Thursday, February 3
Round Table - "Fear Factor: Concert Insurance in the 21st Century"
James Chippendale, CSI Entertainment Insurance

A highly successful new event implemented at the 2005 Concert Industry Consortium was a group of round tables, covering a wide range of topics and facilitated by some of the most highly respected people in their fields. Running the gamut of industry concerns from how to structure a deal to purchasing tour insurance to staying sober on the road, conference guests could stop at one discussion or visit them all for a taste of what’s happening in today’s concert business.

Event insurance is definitely a topic that fits a round table discussion format. As James Chippendale, CSI’s president, told Pollstar, there are just too many intangibles, so a Q&A session can address the specific concerns of the attendees better than a panel.

“Everybody there seemed well informed and curious about learning,” Chippendale said.

Many of the panels and discussions in which he’s been involved had more general questions. This time, he got a lot of specific questions from industry professionals like Frank Pallett and Michael Miller from Poughkeepsie, N.Y.’s Chance Entertainment Complex, who do shows outside their venue as well as on the premises.

“They had a ton of good questions: ‘Can we get one policy that covers the club and the outside shows that we do? What’s the best way to set up our insurance and the corporations that we have?’ We ended up insuring one of their shows a few weeks later.”

After the shooting death of heavy metal icon “Dimebag” Darrell Abbott, the West Warwick, R.I., nightclub fire, Chicago’s E2 nightclub tragedy and other incidents, there has been a greater focus on being properly insured.

“Three, four years ago, people said, ‘Hey, I just need to get done with this thing. Give me the cheapest possible (coverage) and let me get down the road,’” Chippendale said.

Now there are new, stricter underwriting guidelines that sometimes require metal detectors or beefed-up security at events. Very few carriers still cover hip-hop and rap events. Liability insurance, in general, has become so expensive that it’s cost prohibitive to get a $5 million policy on a 1,500-capacity show.

“Before you sign a contract with an artist, look at what they’re requiring of you from an insurance standpoint,” Chippendale said. “Ask them: If $10 million [coverage is cost prohibitive], can you do $2 million? I couldn’t stress to them enough the preparation well in advance; getting a seasoned insurance broker is a must.”

There were several questions that were answered in detail.

For instance, why is hip-hop so expensive to cover? Short answer: Rap promotes an image of danger, and insurance folks would rather back off.

Should someone buy event cancellation insurance?

“If it’s not going to tank your business ... then you may not want to do the event cancellation,” Chippendale said.

Should someone insure for profit or expenses?

“Most of the time, I say for just your expenses. Break even, and live to fight another day.”