Chapter 12: Insurance, Licenses, and Permits

What type of details are included on a Certificate of Insurance?

(1) The type of insurance purchased, (2) the level of coverage, and (3) the amount of the premium.

General Liability Insurance (AKA Spectator Liability Insurance):

Coverage for losses that come as a result of personal injury or property damage from a concert.

How does an insurance broker differ from an insurance carrier?

A broker is a person; a carrier is a company.

Artist Non-Appearance Option:

An addendum to the insurance policy that provides reimbursement to the promoter in the event that the act does not appear.

Insurance Broker:

An insurance professional who specializes in entertainment insurance.

One type of insurance that brokers usually advise promoters to purchase:

Artist Non-Appearance.

One type of insurance that brokers usually advise promoters to purchase:

Event Cancellation.

Sunk Costs:

Expenditures that are not retrievable.

Out-Of-Pocket Expenses:

Money already spent by the promoter.

Payouts (AKA Settlements):

Money paid to compensate for deaths of concert attendees.

Is Pyro Insurance difficult to obtain?

No, but pyro is typically not used in club shows because of restrictive local ordinances in many cities.

What organization represents major concert promoters regarding PRO licenses?

North American Concert Promoters Association (NACPA).

PRO is the acronym for:

Performing Rights Organization.

One type of insurance that brokers usually advise promoters to purchase:

Pyrotechnics.

The General Liability Insurance may offer the promoter financial protection in the event:

That a member of the audience, the act, the touring crew, the venue staff, or the local stage crew is injured.

Named Insured:

The promoter.

The multipliers for Heavy Metal, Rap, and Hip-Hop may all be greater than or equal to _____ per attendee.

$1.

What variables influence the cost of an insurance policy for a concert?

(1) History of insurance claims for the genre of music being performed, (2) the act or acts, (3) the venue, (4) the number of attendees, and (5) the location of the show.

The multiplier for Classical music may be up to _____ per attendee.

15 cents.

Certificate of Insurance:

Shows the act that is being secured for a concert and the venue where the concert is to be held that the buyer has purchased the appropriate insurance.

SESAC was formerly the acronym for _____, but now is now simply referred to as "SESAC."

Society of European Stage Authors and Composers.

Insurance Premium:

The amount of money the concert promoter pays for the policy.

What is meant by "placing the coverage" with an insurance carrier?

The broker chooses an insurance carrier that offers the best protection for the situation.

Insurance Carrier:

The company that issues the insurance policy and assumes the risk.

Multiplier (AKA Per Capita or Per Head):

The cost of insurance per attendee.

Does a promoter of a free admission concert need a performing rights license?

Yes.

Can the promoter of an outdoor festival obtain insurance that compensates the festival in the event of weather conditions that affect attendance?

Yes; Weather Insurance.

The multiplier for Rock music can be up to _____ per attendee.

50 cents.

Event Cancellation Insurance:

A policy that reimburses the promoter for the net loss caused by the event being cancelled, postponed, or rescheduled.

BMI is the acronym for:

Broadcast Music, Inc.

True or False: BMI's annual fee is more expensive for promoters who present many concerts each year than the fee for those who present only one show per year.

False. The fee is the same regardless of the number of shows.

Is a promoter's failure to procure a PRO license a violation of local, state, or federal law?

Federal.

What are some conditions that might cause a promoter to cancel a concert?

Floods, hurricanes, and other catastrophic weather conditions that prevent the majority of the audience from traveling to the venue; Delays in transportation; Delays in delivery of equipment essential for the show; and some national disasters.

One type of insurance that brokers usually advise promoters to purchase:

General Liability.

Additional Insured:

Individuals and businesses that are not affiliated with the concert promoter but are protected under the insurance policy.

Escape Clause:

A statement that permits the act to cancel the show when one of the conditions listed in the performance agreement occurs.

Name the three largest organizations in the United States that issue performing rights licenses.

ASCAP, BMI, and SESAC.

Performing Rights Licenses:

Agreements that permit the act to perform copyrighted music during the show.

ASCAP is the acronym for:

American Society of Composers, Authors, and Publishers.

Uninsurable Risk:

An act that the carrier considers too risky to insure.

How does an insurance broker differ from an insurance agent?

An agent represents one carrier; a broker has several carriers from which to choose and the broker may "shop" for the most appropriate carrier.

Why does an insurance broker review the performance agreement and venue rental agreement before recommending an insurance package to a client?

To advise the promoter about different insurance options.

Why does the venue require the promoter to name the venue as an "Additional Insured" party?

To protect the venue from any damage that could occur from a concert.

One type of insurance that brokers usually advise promoters to purchase:

Weather.

Who is generally responsible for securing liability insurance for a concert?

The promoter, but the venue and tour are wise to make sure they are covered as well.

Who is typically required to produce a certificate of insurance and present it to the venue?

The promoter.

Why might an act be considered an uninsurable risk?

Their genre of music encourages dangerous audience behavior, including moshing and stage diving.