Entertainment & Sports Risk Management Guide 2025

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What to Expect in 2025 What to Expect in 2025 Demand for live events will remain strong, boosting sector revenues. However, film and TV production will continue to grapple with new delivery models. Escalating production costs, skilled labor shortages, extreme weather and arduous insurance requirements could further impede profits and resiliency. Businesses that lean into a comprehensive risk management strategy and data-driven benefits plan can be the stars of their own success stories in 2025. 145 98 million million Number of attendees for Number of attendees for events sponsored by Live events sponsored by Live 1 Nation in 2023. Nation in 2019. 1. AP, “A swift rebound and unprecedented tickets sales for live music after pandemic shut venues down,” April 4, 2024. 2

Profitability The same cast of characters could dampen industry profits, but smart industry players will find ways to prosper. If 2024 was the Year of the Comeback, then 2025 is poised to be its much-anticipated sequel as the demand for live events continues to drive revenue in the entertainment and sports sector. Worldwide revenues for live events is expected to exceed $85 billion, and $96 billion in the next four years.2 Powered by the industry’s successful post-pandemic cord” with their traditional cable subscription services by rebound, this trajectory is also coupled with the public’s 2026 for on-demand streaming services, such as Netflix, quest for experiences that only live, in-person events and 7 Hulu and Disney+. immersive technology can offer. Global entertainment and sports revenues are expected to reach $3.4 trillion by Yet forward-thinking entertainment operations can 3 overcome obstacles to profitability with a thoughtful risk 2028. Live Nation, the parent company of Ticketmaster, reported revenues of $9.8 billion for the first half of 2024, management plan, adequate insurance to protect their a 12% increase from the same period in 2023, and expects bottom line and an experienced broker with a proven 10% growth in 2025.4,5 network of carrier relationships. However, threats to profitability loom. Catastrophic weather continues to wreak havoc on live events, causing 2. Statista, "Event Tickets - Worldwide," March 2024. cancellation insurance premiums to triple.6 Another issue 3. PwC, “Seizing growth opportunities in a dynamic ecosystem,” July affecting profitability is mandatory insurance stipulations 16, 2024. to ensure crowd safety management, emergency 4. Live Nation, “Live Nation Entertainment Reporters Second Quarter 2024 Results,” July 30, 2024. evacuations and other security protocols. 5. Investing.com, “Earnings call: Live Nation reports growth, optimistic about future venues,” July 31, 2024. Elaborate and complex staging, lighting and sound 6. Billboard, “Climate Change Has Caused Event Insurance Prices systems escalate production costs to new levels. And to Triple – and Indie Promoters Are Bearing the Brunt,” March 29, the lack of skilled professionals with industry-specific 2024. experience and knowledge adds another layer to risk. 7. SuperBox, “Cord Cutter News: Analyze, Forecast Potential and Trends,” May 22, 2024. Film and TV production find themselves stymied by new distribution channels and an uncertain technological future. An estimated 72% of U.S. households will “cut the 3

Vitality Finding the right benefits solutions will help calm an unstable labor market. As workers continue to leave the industry for other fields, the skilled labor shortage will continue to challenge the entertainment and sports sector. The industry faces a deficit of experience and institutional knowledge that is impossible to replace. Already in short supply, many ancillary workers such as special effects experts, set designers and production accountants left the industry during the 2023 writers and actors strike for opportunities outside entertainment and 8 have not returned to their previous careers. gigs and self-fund their retirement, making financial The fallout from this ongoing shortage has allowed education important. workers to be more selective in choosing their gigs, often demanding several months’ notice in advance before And with grueling travel schedules and long hours, agreeing to take a job. people in the entertainment and sports industry disproportionately suffer from mental health issues. The lack of available talent may be one reason that the Performing arts workers are twice as likely to suffer industry needs greater productivity from individual from depression than the rest of the population, while employees: 73% of entertainment and sports respondents individuals employed in the arts, design, entertainment 9 to the HUB International 2025 Outlook Executive Survey and sports business have the third-highest rate of suicide listed employee productivity as a top HR priority in 2025, 10 compared with other industries. higher than any other option. Similarly, the overall cost of medical benefits (65%) and recruiting (56%) were the That means entertainment and sports operations need next-highest listed priorities. to put a special emphasis on mental wellbeing through benefits. Delivering personalized benefits plans derived To combat the shortage, entertainment and sports using tools like HUB Workforce Persona Analysis can help organizations are increasing their focus on employee organizations find the right mix of benefits that will help benefits, including health insurance, financial wellbeing optimize recruiting, retention and engagement. programs and retirement options. But the benefits needed to attract and retain talent will need to be personalized for individual employees. 8. Imagine Communications, “Bridging the skills gap: Addressing the talent shortage in the media and entertainment,” June 28, 2024. For instance, live events crews are often older and aging 9. HUB’s Outlook Executive Survey polled 900 C-Suite and VP-level out of the workforce, having been attached to festivals executives on the issues facing them on profitability, employee vitality and organizational resilience. and entertainers for many years. Younger workers coming 10. Centers for Disease Control and Prevention, “Suicide Data and into the business are often more attuned to their benefits Statistics,” accessed September 16, 2024. needs than previous generations. Given the transient nature of the entertainment and sports business, many workers must prepare for interruptions in pay between 4

