Organisations

Insurance for theatres, event companies, associations and organisations

The same applies here: only existential risk has to be insured. This is about creating a backup of what you achieved. Get reliable advice about insurance matters, just like you do for tax matters.

Which risks should theatres and associations insure?

  • Liability for damages caused by personal injury, property damage or financial loss (liability)

  • Special event risk

  • Loss, damage or destruction of props, equipment or entire venues

  • Legal insurance

  • Insuring employees

Links

Liability for damages of cultural establishments and cultural associations:
Section 823(1) of the German Civil Code

Management liability:
EventFAQ.de

Event cancelation insurance:
Insuring the risk of event cancelation

Mandatory insurance for employed theatre workers:
German Theatre Workers’ Pension Insurance Fund [Versorgungsanstalt der deutschen Bühnen (VddB)]

Liability (organiser and association liability insurance)

Cultural establishments and cultural associations may also be liable for damages under Section 823(1) of the German Civil Code. Liability of legal persons depends on their legal form. In addition to the association or company, responsible persons, such as managing directors or board chairpersons, may be personally liable to the extent of their personal assets. Information about management liability is provided by the Kassel-Marburg Chamber of Commerce and Industry.

Insurance for organisers' or associations' liability
© Graphic: Panatom

At associations and companies, such as limited liability companies, liability for personal injury and property damage is insured separately from liability for financial loss.

Typical event liability insurance of an association or limited liability company includes:

  • Coverage: At least EUR 6 million, but may go up to EUR 10 million or EUR 20 million.
  • Insured risk: Purpose of the association or business activity. This depends on what is reported. Only reported activities will be insured.
  • Premiums: Depend on an association’s number of members (the insurance company will request the articles of association and number of members) or a limited liability company’s annual revenue.
  • Insured persons: Employees as part of their professional activities and, at associations, the members at association events.

Important: As freelance subcontractors, freelancers, self-employed artists and event technicians need their own liability insurance because they have no more than secondary coverage against third parties under the insurance of the association or limited liability company. The association or the limited liability company should request proof of liability insurance.
Alternatively, freelancers may be added to the policy through extended coverage. But this is expensive—and why should someone pay for third parties?

  • Extent of coverage:
    • Internal events
    • Public events at own spaces (including of third parties)
    • Public events at specified venues for theatre/cultural associations, organising external events, including F&B services, providing stage equipment and the cloakroom as agreed
    • Other public events with up to 100 participants, special agreement required otherwise
    • Association real estate property and sales outlets
  • Coverage in: Germany
  • Other coverage: Typical business liability insurance coverage included or may be added, e.g. advertising facilities, environmental liability, computer/Internet damages, etc.

Liability for financial loss

Associations and companies must separately insure the risk of damages caused negligently through financial loss of third parties. Liability insurance for financial loss will cover these damages if the financial loss of the third parties was caused through negligence. Examples include copyright infringements in marketing, delegating event security to an unsuitable person, missing deadlines when requesting funds, failing to check for internal irregularities, etc.

Risk of financial loss may be insured on 2 levels:

  • On the company or association level through liability insurance for financial loss. This is especially useful for theatres and organisers with high revenue and associations and organisations with high liability limits.
  • On the level of the responsible persons, i.e., of board chairpersons and managing directors, through D&O insurance (directors & officers, management liability insurance). This is normally obtained and paid for by the association or company, but is also available directly to responsible persons.
Overview of liability for financial loss
© Graphic: Panatom

Associations’ financial loss liability

Financial loss caused by volunteers of an association through gross negligence or breaches of duty of care is not covered by private or the association’s general liability insurance. Although board chairpersons may claim exemption from the association’s liability, this is not possible in case of gross negligence. D&O insurance may therefore also be useful for associations.

Important: Members of the board are jointly and severally liable. The insurance company may seek recourse from one board member for damages compensated by another member. Such points should be considered.

