lost wages. However, workers compensation insurance helps you with such expenses.
Commercial auto insurance
Your company may own vehicles and use them for delivering equipment, transporting performers, etc. Anytime your company vehicles are on the road, they are at risk of an accident. That’s why purchasing commercial auto insurance coverage is essential. The coverages are for costs arising from:
- physical damage of the vehicle,
- bodily injury to third-party, and
- third-party property damage.
Commercial auto insurance is required by law in all 50 states except for New Hampshire and Virginia.
Commercial property insurance
Your business’s property and assets like furniture, fixtures, and equipment are prone to damages. However, with commercial property insurance, you can focus on building your business rather than worrying about any losses related to your business property. This insurance compensates you in case of damages to your commercial property due to events such as fire, theft, vandalism, windstorms, hail, etc.
Employment practices liability
Workplace malpractice suits such as wrongful termination, sexual harassment, discrimination, etc., can cost tens of thousands in legal fees. For instance, Sony Pictures Entertainment faced a class-action lawsuit by two former employees due to their failure to secure sensitive employee data. The company eventually settled for $8 million.
Such lawsuits bring immense financial pressure to your company. However, employment practices liability insurance covers your litigation charges. It pays not only your defense fees but also any settlement costs up to the policy limit. Hence, the inclusion of employment practices liability coverage in your entertainment insurance will be beneficial to you.
Cyber liability insurance
Cyber risks can be fatal to your business. You have the responsibility to safeguard sensitive client and employee information. Considering the US market’s high vulnerability to cyber-crimes, you should be ready for the unfortunate events of a data breach.
Cyber liability insurance is for losses due to ransom attacks, malware, phishing, etc. The insurance also covers data restoration costs, IT expert consultation costs following a cyber-attack, litigation costs, etc.
Entertainers and performers insurance
This insurance is for individual performers and entertainers. Entertainers and performers insurance offers liability protection to independent performers in the event of suits against them. Such performers can be dancers, comedians, actors, musicians, clowns, etc. Lawsuits against independent performers can be tremendously costly for an individual.
For example, the emo-band, Yellow Card, alleged that Juice WRLD’s “Lucid Dreams” was similar to theirs and sued them for $15 million. Entertainers and performers insurance effectively takes care of such costs. Additionally, if you are an independent cameraman or videographer, the insurance will protect you.
There are many other entertainment insurance coverages that you can look for, such as:
Cast insurance: Covers expenses due to the cancellation or interruption of filming caused by a cast member’s illness, disability, or death.
Videotape and film coverage: Damages to raw film, soundtracks, exposed film, etc., are covered.
Faulty stock, camera, and processing coverage: This coverage is for defective development, faulty processing, accidental erasure, etc.
Equipment floater: Specially designed to protect you from damage to equipment you transport from one place to another—for example, props, cameras, lights, sets, musical instruments, etc.
Limitations of Entertainment Insurance
- Aircraft coverage
- Underwater filming
- Stunts and pyrotechnics
- Coverage for animal
- Commercial drones
Generally, these coverages fall out of the scope of standard entertainment insurance. However, you can opt for separate add-ons such as commercial drone insurance, aircraft insurance, etc.
Cost of Insurance
The cost of insurance isn’t the same for all. It depends on the following factors:
- Nature of projects: Risky projects bring higher premiums.
- Industry experience: Industry experts are deemed to know about prevalent risks. Hence, the probability of risk is low, driving down the cost of insurance.
- Equipment value: Damage to high-value equipment can bring huge costs. Therefore, such equipment increases the premium.
- The number of employees: The higher the number of employees, the more chance there is for injuries, negligence, or lawsuits. Thus, the cost is greater.
- Claims history: A clean claims history indicates good risk management. Companies with lower claims have a lower premium than those with a higher number of claims.
- Coverage: The amount of coverage significantly affects your cost of insurance. To clarify, the higher the coverage, the greater the insurance cost, and vice-versa.
- Loss control: If your company uses loss control techniques, your insurer may provide you with a discount. For instance, installing fire extinguishers in your facility, using an advanced cybersecurity system, etc.
Is Entertainment Insurance Legally Mandated?
While not every coverage under entertainment insurance is mandatory, some are. For instance, you are required by law to have workers compensation coverage in place (except in Texas) if you are employing more than two people. Likewise, nearly all the states require you to carry a certain level of commercial auto coverage.
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