Picture the scene: You've been waiting to buy tickets to see your favorite band, you finally get hold of some - you're so excited to see them and then they suddenly pull out. What happens next? Usually, fans are left devastated, show organizers have nightmares and an emergency call is put in to the insurers.
So, who picks up the bill in this situation? Well, there is a good chance it's us -- Robertson Taylor is in the business of live entertainment insurance and has brokered nine of the 10 highest-grossing music tours ever. The cancellation of a tour or a band's appearance at a festival is always set to hit the headlines, and it will normally result in a call to us.
When a band pulls out
When this happens, you need to consider the type of event; for example, if it's a festival, a band's cancellation can have little or no impact because tickets can be sold out within minutes of going on the sale, with no band or artist line-up being mentioned -- a cancellation won't stop the event from happening, but partial refunds may have to be considered. Also the band may lose its guarantee. A concert, however, is different. More stakeholders are affected, like the promoter, the agent and the venue.
Touring is where things get tricky. Decisions rely heavily on the accuracy of the financial forecast generated for the tour, and the size of the claim depends on the size of the event and the artist involved. The largest one-off show we arranged cover for was insured for $22 million, which is still the largest non-appearance policy placed for one show.
On a large production where there is a substantial set construction, and a large amount of crew, the costs can be huge, even just to reschedule. We've had an artist who had to cancel and reschedule several shows, and the claim was tens of millions of dollars because it required the rehiring of venues, crew, equipment and so on.
How much is it to insure a band?
It's all about risk. If insurers think a particular artist is high-risk, then this will be reflected in the cost to insure that artist -- as with any type of insurance. To gauge risk, we look at a number of factors, including the history of touring and any previous losses, health issues, logistical issues such as the tour routing, what happens if key individuals or equipment is not available, etc. Sometimes, insurance might not be available for an artist who has too much of a "history."
This can happen at any time of day or night; I remember a number of times I have been on the phone in the early hours of the morning because there was an urgent incident on the other side of the world. It's important to get on top of the situation quickly, understand what the issue is and then decide what needs to be done to mitigate the situation. If it looks like there could be a big loss involved, then we may need to reach out to the loss adjuster, but they don't always appreciate getting a call at 3 a.m.!
Throughout the process, it's important to continually communicate with the client. We operate in an immediate business where your expertise is required at that particular moment in time. Although we have been in this industry for 38 years, and undoubtedly the music scene has changed, insuring it still has the same unmistakable ability to keep you on your toes.