Planning an outdoor music festival or concert? An important item on your checklist, right after security and safety, should be insurance needs. Outdoor music festivals present additional concerns over indoor music concert venues. For one, they are directly exposed to weather events. They also may mean the set up of temporary structures such as stages, flying array speaker systems, bleachers, tents, and other items that are set up specifically for that outdoor occasion. Temporary structures can be more problematic than permanent structures when it comes to potential mishaps.
Any entertainment agency planning and producing such events for another party inform them of the right insurance policies needed. After all, the bigger and more complex the festival, the greater the possibilities that something could go wrong. Good planning can minimize risks, but they are always there with any musical festival or show.
They don’t need to be as tragic as the Astroworld Festival in Houston with the deaths of so many people to be financially ruinous to those involved with holding or producing a music festival. Other less ominous events outside of your control include:
- A guest could hurt themselves during a fall.
- An expensive piece of equipment could be dropped
- A worker gets injured while setting up the stage
- Someone tripping on a wire
- Wind blows over a tent full of people or a bounce house with kids in it
- Rain keeps 80 percent of your expected crowd away.
- An entertainer falls off the stage
- Loss of power that forces the cancellation of the show.
- An accident while providing local transportation for artists
That’s why insurance is part of the equation for holding outdoor music festivals. Whether it’s property damage, injuries, medical emergencies, concert cancellation, weather problems or other unforeseen events, having the right event insurance in place for your outdoor festival or concert is very important.
Buying event insurance is confusing and often overwhelming because there are many different types to consider. Hopefully, you will never use it, but it only takes one incident to make you wish you had it.
The Many Types of Event Insurance for An Outdoor Music Festival or Concert
Most people think about weather or rain insurance when holding outdoor events. They neither understand how weather insurance works or the many other event insurance policies available for music concerts or festivals.
The following two-part article is an overview of the various policies available for outdoor or indoor live musical events. Those holding events should understand them and decide what is relevant and affordable for their event. These include the following:
- Weather Insurance
- General Liability Insurance
- Liquor Liability Insurance
- Cancellation Insurance
- Third-Party Damage Insurance
- Hired/Non-Owned Auto Liability Insurance
- Worker’s Compensation Insurance/Employers’ Liability
- Terrorism Insurance
- Volunteer Accident Insurance
- Inland Marine Insurance
- Special Event Insurance
- Professional Indemnity Insurance
- Cyber Attack Special Insurance for online presences
Now do you see why insurance for your outdoor music festival can be traumatic to the uneducated.
Let’s begin with the first insurance many event organizers think about for their outdoor music concert or festival, i.e., weather insurance. It’s not the most important but is top of mind for most.
Weather Insurance for Outdoor Festivals or Concerts
Weather insurance has been around for more than 100 years. Farmers use it for weather-based crop insurance. It can be purchased for both long- and short-term events. To most of TSE’s clients, weather insurance means rain insurance. Weather insurance can in reality be a lot more. Policies can provide protection for conditions involving wind, snow, rain, lightning, fog, and unpleasant temperatures.
Weather insurance is used to protect outdoor concerts and festivals from losses or damages caused by measurable adverse weather. It protects the event organizer from loss of revenue that would have been made through ticket sales, concessions, parking, merchandise sales, food sales, etc. For free live entertainment events, weather insurance also can protect the organizer from financial loss.
For example, with a rain insurance policy, festival organizers can be assured that if measurable rainfall affects attendance and income drops their losses would be covered. For free events the policy premium covers expenses for an outdoor concert or festival negatively affected by rain.
Weather insurance is not the exclusive province of outdoor entertainment events. Bad weather can affect attendance at indoor venues as well. People are less likely to navigate bad weather conditions to attend and indoor concert as well.
How Does Weather Insurance Work?
The amount of coverage a festival or concert organizer should buy is some percentage of their expected revenues or expenses up to 100 percent. Because the policy is based on an agreed upon amount of coverage between the purchaser and underwriter, you don’t need to demonstrate the amount of loss in your claim to your insurance company. Whatever the dollar amount of the policy is the amount you will receive if the agreed upon adverse weather event happened during the agreed policy hours.
The event organizer selects the coverage options they want for their policy. In the case of rainfall insurance, the two factors that make up the policy conditions are the amount of rainfall as measured by a third party and the time period in which it falls. There are several options for organizers in selecting their policy. They can select:
- Cumulative Rainfall Coverage. With this coverage, the policy provides for a claim if a specific amount of rain falls over a specific time period.
- Rain Free or Dry Hours. The policy provides for a claim if rain falls over a specific number of hours during a designated time period.
- Stepped Insurance Coverage: Unlike the cumulative rainfall totals of most policies, stepped rainfall insurance allows festival or concert organizers to select up to three rainfall amount option with different insured amounts. This type of policy allows the policy payout to increase with growing rainfall amounts. In this way the policy holder can see a greater claim with greater rainfall. Here’s an example of how that might work.
Threshold Rainfall Amount Sum insured
Threshold #1 0.10 inch $5,000
Threshold #2 0.25 inch $15,000
Threshold #3 0.50 inch $30,000
- Dual-Period Insurance Coverage. This type of policy allows the festival organizer to choose two different time periods, each with its own rainfall threshold coverage. It’s like having two policies covering different time periods leading up to or during the event.
