An Advisors' Guide to Excess & Surplus Disability Insurance

How to Protect Live Performers When the Show Must Stop

Posted Wed, Oct, 12th, 2022
By Exceptional Risk Advisors

A musician or entertainer's ability to take the stage and perform for their fans is essential to earning an income.  According to Billboard's annual Money Makers report, musicians make the bulk of their income from touring and live performances.  For example, in 2017, 95% of U2's total earnings came from touring, Garth Brooks' earnings to touring was 89%, and Metallica ranked in 71% of earnings from touring.

When artists take to the road there is a lot at stake and a lot of money on the table, which can disappear quickly if the music stops and there is no specialized insurance in place.  High limit Contingency Coverage mitigates losses when unavoidable events occur.  Take for example the recent news story of Bret Michaels, the frontman of the rock band Poison, who was hospitalized for an unforeseen medical complication resulting in the canceling of his Nashville show

Contingency Insurance covers non-appearance/event cancellation and is designed to protect the policy owner if a show or series of shows is missed, postponed, abandoned or rescheduled.  Thanks to the power of Lloyd's of London, this type of insurance is available with extraordinary benefit limits to U.S. promoters through certified Lloyd's of London Coverholders.  

The insurance is typically underwritten on a broad policy form that covers perils from death, injury or illness of one or more scheduled artists, as well as venue destruction, adverse weather, unavoidable travel delay, and communicable disease.

We recently worked on a case of a popular singer and guitarist about to embark on a nationwide tour.  The client was concerned with the loss of the guaranteed income associated with each venue if some or all the convert events could not take place.  The potential income from the tour's guarantees plus percentages advanced by the promoters exceeded $10 million.  If the event was canceled due to adverse weather, an act of terror, a death in the performer's immediate family, or a death, illness, or injury to the artist, the client and his estate would suffer considerably. 

Download the U.S. Concert Tour Case Study

Concerts, sporting events, plays, trade shows, exhibitions, tours, and art expos all generate large amounts of revenue and require a high capital input.  The substantial profits that can be made by holding such events can be jeopardized by these unavoidable circumstance, but there are solutions available to mitigate these risks.