Questions and answers:

  • Unfortunately, public funders, such as states or municipalities, are rarely open to funding insurance. They usually cover their risks through risk compensation schemes among each other and often don’t even insure their own buildings. This makes it difficult for sponsored organisations to enforce insurance claims. This a problem for association and public relations work: cultural work should be possible without leaving the association with damages or responsible persons being personally liable.

    A way out is offered by private liability insurance for financial loss that covers volunteer work. Coverage is normally limited to EUR 25,000. Otherwise, own D&O insurance may offer greater coverage.

    Unfortunately, public funders, such as states or municipalities, are rarely open to funding insurance. They usually cover their risks through risk compensation schemes among each other and often don’t even insure their own buildings. This makes it difficult for sponsored organisations to enforce insurance claims. This a problem for association and public relations work: cultural work should be possible without leaving the association with damages or responsible persons being personally liable.

    A way out is offered by private liability insurance for financial loss that covers volunteer work. Coverage is normally limited to EUR 25,000. Otherwise, own D&O insurance may offer greater coverage.

Event insurance: liability, equipment, cancelation

For companies and associations organising theatre performances or other artistic events, special event insurance may be useful. Such insurance includes 3 things:

  • Event liability insurance
  • Contents insurance for props, technical devices and other equipment
  • Event cancelation insurance
3 components when insuring events: liablity (damage at venue); contents (equipment or cosumes stolen); cancelation (artist injured).
© Graphic: Panatom

Questions and answers:

  • Determining the organisers can indeed be difficult. Whoever officially announces, initiates or enables the event and whose name at least would have been on the placards is the organiser. It is certainly possible for performing artists to be the organisers. In this case, you should check whether liability is covered by an artist liability insurance policy or if organiser insurance is required for the event.

    Determining the organisers can indeed be difficult. Whoever officially announces, initiates or enables the event and whose name at least would have been on the placards is the organiser. It is certainly possible for performing artists to be the organisers. In this case, you should check whether liability is covered by an artist liability insurance policy or if organiser insurance is required for the event.

  • This requires pandemic coverage. Unfortunately, this is not offered for event cancelation insurance. Cancelation due to a pandemic therefore can’t be insured in the theatre and event business. Such coverage is only available to the food service industry.

    This requires pandemic coverage. Unfortunately, this is not offered for event cancelation insurance. Cancelation due to a pandemic therefore can’t be insured in the theatre and event business. Such coverage is only available to the food service industry.

Organiser liability insurance

An association or company that acts as the organiser thereby assumes extensive liability, e.g. for the safety of the stage, stands, emergency escape routes and for the security of the premises and pathways.

This special liability risk of an organiser can be included in a business or liability insurance policy. Alternatively, specific events may be insured separately. Depending on the event or performance, event liability insurance may also include environmental or flood damage (at outdoor events), property damage to rented stage equipment or claims based on intellectual property rights infringements by the organiser.

Equipment/property insurance for organisers

Events require various equipment: stages, tents, trusses, props, sanitary containers, lighting, sound and control systems, barriers, etc. Property insurance for organisers covers damages caused by as well as damage to or loss of this equipment and may be obtained for regular or single events. All-risk policies which aren’t limited to explicitly-stated causes of damages, such as theft, fire, vandalism, etc., may also be useful.

Such coverage requires precise inventory lists which specify the characteristics and value, especially of expensive equipment. For objects that are transported regularly, coverage should include transport and storage.

Event cancelation insurance

Cancelation, suspension or postponement of an event or performance can be costly for the organiser. Money was spent on marketing, spaces and service providers were booked, tickets have to be refunded, etc. However, such cancelation costs can be insured. Event cancelation insurance covers 3 possible cases:

  • Variant A: Cancelation for reasons for which the organiser is not responsible, e.g. a general power outage.
  • Variant B: Artists can’t come, e.g. due to an accident or illness. Cases in which performers wilfully or intentionally refuse to come are not covered.
  • Variant C: Severe weather, such as heavy rain or a storm, prevents the event.

Cancelation due to technical problems of service providers, cyberattacks, strikes or operating errors can also be insured.

