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Editor's note: Kathryn Dorton is a senior vice president in the sports and entertainment practice at Marsh's Denver office. She is also the insurance broker for one of the world's largest concert promoters, securing coverage for everything from three-day festivals to major artist tours to nightclub acts. In 2007, she was named an Entertainment-Media Power Broker, recognized for her work ethic and for always being personable and professional. One client commented, "She's easy to work with, but she's a very powerful person."

Risk & Insurance® Associate Editor Erin Fogg spoke with her about the challenges of insuring the concert promotion segment of the entertainment industry.

Kathryn Dorton: I help them review contracts, making sure they are signing contracts with subcontractors and vendors and getting indemnification from them, especially vendors setting up tents, stages, lighting, rigging. I make sure that they are getting named as an additional insured by these vendors.

EF: Is it becoming more common that the venue is asking the promoter to take on more of the risk?

KD: I think it's more recent that the venues are adding things to the list of what the promoters are responsible for. They are required to insure the exposure, but they have no control over it. There are some venues that have "four-wall" contracts that make the promoter responsible for security, building defects and in some cases liquor liability. These are things that the promoter has no control over. If someone were injured because a seat broke or a stair crumbled and they fell down the stairs, they expect the promoter to be responsible for that exposure.

Dealing with the carriers to get them to cover these exposures, it's sometimes difficult. A lot of times there are no other options (than) to switch venues.

In certain cities there are only so many venues and so many venues the size that they need them to be. If you need a large venue and a certain city only has one, you're stuck. It depends on the client, but I think the carriers understand that some contracts are favorable and some are unfavorable. They take that into consideration when they are binding the policy.

EF: In which area of this industry is there the greatest amount of risk?

KD: Probably bodily injury to the attendees. You could have issues with an injury due to a stage or a tent collapsing at an outdoor festival. It could happen with someone tripping down the stairs, someone collapses or injures themself during crowd surfing. I think that's the largest exposure.

EF: What events are the most difficult to secure coverage for?

KD: Different genres of music--sometimes you are not even able to procure insurance for an event depending on what the genre is.

EF: Are there any current events or new issues affecting your concert promoters?

KD: There's really not. There haven't been any major claims or catastrophes recently. There's nothing that's prohibiting us from finding coverage for most events.

EF: What about coverage for event cancellation in inclement weather?

KD: You can buy different types of coverage: There's event cancellation, nonappearance, and then there's weather insurance. Weather insurance covers only the weather, and people purchase it when they think there's the possibility the event could get rained out or they could have lightning storms. It could even be purchased for areas where there could be hurricanes.

Hopefully, the promoter schedules an event so they don't have that exposure. Event cancellation would be the total cancellation of an event. It could be terrorism related or the venue had a flood or a fire and there was no way they could move the event to another venue.

EF: What about coverage for nonappearance?

KD: Nonappearance is available. It's something that promoters buy for tours, not necessarily a one-time event. It's pretty easy to obtain. It covers almost anything out of their control. Challenges would be if the artist has a history of not showing up at an event. I think the tour budgets are much higher than they were 20 or 30 years ago. They have a lot more to lose as far as revenue in the event of a nonappearance.

EF: What part of your job is the most fun?

KD: Working with my clients. I enjoy the notoriety surrounding some of my clients. I enjoy dealing with the intricacies of their business. It's just a fun industry to be in.

June 1, 2007

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