What happens with insurance and the advertising space now?

The COVID-19 pandemic has changed the landscape

What happens with insurance and the advertising space now?

Insurance News

By Mia Wallace

Among the wealth of industries that have been impacted by the coronavirus pandemic, one which ironically hasn’t had a lot of Press time, is the advertising space. From reduced spends, to cancellations, the sector has felt the full force of COVID-19.

The problems in this area haven’t, however, escaped CFC’s media team leader, Jade Giltrap (pictured). Since the outbreak of the pandemic, a steady stream of global events has been cancelled - from the Tokyo Olympics to Wimbledon to Glastonbury - and beyond the widespread disappointment, there is a serious financial implication for the licensees involved.

“It’s such an interesting time because you have events like the Olympics or Wimbledon being cancelled and there is such a huge amount of licence agreements and sponsorship deals and endorsement deals sat behind that, which are now just incapable of being fulfilled,” she said. “So, what happens to those contracts now?

“Some of them… just can’t be fulfilled, therefore, they no longer exist. But you still have a lot of parties who have spent a lot of money and who are no longer getting any income. So, this is an area that is ripe for litigation but it’s also an area where the whole industry needs to pull together to survive and to effectively find new opportunities.”

The questions that should be asked, according to Giltrap, are where are consumers operating at the moment, and where are people spending their money? Everybody wants to see streaming content going forward, and any digital content that can be consumed in the home is still an area of opportunity. At-home leisure and technology still appear to be growing, and there are areas that licensees can move into if they are still financially capable of doing so.

The traditional lines of connecting with customers are going to evolve. Following the pandemic, Giltrap believes that there will be an enhanced understanding of the impact that mass cancellations can have on the sector, as well as new opportunities within the “social distancing content economy.”

“People are going to get really used to talking to all of their family once a week online or connecting with all their friends online, and I think that clever licensees will probably try and lean into that going forward,” she said. “The impact of the coronavirus will likely be similar to other industries in that it is a time when people will have to think and reflect on how to move ahead in a world that looks a bit more digital than physical.”

Just before the coronavirus outbreak, CFC created a product called licence agreement liability which provides protection to licensees for an unintentional breach of their license agreements, including cover for intellectual property infringement. This ensures that when an IP asset is covered there is also coverage for any breach of contract relating to that IP asset.

The coronavirus pandemic will make the purchasers of insurance revisit the exposures that they have and may lead to an uptake in new products and solutions to mitigate against the risk of such events occurring again, Giltrap said, and insurance providers will have to consider these scenarios.

“The sector itself, as it relates to breach of contract and intellectual property, has not traditionally been well-catered for,” she said, “but I think it probably will be well catered for going forward. It has been a massively exploding industry prior to this, and it will continue to explode, it will just be done in a different way.”

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