In 2020, the special events market was decimated as the entire entertainment industry shut down due to COVID-19 and insurable events disappeared. Two years later, the market continues to struggle to grasp the new reality, despite pent-up demand for live events.

“Rates are up, limits are being held back, and carriers who may be willing to offer primary limits are not as willing to offer excess limits for some events as they may have been in the past," says Scott Carroll, senior vice president and program director of Take1 Insurance. “It is becoming tougher and tougher to find multiple markets willing to participate on certain events."

And while events are expected to continue to be scheduled through 2022, the continuing ramifications from the pandemic, such as those that caused the recent cancellation of Adele's Las Vegas residency, may continue to haunt the industry. The singer confirmed just days before the opening night of her “Weekends with Adele" concert series at the Caesars Palace Hotel, Las Vegas, that coronavirus infections among her crew and delivery delays made it “impossible to finish the show." 

Yet, while COVID-19 risks for artists, casts and crews still threaten the viability of some events, 2022 could yet be a banner year for live events if these risks can be managed effectively. Industry players, including promoters, carriers and independent agents, are continuing to use their ingenuity to find ways to manage the ever-changing risks posed by evolving COVID-19 variants.

Virtual events continue to offer a solution to providing events with less risk involved, as does the advent of parking lot and drive-thru events. But while virtual events will continue to offer a viable option to meet the demand for live events in 2022, other options may be short-lived.

“Drive-thru events are seen as a short-term solution to the problem of holding live events," says Marcus Paxton, underwriter and broker, Take1 Insurance. “Carriers writing in this space are not fond of this type of event as it adds an additional element of liability concerning the movement of autos within the event, for which the insured may be responsible." Nevertheless, agents can find coverage for their clients, even if it does cost more.

Today, “promoters of live events are, for the most part, paying attention to public sentiment recognizing that patrons, by and large, are seeking to know what the event is doing about their health and safety when it comes to COVID-19, and therefore, are addressing these issues head on," Carroll says. “The insurers are asking questions if the submissions do not address these health and safety issues or are not addressing the public-facing comments from promoters."

“Most carriers have solidified their pre-existing communicable disease exclusions with an emphasis on the current COVID-19 outbreak," Paxton says. “The withdrawal of markets from this space has partially revolved around their inability to quickly file enhanced communicable disease exclusions across multiple states."

In addition, the market has been faced with events such as the tragedy at the Astroworld Festival in November 2021, where a crowd surge during rapper Travis Scott's performance left 10 concertgoers dead and more than 300 injured. These events “certainly had an impact, as insurers are reevaluating the types of events that they are willing to cover," says Robert Holmes, president, Spectrum Weather and Specialty Insurance. “Insurers are requesting to see copies of the event's emergency management plan, event's site layout, and other documents associated with the safety of those attending such events."

But while tragedies such as Astroworld will continue to impact industry pricing and capacity, carriers and agents “can assist their insureds by discussing their plans early with their insureds, thereby allowing ample time to develop a robust game plan to present to the insurer when event cancellation insurance is needed," Holmes says.

“As entertainment costs continue their meteoric rise, insureds are finding that the placement of event cancellation coverage is a valued risk management strategy," Holmes continues. “I would anticipate this trend to continue over the next several years."

Strong risk management strategies will be essential to keeping rates for live events manageable. Agents and carriers are looking to ensure strong COVID-19 policies are in place, special event workers are appropriately trained, and any cyber risks are adequately dealt with.

Nevertheless, “going forward, I expect a continued hardening in the market, although not as near to the extent seen in the last two years, with pricing leveling off by 2023," Holmes says.

Olivia Overman is IA content editor.