Event cancelation insurance is useful for event budgets of at least EUR 10,000 and indispensable for large events. Coverage may be determined in 2 ways:

  • Based on the costs necessary for covering losses
  • Based on the costs and projected profit, including from sponsorships, etc., to insure the business

Further information is provided by the blog post Insuring Event Cancelation of insurance expert Christian Grüner.

 

 

Contents insurance and building insurance

There are 2 options for insuring own venues:

  • Contents insurance to insure possessions at a venue
  • Building insurance to insure the building
Insuring the venue: building insurance (insures the building) and contents insurance (insures what's inside)
© Graphic: Panatom

Because relatively few theatres and theatre associations own their venues, contents insurance is important in practice.

What are contents?

Contents insurance is like home insurance in that it provides protection against loss or damage of possessions in the building, basically ‘anything that can be carried out’.
What exactly is covered by the owner’s building insurance and by the contents insurance must be determined in each case. The fixed stage floor is not normally covered under contents insurance. To be insured, the stage floor must be specified explicitly in the policy.

Contents insurance is usually limited to common risk, such as burglaries/theft, vandalism, fire, tap water and storms, but may be extended if necessary to include, e.g. glass damage or provide all-risk insurance. Disaster damage (floods, hail, snow pressure, etc.) may also be covered. Although such coverage is more applicable to building insurance, it may also be useful for content insurance if you store your equipment in a basement with the risk of flood damage.

Income protection

A venue’s contents insurance should include income protection insurance which will pay the income that is lost if the venue is forced to close temporarily after a fire damages equipment or props are stolen. Payment will normally be provided for up to 12 months, but this period may be individually adjusted.

Questions and answers:

  • Good private home insurance should cover items used for work. It is important to report these to the insurance company and insist on and keep written confirmation. However, files can’t be insured: their value is difficult to determine and compensate. An organisational solution, such as digitization and backups, may be better.

    Good private home insurance should cover items used for work. It is important to report these to the insurance company and insist on and keep written confirmation. However, files can’t be insured: their value is difficult to determine and compensate. An organisational solution, such as digitization and backups, may be better.

Important: Is coverage adequate?

Income protection insurance often provides the same coverage as the actual contents insurance and is based on the value of the stage, seats, F&B equipment, etc. This coverage may be too low to provide income protection and should be checked. The amount needed for 12 months corresponds to the annual revenue or the budget minus expenses for unnecessary goods and inventory or, alternatively, to projected profit or net income minus wages and costs, such as rent.

Insuring workers

Like all employers and principals, theatres and theatre associations have to distinguish between freelancers and employees subject to social security contributions. Freelancers and subcontractors are responsible for their own social security contributions.

Employees must be registered with the statutory social security scheme (for health, nursing care, pension and unemployment insurance) and with their applicable trade association (for accident insurance). Employed theatre workers are also required to be insured by the German Theatre Workers’ Pension Insurance Fund [Versorgungsanstalt der deutschen Bühnen (VddB)] (‘die Bayerische’) which provides an additional old-age pension, benefits in case of disability (only in case of 100%-long-term disability) and benefits for surviving dependents.

Professional liability of employees is covered under the liability insurance of their employer, except in case of intent or gross negligence.

Legal insurance

Liability and contents insurance are normally also more important for theatres and theatre associations than legal insurance. Nonetheless, legal insurance may be useful for protection against claims under:

  • Employment law—disputes are always possible when hiring employees
  • Traffic law, if the company or association has own vehicles
  • Administrative law to defend against unfavourable notices, e.g. when losing one’s charitable status
  • Real estate law if the association or company is a tenant, landlord or owner
  • Contract law for auxiliary activities (e.g. leasing)

Note: Large organisers may also obtain special event insurance which covers, e.g. legal costs in case of disputes with employees, authorities, sponsors or artists

However, real contract insurance is not possible or very expensive. If artists commit breaches of contract or demand unreasonable fees, better protection will be provided by good contracts and competent lawyers.