Insurance To Cover Terror

In a sign of the times, ProSight Specialty Insurance Group – one of the music industry’s top insurers – says it will extend coverage of live performance events to include terrorist attacks.

Photo: [email protected]_Cameron via AP
British Prime Minister David Cameron and French President Francois Hollande pay their respects outside the Bataclan in Paris.

“The coverage will be included in its existing property policy at no additional fee and will apply to concerts that are directly affected by a terrorist attack and scheduled within 10 days of such an incident,” reports the Wall Street Journal.

ProSight’s clients include venues, concert promoters and touring artists. The policy requires such shows to be rescheduled at a venue within 100 miles and within 90 days of a terror attack, with the cost of rescheduling covered if shows are interrupted or canceled.

“When concerts are canceled, all of the people in society are disrupted,” ProSight chief executive Joe Beneducci told the Journal.

The company’s definition of “terrorism” is somewhat broad: “Unlawful acts intended to intimidate the population or influence government activity.” Other insurers reportedly define terrorism as being “motivated by religious, ideological or political purposes.”

ProSight says it is the largest insurer of venues, promoters and artists in the world with nearly $1 billion in annual revenue.

While terrorism insurance policies are already available, the paper reports it is expensive and out of reach of smaller clients. ProSight says its new coverage limits payouts strictly enough that major artists at the largest venues will still pay more for terrorism insurance.

Terrorism insurance was widely available but rarely purchased prior to the September 11, 2001 attacks but it wasn’t seen as much of a risk before then. But when most U.S. insurers began to exclude such coverage from their policies after the attack, the federal government passed the Terrorism Risk Insurance Act the following year.

Under that law, insurers must offer terrorism coverage as separate policies backed by government funding if damages exceed set thresholds. Many of the policies are limited in scope, according to the Journal, and are “sold at a premium.”

Roger Sandau, managing principal at Integro Insurance Brokers of Austin, Texas, told the Journal that while some 75 percent of major artists, which tend to play in the largest arenas and stadiums, purchase terrorism insurance, only about 10 percent of smaller artists do because of the cost.

He said that ProSight’s policies would appeal to them because they “cover up to $100,000 of rescheduling costs, plus an additional $75,000 for psychological counseling, public relations and image restoration, and unrecoverable charges.”