Headed to a music festival this summer? It’s the insurance for these events, rather than the music, that is drawing the headlines.
From Bloomberg, via Claims Journal:
“Big events, those the caliber of Coachella and Bonnaroo, typically take on at least five kinds of insurance policies: cancellation, including terrorism coverage, general liability, umbrella policies, workers’ compensation, and business auto coverage.”
FiveThirtyEight asks: what’s the typical cost of cancellation insurance for a music festival? Bloomberg has the answer:
“Cancellation insurance will typically cost 1 percent to 1.5 percent of the overall cost of an event, as much as $150,000 for a $10 million festival.”
Unpredictable weather, the threat of terrorism, and the demographics of festival attendees, are some of the factors that make music festivals one of the hardest risks to insure.
From the Argo Global blog, a post by David Boyle, contingency class underwriter, offers this perspective on why: Without intervention, festivals are likely to disappear from insurers’ books:
“Festivals, which sometimes include dozens of acts, can’t often be rescheduled in the event of inclement weather unlike concerts or other live performances.”
“Threats to festivals are not isolated to the increasingly unpredictable weather. Terrorism is now a very real threat to high profile events which often lack the security procedures of more permanent crowded places.”
“In our view, if the festival insurance market is to return to profitability, then intervention will have to come in the form of significantly increased pricing and, particularly for smaller events, improved risk mitigation processes.”
The Insurance Information Institute (I.I.I.) gets questions all the time. Here is one that was sent to our California representative:
Q: Do you have recent statistics about the percentage of people without a home inventory?
A: The I.I.I. regularly surveys people on this topic. In November 2016, 50 percent of the homeowners we polled said that they had a home inventory, down from 52 percent in 2015. Only 37 percent of Millennial homeowners reported having an inventory compared to 50 percent of Gen Xers and 51 percent of Baby Boomers. A home inventory can be used to help make coverage decisions and can simplify filing an insurance claim, so it’s important to make one and keep it updated.
Advice on how to create a home inventory can be found on the I.I.I. website
More than $14 billion. That’s the expected insured loss from severe convective storms, thunderstorms, tornadoes, large hail and associated damaging winds in the United States in the first six months of this year.
From the Artemis blog, via Impact Forecasting, the catastrophe risk modeling center at Aon Benfield:
“The insurance and reinsurance industry faces more than $14 billion of losses after the first-half severe storm activity in the U.S., while the economic loss is set for $22 billion or higher, putting 2017 as the fourth most costly year for both economic and insured losses due to convective weather activity.”
Check out the U.S. tornado count, 2017 from NOAA:
An important message on building resilience from Munich Re, as reported by Business Insurance:
“Munich Reinsurance America Inc. has released a tornado virtual reality experience tool to highlight the risks posed by tornadoes and the importance of embracing resiliency in building construction to help reduce future property losses.”
“Many building codes in the United States do not require a home to withstand more than a 90-mph gust of wind for three seconds, which is the equivalent of a weak EF1 tornado with wind speeds between 86 to 110 miles per hour.“
Get Insurance Information Institute facts and statistics on tornadoes and thunderstorms here.
Get serious about the lightning threat from the Insuring Florida blog.