How Festival Insurance Helps Summer Music Fests Cash In

Summer music fests are big business. In 2016, Desert Trip festival grossed more than $160 million and Coachella Valley Music & Arts Festival brought in over $94 million. Even smaller gatherings are bringing in profits for both performers and organizers. But music festivals also come with a large amount of risk. For organizers to really cash in, they need to avoid Fyre-like disasters and have the right amount of festival insurance in place.

In an ideal scenario, festival organizers and risk experts are able to identify and remove every possible danger. Music festivals go off without an incident, attendees stay safe, no one gets injured, and nobody gets sued. But that’s not always the case.

Five years ago, a stage collapse at the Indiana State Fair killed seven fans and injured 100 more minutes before Sugarland were set to perform. Winds over 60 MPH caused rigging above the stage to fail. Investigators found the failed rigging didn’t meet industry standards. Sugarland, concert promoters, and other defendants ended up paying over $39 million to settle claims from the tragedy.

The same year, four other major stage collapses affected festivals worldwide.

How Festival Insurance Protects Profits

Festival risks come in many forms such as collapsed stages, cancelled performers, severe weather, and alcohol, to name a few. Big events, like Coachella and Bonnaroo, typically take on at least five kinds of insurance policies to protect organizers’ interests.

Festival insurance coverage can include a number of different policies such as:

  • Cancellation
  • Terrorism
  • General liability
  • Business auto
  • Workers’ compensation
  • Bodily harm
  • Umbrella coverage
  • Spectator liability
  • Alcohol liability
  • Liability for owned or leased property
  • Contractual liability

Festival insurance works by protecting organizers, vendors, and performers against large claims if something goes wrong during a performance.

Festival Disasters Even Insurance Couldn’t Help

Last year’s Fyre festival was the epitome of a music fest gone wrong.

Billed as the music event of the decade, Fyre was supposed to be Coachella on a private island in the Bahamas. More than 2 dozen artists were promised, over $1 million in cash and jewelry was supposed to be up for grabs in an island-wide treasure hunt, and guests were promised luxury accommodations and all-inclusive meals.

After spending thousands of dollars for tickets, attendees were shocked to find that the festival better resembled a disaster relief effort than a luxury, all-inclusive music fest. Fyre fest has gone down in the books as the biggest music festival disaster ever and organizers are facing lawsuits of $100 million as a result.

Rumors have it that Fyre didn’t have cancellation insurance in place, but even if they did it’s not likely their policy would completely cover the amount of paying back every ticket purchase. The organizers would still be facing lawsuits and claims, even if they had dozens of insurance policies in place. The Fyre festival is a perfect example of how not to throw a successful music fest.

But with the right planning, expertise, and festival insurance in place, most festivals avoid Fyre-like disasters and bring in impressive profits, instead.

Be a Coachella, Not a Fyre

This year, Coachella expanded by 40-acres, boosting the number of attendees from 99,000 to 125,000. The expansion included a new stage and more general admission parking, as well as more overall space to accommodate additional attendees. Despite having 52,000 more tickets available for the 2017 festival, Coachella tickets still sold out within 3 hours. Attendees pay $399 for a general admission ticket and VIP tickets go for $899. Coachella is primed to be the highest grossing music festival of 2017.

From the $39 million in settled claims for the Sugarland stage collapse to the $100 million in lawsuits filed against the organizers of the Fyre festival, a music fest can be financially devastating if not insured properly. But successful festivals such as Coachella prove that you can throw a very profitable music festival with the right organization and the right festival insurance plans in place to protect your financial investments.




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