Theatrical Production Insurance

Some of the top factors that affect the cost of theatrical production insurance include:

• Type of theatrical performances: It'll cost more to insure a performance featuring high-energy dancing or stage pyrotechnics than one with fewer risks.
• Annual revenue: Businesses that earn more revenue are associated with costlier claims, which means they pay more for insurance.
• Number of employees. A larger workforce brings a higher risk of employee accidents and mistakes, which raises the cost of workers' compensation, general liability, and similar policies.
• Property value and condition: The age, condition, and value of your theater, props, and audio-visual (AV) equipment will determine how much it costs to insure them.
• Business location: Localized factors such as crime rates, healthcare costs, foot traffic, risk of natural disasters, and property values can impact your insurance premiums.
• Safety training: Insurers may offer lower rates to companies that have staff trained in the Entertainment Technician Certification Program (ETCP) or other safe practices.
• Security measures: Businesses that implement video surveillance, sprinkler systems, and other security measures, including cybersecurity controls, usually have lower premiums.
• Policy limits and deductibles: Insurance policies with higher limits and lower deductibles provide better protection, but come with a higher premium.
• Claims history: A production company that has filed an insurance claim in the past will cost more to insure than one with a clean claims history.

Theaters and theatrical production companies may need several licenses and permits depending on the specifics of a performance and the services they offer.

Here's what you might need to run a production company:

• Business license. Every business owner typically needs a business license to operate legally.
• Performance license. Usually obtained from the play's publisher, this license gives you the right to perform a copyrighted work.
• Master use and sync license. These allow you to use copyrighted music during a performance. They must be secured from the artist, record label, or publisher.
• Health permit. If your theater sells food or drinks, then you'll need a health permit for your business and a food handlers card for your employees.
• Liquor license. Any business that sells or serves alcohol needs a liquor license.

Every area has its own regulations, so you'll need to do a little research to ensure compliance with local zoning regulations, noise ordinances, and fire and safety standards.

Keep in mind, you might also need to pay royalties to perform a copyrighted play or use copyrighted music.

Yes, theaters and other performing arts venues typically require proof of general liability insurance before allowing your company into their space. You can expect them to request at least $1 million in coverage and ask to be listed as an additional insured on the policy.

Commercial general liability insurance protects the venue in the event of an accidental bodily injury or property damage, such as an audience member who trips on the front step and suffers a concussion, or a stage that gets scratched by a heavy set piece. It can pay for medical bills, repairs, or legal costs if the injured party sues.

You might also need proof of liability insurance to sign a commercial lease, get a business loan, or obtain a license or permit. Even when it's not required, it's important to carry insurance to protect against costly accidents and lawsuits that could otherwise bankrupt your business.

Yes, you can buy one-day special event insurance, short-term liability insurance, or seasonal insurance that provides liability coverage for a specific event or series of performances, such as a Shakespeare in the Park summer series.

However, there are several reasons to opt for year-round coverage instead:

• It's expensive to stop and start coverage. Businesses that cancel their policies may see increased premiums or have difficulty restarting coverage, as insurance carriers view it as a red flag.
• It may cost more in the long run. Going without insurance leaves you exposed to costly risks. For example, a fire at a theater that's closed for the season could destroy valuable props, sound equipment, and other property.
• Some policies won't provide coverage. Occurrence-based policies like general liability continue to cover incidents that happened while you were insured, but that's not the case for claims-made policies like professional liability insurance, which must be kept active to provide protection.

Theater insurance policies sometimes include coverage for touring productions, but it's not always supplied automatically. You might need a separate policy or endorsement to be fully protected.

In particular, touring productions may need:

• Inland marine insurance: Also called tools and equipment insurance, this policy covers your business property wherever you bring it, including property in transit. Standard commercial property insurance only covers items at your primary location, which is why you might need additional coverage.
• General liability coverage: To protect against third-party accidents, you'll need liability insurance at every venue where you perform. You can often add a venue to your policy as an additional insured to make sure you're protected.

If you rent your own theater to other performers, then you may want to include them on your policy as an additional insured or ask them to show proof of insurance.

Owners of theatrical production companies often invest in the following insurance products to protect against unexpected out-of-pocket costs:

• Commercial property insurance covers burglaries, fires, storms, and similar incidents that damage or destroy business property. You can add business interruption insurance to cover temporary closures tied to property claims.
• Equipment breakdown insurance protects against financial losses caused by the sudden failure of a lighting array, projector, rigging system, or other equipment.
• Event cancellation insurance provides reimbursement for lost profits and nonrefundable deposits if a storm or other event outside of your control forces you to cancel a performance.
• Employment practices liability insurance (EPLI) pays for legal fees related to violations of employee rights, such as unfair hiring practices or wrongful termination.
• Directors and officers (D&O) insurance protects your board members and officers from lawsuits related to the decisions they make on behalf of your company. You can bundle it with other types of management liability insurance, such as EPLI.
• Crime insurance, such as a fidelity bond, provides reimbursement in the event of employee theft or fraud. It's sometimes called employee dishonesty coverage.
• Hired and non-owned auto (HNOA) insurance covers auto accidents involving a personal, rented, or leased vehicle used for business purposes.
• Commercial umbrella insurance, similar to excess liability insurance, provides coverage when your general liability, commercial auto, or employer's liability insurance reaches the limit on a liability claim.
• Liquor liability insurance covers damages and legal costs if an intoxicated patron who bought alcohol at your theater goes on to harm someone else. For events where alcohol is provided or permitted, you can invest in host liquor liability insurance instead.

Insureon's licensed agents can help you find the right performing arts insurance for your company, including specialty insurance for any unique risks.