The media sector is under increased pressure to mitigate risks more effectively, as insurers are increasingly losing their appetite for high risk clients in the space.
Natasha Barker, manager of corporate for Gallagher, says the media sector is facing a myriad of new risks, which is pushing many insurers to ask more of their policyholders.
“Gallagher brokers are asking a lot more questions of our clients and investing the time in understanding how they are managing their risks in order to entice insurers to offer quotes, because they are backing away from higher risk exposures,” says Barker.
One of key risks, Barker says, centres around terrorist threats or lone-wolf attacks, with concert venues and media outlets finding themselves a target in recent years.
“Media or events present an attractive target for assailants who want to create mass disruption with the effect widely seen and heard,” says Barker. “They choose their targets with a view to reaching a widespread audience, and media companies and entertainment venues will often fit that profile.”
As a result, there has been a shift towards increased risk management in the space as well as an emergence of insurance policies that assist with recovery in the aftermath of an attack.
“This includes coverage of public relations and crisis management costs, other specialist consultancy services such as security and counselling, as well as cover for business interruption,” says Barker.
Contractor liability is also a major risk for those in the media sector, particularly as the use of drones in media productions has been rapidly increasing in recent years.
“Drones are usually operated by contractors because it’s a specialist type of filming, subject to aviation regulations,” explains Barker. “While everyone knows that when engaging a contractor you need to task them for evidence of their public liability insurance, what is not always front of mind is that there are aviation exclusions in public liability policies so they may not necessarily provide cover for operating the drones.”
Contractor exposure also extends to the talent used in productions, warns Barker, as traditional directors’ and officers’ insurance, or employment practice liability policies, may only cover claims related to directors, officers or employees.
Other challenges for the sector have emerged as a result of the #MeToo movement and Barker says brokers should be wary that policies will react if such instances arise.
“In the wake of the #MeToo campaign there is increased awareness around harassment type incidents or claims,” she says. “Brokers need to ensure the insurance program will respond if there are any of those sorts of allegations involving contractors.”
Other insurance covers involved in media production are also becoming harder to place with motor insurance and property insurance both on the rise.
“Insurers for both are becoming more selective and are shying away from the risk of anything that’s unattractive, such as vehicles used in front of the camera, or props and sets,” says Barker.
“Props and sets, even wardrobe items, are usually low in value and often made from combustible materials like MDF and polystyrene, with acrylic paints, plastics and glues,” she continues. “Because they are not high in value it’s hard for insurers to collect a lot of premium, so many steer away if they don’t consider it worthwhile or profitable.”