The Importance Of Insurance For Music Companies: What The Data Shows

The Importance Of Insurance For Music Companies: What The Data Shows. Having adequate insurance is critical for companies in the music industry to protect against potential liabilities.
Photo by Artūras Kokorevas: https://www.pexels.com/photo/band-sitting-during-a-concert-15521517/

Having adequate insurance is critical for companies in the music industry to protect against potential liabilities. According to recent data, 40% of small business owners are likely to file a claim within 10 years, with the claim being a property or liability loss.

With so many possible incidents that could lead to expensive claims or lawsuits – from minor customer injuries to large property damages – music companies need to safeguard themselves. General liability insurance, which covers bodily injuries, property damage, reputational harm and more, is essential. 

Why Music Industry Companies Specifically Need Insurance

The types of music industry companies that should consider general liability insurance include recording studios, instrument retailers, live music venues, and concert promoters. For example, recording studios allow musicians access to expensive, sensitive equipment and face risks like slips or falls on their premises. Instrument retailers have significant inventory that could incur damage.

And concert venues host crowds of people, multiplying accident hazards exponentially. Statistics show the average cost for general liability insurance from The Hartford is $67 per month or $805 per year. Rates vary based on factors like a company’s revenue, number of employees and location. 

Insurance Provides Critical Financial Protection

Whether an injury, property damage or other covered claim, having insurance can save music companies from sudden, substantial expenses. For smaller operations, one severe incident could sadly spell the end of business without financial protection. 

If you’re still unsure on what general liability insurance covers, then it’s good to know that The Hartford have a general liability insurance video that covers this in further detail. This can help you gain more of an insight into this type of insurance, and why you would want it.

Other Music Industry Positions Need Coverage Too

In addition to core music companies, many supporting roles in the industry should carry insurance. Music journalists often travel to various locations for interviews and concerts, facing risks such as car accidents along the way. Similarly, photographers travel to shoots and frequently have high-value equipment that could become damaged.

Independent contractors like touring crew members may fall under a band or company’s policy at times. Yet freelancers usually need their own insurance for full protection. Industry experts advise contractors to obtain products liability insurance as well as errors and omissions coverage. The latter defends against claims of mistakes or failing to perform duties. It takes just one accusation to land in legal turmoil without insurance backing.

Also imperative is securing policies that include music copyright infringement protection for applicable roles. Recording studios, record labels, radio stations, background music companies and more all face risks of copyright claims. Allegations surface often and companies require coverage for defending their name or works.

Compare Providers Annually

Industry experts also advise shopping around at least annually for the best rates. While The Hartford data shows average costs for general liability insurance, amounts vary greatly based on particular business details. Comparing an array of insurers through a reputable agency improves the chances of securing optimal coverage at reasonable pricing. Protecting companies from unpredictable events makes insurance non-negotiable.

With so many risks facing those across the music industry, having continuous insurance coverage is key. Statistics show roughly a third of small business owners have allowed insurance policies to lapse at some point due to factors like high premiums or forgetting renewal dates.

The data and statistics clearly demonstrate why music industry businesses must carry proper insurance policies. From recording studios to live venues to individual contractors, a vast range of operations face risks ranging from property damage to liability claims.