Lockdowns in the wake of COVID-19 spurred changes in how insurers view large public events.
The virus’ spread put the events insurance segment on ice for a couple of years. But 2023 saw an explosion of activity, notes Benjamin Rossington, entertainment and sports account manager at Hub International.
But along with a renewal of events activity came increases in coverage pricing.
Case-in-point, the three-fold hike to cover Toronto’s annual Pride Parade in 2023. Rossington notes event organizers Canada-wide who’d been used to cheaper premiums experienced sticker shock.
“After COVID, when [event organizers] reapplied, the capacity within the [events insurance] space had shrunk. There weren’t as many players offering insurance for large public events,” he says.
“And secondly, the insurers that did remain were way more involved in risk management of those events, and were assessing the risks appropriately.”
He says organizers of large events like music and street festivals now have “insurers looking at them holistically and saying, ‘Well, we’ve got this event on public property, thousands of people are attending. There’s no ticket. It’s a free event.’”
Those events also require major involvement with the host city, local police, the businesses lining the streets and private security companies operating on non-city owned properties. Insurers want to understand where all of those different parties intertwine.
“In the event safety space, they call it the ‘last mile’ or the ‘gray zone,’ where there is a handoff between people’s responsibilities,” Rossington says. “You’ve got a venue [where someone will be], but once they leave the venue and they walk to the train station, who’s responsible for that?
“That one kilometre walk between the two spaces…a lot of bad stuff can actually happen in that area.”
Counting crowds
One way insurers assess event risk is by estimating attendance. But free events pose a dilemma for insurers: How do they know how many people will show up?
Many outdoor events have multiple components happening in different places within an established geographic area. For example, Toronto’s frequent music and street festivals incorporate a mix of food and crafts vendors with concert stages set up in multiple locations.
“If you ask the organizers, ‘how many people do you expect to attend?’ they couldn’t give an exact number,” says Rossington.
That’s a different risk profile from an indoor event for which a promoter can tell you exactly how many tickets were sold.
“Outdoors, I have no idea how many people might show. If it rains on the day, I could get half of what I’m expecting. If it’s a beautiful day, I could get thousands.”
And more people means more risk.
“You’ve got crowd control, you’ve got slip and falls, you’ve got intoxicated people, you’ve got a mix of children and adults, you’ve got a whole host of risks that happen [at] public events,” he tells CU. “And the risks fall on the event organizer, regardless of their abilities to manage them.
“That’s what insurers are having to get their heads around for pricing. It is not easy.”
Other perils
In terms of standard perils for events coverage, venues continue to buy insurance for adverse weather that can lead to cancellations. Those coverages include unusually large amounts of rain, which has been a problem in many Canadian provinces this summer, along with lightning and windstorm.
“They’re more understanding of, ‘I don’t have a meteorologist, but I’m going to get one, because I need someone to help make a decision for me if I see a large storm coming,’” Rossington says.
“There’s more investment by organizers in attendee safety, using cameras at outdoor festivals, having recordings of situations, being able to identify [a potential crowd crush so they can intervene], he says. “We see better trained security, better trained volunteers. Incident reports [are] better, as are things like getting engineers sign off on the stages [for concerts].”
Feature image courtesy of iStock/Briony Campbell
