As a musician, practicing and scheduling performances can be time consuming – and business decisions such as purchasing liability insurance can sometimes fall off the radar. Whether you’re an amateur band playing at a few events for fun or a professional musician growing your career, insurance coverage requires careful consideration and should never be a last-minute decision. Choosing a reliable insurance provider, deciding on the amount of coverage you’ll need and completing the insurance applications are all steps in a process that will ultimately protect you should an incident occur.
Q: Why should I buy insurance?
A: Defending yourself against and paying for a liability claim is expensive and purchasing liability coverage is the best way to protect your band from expensive claims and legal defense costs. For example, if a venue claims you damaged their floor loading in, your liability coverage will cover claims within the limits of the policy. Liability insurance not only pays damages for which you are held legally liable, it also covers the cost of investigation and defense of claims (even if they are groundless), which can quickly add up to thousands of dollars in legal fees.
Additionally, some events or facilities may require artists to purchase liability coverage that adds the venue as an “additional insured.” An additional insured is an entity (the facility or event), which has an insurable interest for claims arising out of your negligence as the named insured. By providing the venue additional insured status, they are now sharing your coverage and are entitled to defense and indemnity (up to the policy limits) under your policy. This is very common request and, unfortunately, can sometimes be a source of added costs from insurance organizations who charge an extra fee for certificates of insurance – sometimes as much as $25-$50 for each certificate you request. This is an important financial consideration when choosing your insurance provider, especially for musicians participating in a number of shows.
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Q: What kind of insurance should I buy?
A: Commercial general liability insurance. Often referred to as simply liability coverage, it protects the insured against liability lawsuits or claims, from a third party, for bodily injury and property damage arising out of the performer’s premises and operations.
Q: How much should I buy?
A: The policy “limit” is the dollar amount of protection you purchase to cover future claims. For example, you may choose to buy a policy that offers a $2 million occurrence limit with a $5 million aggregate limit. This means that your limit for an individual incident is $2 million with a total limit of $5 million for all incidents occurring while the policy is in effect. Some venues mandate minimum limits for performers, so before purchasing coverage be sure to check with the venue for any specific limits or coverage requirements. If there is a performance contract or agreement, it will often contain any insurance requirements. This is an especially important item to note on your contract when booking festival or special event appearances.
Q: How long does the coverage last?
A: The “term” or length that an insurance policy is in effect can vary so that you may select a policy term that is right for your needs. For example, you may have decided to perform at a local music festival. In this case, the most cost-effective choice would be to purchase a single-event policy designed to provide insurance for the duration of just one event. On the other hand, perhaps you are planning to perform at several different locations over the course of a season. In this case, you may want to look for an annual policy that covers all performances on a yearly basis.
Q: What should I look for when I buy insurance?
A: When choosing an insurance provider, always ask about the financial stability of the carrier; a high rating (A or better) by an independent rating company such as A.M. Best Company is the safest choice. Also, choosing a carrier that is “admitted” (licensed) is preferable because choosing an insurance company that is non-admitted (called surplus lines) may require you to pay extra fees or taxes.
Of course, experience is also a factor. Organizations familiar with the unique risks associated with the entertainment industry will be able to accurately price coverage and more importantly, provide prompt and reliable claims handling and resolution services. You may also want to look for convenient services such as the ability to apply and purchase coverage online, as opposed to completing a paper application that must be mailed and approved before coverage is in force.
While it may not be the most exciting step you take in preparing for your show, purchasing insurance will ultimately give you peace of mind while performing in public. Choose the right liability coverage for your music business and you’ll be able to focus on a successful music performance, knowing that you’ve got the coverage you need.
ABOUT THE AUTHOR
Lorena Hatfield is Marketing Resources Manager for K&K Insurance, a leading provider of sports and entertainment insurance since 1952. For more information on entertainer coverage, visit www.entertainerinsurance-kk.com.