Resiliency Proper preparation against risk will deliver rave reviews for long- term resilience. The entertainment and sports industry is fraught with risks that can make or break an organization’s reputation and Case Study bottom line. Tough lessons from the past will motivate entertainment and sports companies to adopt a culture of When a music festival became overwhelmed safety, enhance risk management awareness and improve by the number of insurance brokers and planning. underwriters it worked with to procure proper Music festivals are particularly susceptible to unpredictable coverage, it turned to HUB to consolidate its risk and serve as cautionary tales for the entertainment risk management. Doing so allowed the music industry. In the past three decades, at least 175 people festival to identify holes in its risk profile, have died at concerts from deadly stampedes, riots, obtain better coverage options and improve 11 convective storms and shootings. its risk profile. And catastrophic weather, skilled labor shortages and “auxiliary” activities (non-sanctioned ventures outside a live event) result in additional risk and higher insurance premiums. Cancellation, contingency and non-appearance Carriers will continue to require comprehensive coverage rates will rise as much as 15% in some markets. information on evacuation strategies, crowd safety management, security protocols, ongoing training and There are likely to be higher limits for general liability background check systems. insurance to counterbalance the growth in scale and use of technology. As events expand and attract larger crowds, A formal enterprise risk management (ERM) process premium increases will vary by location and genre. Family will help mitigate risk and can result in lower insurance entertainment facilities with liquor liability could see rate premiums, but only 40% of entertainment and sports increases of 25%. respondents to the HUB survey reported having a formal ERM process. Partnering with an experienced broker can For sports operations, nuclear verdicts will continue to help jumpstart ERM efforts. diminish insurer capacity and demand strict underwriting guidelines for abuse and molestation insurance and coverage for concussion and brain-related injuries. 11. Newsweek, “Music Festival Chaos: Inside the Deadly Risks at Concerts,” June 24, 2024. Nuclear verdicts have resulted in reduced limits for umbrella and excess liability and made it more challenging to procure adequate coverage. For example, a venue that previously secured $50 million in excess liability coverage from a single insurer now needs to acquire policies from four or five carriers to reach that limit. 5

Festivals and Large Events “Mega-events” bring mega-risk, but sophisticated planning will bring mega-success. As music festivals and large, multi-day events proliferate, it’s not a matter of if but when a crisis will occur. Live events are competing for limited entertainment spending by increasing the size of events, turning small festivals into “mega-events” that are expensive and risky to produce. In the face of this trend, properly preparing for exposures is imperative and will help organizations not only mitigate losses but also decrease reputational fallout after an incident. Other trends include adopting crowd monitoring systems and apps that can identify issues and communicate to Employee training, robust security protocols for crowd both staff and attendees in real time, as well as using facial management and safety (including an emergency authentication software to enhance security. response plan) are critical for venue owners, event planners and promoters. These protocols are particularly Venues and production firms are also going back to the important for large concerts or sporting events with basics: Designating a point person empowered to cancel 100,000 or more attendees. an event or evacuate a facility and routinely running tabletop exercises to prepare for all risks. Weather events like convective storms can turn a mega- event into a disaster. Ensuring proper security and safety can be difÏcult — experienced safety and security professionals have left the industry, taking with them years of industry knowledge and expertise. However, sophisticated weather modeling, communication strategies and advanced security processes are reducing risk. Live event companies are investing in weather forecasting technologies and embracing new methods to better communicate with staff and attendees to evacuate a space quickly if needed. In fact, nearly 40% of entertainment and sports respondents to the HUB survey are using modeling and forecasting to evaluate the potential impact of anticipated risks. 66

