Part two of our discussion on business opportunities for brokers in the vibrant film and events industry with Denise Hattingh, Managing Director and Iola Edmayer, Executive Director at KEU. In part one the focus was on Film and Television, and we will now be looking at Events Liability.
Tony: This discussion is especially interesting for me because we are now starting to attend lots of live events again as the industry is starting to open. Denise, can you give us your thoughts, on opportunities for yourself and brokers as the industry starts to recover?
Denise: We have seen an absolute explosion on the event scene, and it is anything from kiddies’ entertainment right through to big concerts being produced again in South Africa, which is marvellous to see. Now, very often, brokers of the insured forget about the insurance aspects that tag along, especially the newer entrants into the events market, who do not always understand the importance of events liability. And it is not only important but by law, it is promulgated that you must insure your event for event liability as a minimum. Your JOC certificate will not be approved without an events liability policy and proof of insurance.
It does not matter whether you have a big performance at one of the big stadiums, or you have artists performing on the stage with kiddie entertainment at one of the parks, for instance. All of that must be insured where there is a gathering of people. And not to forget about the business struggle, the conferences being hosted daily in South Africa at the big conference centres, but also in the smaller venues, all those events must be insured for liability cover.
We have seen an increase in liability claims, people are more informed when it comes to claiming. We then should also not underestimate event cancellation. We had a massive storm in Johannesburg yesterday afternoon, and that would influence your event. Your open-air events are going to be influenced by weather and the potential cancellation thereof is going to have a big financial impact. Insureds and brokers need to understand how they can manage weather, non-appearance and so forth.
Tony: How have the risks facing this segment changed over the past couple of years? Has there been an impact on how people view the risks and how they look at providing insurance for that?
Iola: It is a combination of changes that took place. COVID taught us many new lessons. In some of the events, for example, they are taking a lot better care in terms of who is coming in, who is going out, the hygiene aspects and the safety aspects thereof.
Then on the other side, we have a two-fold, where they were so desperate to come back into the event industry that it is one event after the other without taking due care. It is a combination between the causes and effects of what COVID had on the industry.
As Denise said earlier, there is an increase in the number of events and each person is trying to create big entertainment to get more people to participate in their events because there are so many events now. As a result, we have seen an increase in risk and claims. People are taking chances, in terms of the claims, where they would bump their toe and feel done in while it is not always the organizer’s fault.
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Tony: Where do the opportunities lie for brokers in this space? How do they increase their market share in the events industry? For instance, how do they go about doing that and what role do they play, in terms of the relationships?
Denise: There is a handful of very well-established events brokers out there. It is such a busy, vast market now, and very often what we find is that the insured comes to us very belatedly with a broker saying, I did not know that I had to do this, or I did not know that I could get insurance for the non-appearance or the liability or weather cover.
It is important for brokers, even with your current client base, to ensure that people understand that there is a massive exposure there. You could have a big corporate being a main sponsor on a big conference, do they understand that they could be held liable because they are sponsoring an event?
What I am urging brokers to do is to understand what events are about. Very often your stock standard client has the exposure of an event. They could be hosting small events, or they could host a product event. They could be part of an exhibition where they need events liability cover as well.
So, this cover is much wider than just event organizers. It is very often the corporate clients that will require the cover. Brokers need to understand what the product has to offer, what is needed by their own insureds and how we can then provide the solutions for them.
Iola: When you have a look at the events, everything involved in that event, who is setting up the chairs, the marquis. Those Marquis can be insured on an annual basis whilst in storage, transport, and being hired out. The actual equipment that they use, the camera, the stage, sound equipment, all that equipment can be insured under an annual policy. If you look at some of the additional entertainment that they provide, especially when having a look at where children are involved, like jumping castles, those subcontractors always need to have their own insurance. Are the jumping castles themselves insured, the petting zoos, the mechanical rides etc?
Tony: So, the opportunity then goes right where the broker is insuring an event. You might pick up other clients that are suppliers to that event. So, it is not just a once off, they can specialize in this sort of thing.
Denise: Correct, all the subcontractors involved in an event need to be insured, specifically for that exposure. We have not even started touching on the sporting events and participants. We have a massive influx of mountain biking, road running, off-road running, and mountain biking type of events.
That market is incredibly large, with trends like wine estates becoming involved. They would open their venues to some of these mountain bikers or some of these runners. You have a specific liability as a result thereof. You have the medical fraternity, the sweepers, and, especially when they do these events over a couple of days, you have specific companies coming in, setting up the teams, breaking it up whilst the guys are running or cycling, and then going to the next point to start again.
So, you have all that infrastructure around events, not only what happens in the city and the bigger centres, but also what happens out in the open in nature.
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