Other weather conditions such as snow, fog, temperature extremes, etc. can be covered by weather insurance. Conventional weather insurance usually covers low probability events such as tornadoes or hurricanes. Different weather conditions can be combined into one policy if desired.
Cost of Weather Insurance for Fairs, Festivals, Concerts and Other Live Entertainment Events
The way the premium cost is determined is a function of the statistical probability that an adverse weather event will occur at the event’s location on the specific date and time of the covered event. Underwriters look at past historical weather data and the policy amount in determining the premium for such a policy.
Concert and festival organizers select their definition of adverse weather for their event when selecting their policy. The adverse weather event must be validated by a third party which can be the closest National Weather Station, an onsite independent weather observer or by a weather service such as Accuweather.
Rainfall Classifications Used in Selecting Rain Insurance
- 1/100 Inch of Rain – 0.01″
Rainfall amounts include a light shower for 2-5 minutes or a drizzle for 2 hours leaving no puddles on the ground and a slightly wet the surface.
- 1/10 Inch of Rain – 0.10″
Rainfall amounts include a light rain for 30-40 minutes, moderate rain for 10 minutes or heavy rain for 5 minutes leaving small puddles that usually disappear after a short while.
- 1/4 Inch of Rain – 0.25″
Rainfall amounts include a light rain for 2-3 hours, moderate rain for 30-60 minutes or heavy rain for 15 minutes leaving many puddles on the ground that do not disappear easily.
- 1/2 Inch of Rain – 0.50″
Rainfall amounts include a moderate rain for 1-2 hours or heavy rain for 30-45 minutes leaving deep standing water for long periods of time.
- 3/4 Inch of Rain – 0.75″
Rainfall amounts include heavy rain for 2-4 hours leaving deep standing water for long periods of time.
- 1 Inch of Rain – 1.00″
Rainfall amounts include heavy rain for several hours (2-5 hours) leaving deep standing water for long periods of time.
Before a concert or festival organizer chooses an insurance company, they need to give some thought as to what kind of weather event would cause them a significant loss. Would it take a heavy rain shower or light rain to depress turnout to your event?
When the rainfall occurs is also very important on depressing revenue and turnout for an event. If you event begins at noon, would sustained light rain in the morning dampen (excuse the pun) turnout? Would afternoon rain discourage people from attending a nighttime event?
What if it starts raining right before the event as opposed to the last 30 minutes of the festival or concert? These are the choices you must make in determining the amount of rainfall and the time period for your weather insurance policy.
Your premium will be determined by these factors and the policy amount. The less rainfall amount you select, the greater the premium will be. The longer the time period you select the more you will pay as well. It’s a compromise to get the most affordable rain insurance for the adverse weather event that will significantly affect an organizer’s bottom line.
Before you make these policy decisions, we recommend that you do your own research regarding historical weather data for your location and date. Here is an example of the data TSE Entertainment collects for outside festivals and concerts we produce.
Location X Weather for September 17th.
- Expect upper 80s to 90 as the high
- It should be low to mid 80s for opener and headliner
- About a 65% chance that it will be partly cloudy to clear that day.
- The chance of a wet day (at least 0.04 inches of rain) is about 22%
- An average monthly accumulation of rainfall with September 16 being the midpoint is 2.5 inches.
- Sunrise will be at approximately at 7:20 a.m. and Sunset will be approximately 7:10 p.m. CDT
- Humidity Comfort Level: Likelihood that it will be muggy is about 45 percent and the chance that it will be humid/muggy is about 70%.
- Windspeed is typically between 8.6 and 9 mph.
- Wind direction would be from the south or southeast for 55 percent of the time with an east wind possible 27% of the time. The remainder would be a north wind.
Weather insurance for a one-day outside festival or concert event in our experience is 6 percent to 10 percent of the amount of insurance required. Because of the variability of quotes based on the judgements of underwriters, we recommend that you get several quotes before deciding on the insurance company.
Getting A Weather Insurance Quote for Your Concert or Festival
First of all, don’t wait until the last minute to get weather insurance. Insurance companies will not provide weather insurance within two weeks of your event. The process is easy with most companies offering online quotes for policies.
You will need the following information to obtain a quote.
- Specific location of the venue for the event
- Type of event
- Amount of coverage desired
- Adverse weather condition definition sought (rainfall amount, wind speed, temperatures, etc.
- Period of time that the policy is in effect
While weather insurance is an important measure to avoid financial risk if the weather doesn’t cooperate for your event, it is only one type of event insurance policy available for events. In fact, it’s not the most important event insurance you should have for your fair, festival, concert, outdoor wedding reception, etc.
In Part Two of this article on types of event insurance for outdoor music festival or concert, I will discuss other types of event insurance available to organizers as listed in the introduction of this post. A liability policy is the biggest necessity and will provide outdoor event organizers even more peace of mind than having weather insurance. As you will see the right mix of event insurance is critically important in preventing potentially devastating consequences for any concert, fair, festival, or other type of entertainment event.