Navigating Your Next Steps Navigating Your Next Steps HUB construction insurance, risk management and employee benefits HUB entertainment and sports insurance specialists will work with you to specialists will work with you to develop a tailored strategy that will protect develop a tailored strategy that will protect the bottom line, support your the bottom line, support your workforce and build resiliency for 2025. Here workforce and build resiliency for 2025. Here are some initial considerations: are some initial considerations: Making risk management a pillar of your organization’s culture Making risk management the centerpiece of your organization’s Develop a can help identify exposures and develop response plans in case Develop a culture can help identify exposures and devise the right 1 comprehensive of any type of incident, whether that is a weather-related event, comprehensive response in the case of an incident. Work with a broker with 1 risk plan. a threat of physical safety or a cyberattack. Make sure your risk plan. deep industry expertise to approach risk strategically and broker understands how to approach risk and can identify gaps identify gaps in your insurance program. in insurance that could disrupt your daily operations. Entertainment and sports companies are in the midst of a labor To compete for a shrinking pool of skilled labor, personalized benefits Create a shortage, but those with a benefits strategy based on personalization Create a based on HUB Workforce Persona Analysis and data analytics can personalized and fostering a quality employee experience (QEX) will boost personalized help your company differentiate itself from the competition. Creating 2 benefits engagement, have an advantage in recruiting and retaining talent 2 benefits a quality employee experience (QEX) will boost engagement, improve strategy. and lower risk. Work with your broker to identify employees’ needs to strategy. recruitment and retention and promote worker wellbeing create a personalized benefits strategy. An incident can devastate an organization’s reputation. Work Remain Safety is already the focal point of your operation, but with Rely on your with your broker to reduce risks and develop strategies to focused on an influx of new and less-experienced workers, injury risks 3 partners in a mitigate exposures. And take advantage of your carrier’s 3 workplace increase. Work with a risk professional to review your safety crisis. expertise if an event occurs — they may be able to assist with safety. program at least annually and address any issues. legal counsel, crisis management and digital forensics. Consistent communication with your broker will help identify Stay in contact with your broker and let them know about and mitigate issues in advance of the next renewal and position Be transparent changes to the business to eliminate surprises at renewal. Be transparent your organization in the best light. Review exposures and with your Review exposures and insurance needs at least 90 days prior 4 with your insurance needs at least 90 days prior to policy renewal to 4 broker. to policy renewal to allow your broker to find the optimal broker. allow your broker to find the optimal mix of coverage for your coverages for your organization. organization’s needs. 7 7

Entertainment & Sports Rate Guide — U.S. HUB International’s rate guidance comprises an analysis of proprietary national survey data and interviews with HUB commercial insurance brokers and risk services consultants who specialize in the Entertainment & Sports industry. On average, rates for middle- to upper-middle-market companies are experiencing rate increases for nearly all coverages as carriers need additional premium to support increased losses and expenses. Below are projections of rate increases that we anticipate in 2025. It’s important to discuss your business’ exposure with your insurance broker and understand what to expect well in advance of your next renewal. 2025 Entertainment Coverage & Sports Rate Insights Guide Loss trends are increasing because of distracted driving and social inflation. Rate increases persist to counterbalance rising costs — labor, vehicle replacement (new), and technology-enabled Commercial Auto +5% to 10% replacement parts. Carriers are scrutinizing exposures specific to coverage for hired and non-owned auto, especially for accounts with claims activity. Property-casualty insurance is expected to remain profitable, leading to overall stability in the GL market. Specific to the entertainment sector, insureds are purchasing higher limits to counterbalance the growth in the scale of events General Liability Flat to +10% and use of technology. Expect rates to vary by genre, location and segment. Facility/family entertainment risks could face rate increases of 15% to 25%, especially pertaining to liquor liability. Exposure to ropes courses, rock climbing or zip courses remains is hard to place. Overall, workers’ compensation has remained highly profitable, but reinsurers are concerned that the labor shortage could spell trouble ahead. Workers For entertainment risks, the challenge in finding skilled workers Compensation -3% to +3% persists, creating an underwriting concern and potential impact to premiums. Increased workplace violence and classification of workers as either employees or independent contractors are possible factors in rate changes. Rates are moderating for most clients and, with more market competition for higher layers, some insureds are even experiencing rate reductions. Umbrella & Excess +10% to 20% Liability Festivals and tours that expect to draw large crowd attendance could be required to purchase higher limits, based on contractual obligations to the specific venue. 8

Entertainment & Sports Rate Guide — U.S. 2025 Entertainment Coverage & Sports Rate Insights Guide +5% to 7% Capacity is more restrictive with some carriers being more General Liability & General LIability selective or unable to offer the same level of coverage limits as Excess Liability - they historically have. National Governing Body & Athletic +10% to 25% For Excess Liability, expect higher minimum premiums. Stringent Excess Liability guidelines persist for exposure to Sexual Abuse & Molestation, Associations Concussion, Chronic Traumatic Encephalopathy (CTE), and Traumatic Brain Injury (TBI). Results reflect market recovery and depend heavily on account metrics (occupancy, business class, loss control, catastrophic Commercial Property -5% to +10% exposure, claims history, etc.). Accounts that are being non- renewed by incumbents, particularly single carrier placements, are still seeing less favorable results in the form of larger rate increases and/or increased deductibles and retentions. While rates in certain geographies are stabilizing for catastrophic perils, there are exceptions, especially for wind and earthquake exposed accounts that have seen drastic run-ups in rates and premiums during the hard market cycle. Carriers remain focused on valuations, driving increased costs for some insurance Catastrophic Perils -10% to +5% programs. While there are signs of the market softening with specialty carriers, the standard market is still working to achieve adequate rates on their book. Severe and convective storm and wildfire continue to be significant concerns for underwriters and there is also a major focus on the Atlantic Wind Season. Capacity between carriers for D&O placements remains strong. D&O -10% to +5% Underwriters are aggressively cutting premiums, giving automatic renewals and awarding two-year policies to maintain business. Premiums for cyber liability insurance are expected to continue to fall. Breaches and outages of significant service providers (i.e., Cyber -10% to Flat breaches at Change Healthcare and Crowdstrike) haven’t led to rate hikes yet but may point to harder market conditions in the first half of 2025. Event Cancellation, Rate and capacity considerations include weather, climate Contingency & Non- Flat to +15% change, active shooter and civil authority. Carriers are stringent in Appearance underwriting not only the actual event but also auxiliary activities surrounding the event. Flat to +5% Less than $5M Production & Film budget Regardless of the production size, expect underwriting scrutiny on Package +10% to 25% overall risk and safety protocols. $5M budget or more 9

Entertainment & Sports Rate Guide — U.S. 2025 Entertainment Coverage & Sports Rate Insights Guide Media Errors & Flat to +10% Carriers are tightening capacity on Media E&O. Underwriters are Omissions stringent and judicious as to how capacity is deployed. The market remains hard with no relief in sight as increased utilization persists post pandemic. Many employers are seeking additional benefit offerings that improve access to mental health Health Insurance Rates Vary services, work/life balance, student loan debt and financial wellness support, and creative compensation strategies that benefit the employees without a huge impact to the employers’ bottom line. NOTE: Rate is typically defined as the amount of money necessary to cover losses and expenses while providing an insurance company with a profit for a unit of exposure. Exposure refers to a business’ or individual’s susceptibility to various daily risks. Carriers evaluate the level of risk an insured faces in calculating insurance premiums. 10

HUB Entertainment & Sports When you partner with us, you’re at the center of a vast network of experts who will help you reach your goals. For more information on how to manage your insurance costs, reduce your risk and take care of your employees, talk to a HUB entertainment and sports specialist. $305M in commercial insurance premium brokered by HUB 50,500 insurance policies managed 8,100 entertainment and sports clients Stay up to date Subscribe to receive risk and insurance insights and event invitations throughout 2025. Subscribe hubinternational.com