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Research and Briefings

Beyond the Game: Managing the Many Perils in Sports and Entertainment


Millions of loyal fans, tens of thousands of dedicated employees, and many talented athletes and performers visit sports and entertainment venues each year. And while these industries generate millions of dollars in revenue, jobs, and irreplaceable experiences for customers, they can also carry a great deal of risk.

The emerging risks facing the sports, entertainment, and events industries — from weather events and pandemic outbreaks, to data breaches and injured athletes or performers — can have serious implications for organizations’ finances, operations, and reputations. As such, sports, entertainment, and events organizations must carefully take into consideration all available risk management and insurance solutions that can allow them to reduce their total cost of risk.

Emerging Threats

Much of what gives sports and entertainment events their appeal can also make them risky.

For instance, tens or even hundreds of thousands of fans can descend upon a single venue to witness athletes and entertainers showcase their talents — oftentimes in electrifying performances with palpable intensity or drama. Cast in a different light, however, those same events could also be portrayed as the perfect storm of crowds, confined spaces, and potential security breaches. And it’s easy to see how any sports, entertainment, or events organizations could be upended by a multitude of emerging risks, including:

  • Pandemic outbreaks
  • Terrorism and violence
  • Technology advances
  • Employment practices liability
  • Injuries and illness among talent
  • Weather

No matter the emerging trend, almost all the risks above ultimately translate into costly financial, operational, or reputational damages, and call for new and diverse solutions.

Managing Your Risk

Clearly, sports, entertainment, and events industries face a broad spectrum of risks. Organizations within these industries that can stay ahead of emerging threats will thrive and gain competitive advantages in both prosperous and less favorable economic conditions. And fortunately, tools, processes, and support exist to help identify, quantify, and manage critical risks.

For one, data analysis should be a major area of focus. Organizations can invest in risk management technology or work with service providers that offer analytics tools to leverage extensive claims, exposure, and placement data pertinent to their industries, business size, geography, and products. They can further supplement data collection and analysis with a cross-functional risk committee to further strategic discussions about emerging trends.

Having sound data and a broad perspective on risk from stakeholders across the organization is critical for mapping exposures and effectively engaging in enterprise risk management (ERM). An ERM approach can facilitate better capital resource allocation decisions, increase operational efficiency, and enhance risk control efforts.

For instance, quality risk information and ERM practices might more readily highlight a heightened risk for violence at a specific stadium, concert venue, or event, as well as any gaps in security detail or crisis response plans. Of late, many organizations are revamping their security policies and procedures to focus on staff training, extend the area of coverage controlled by security from event confines to parking lots and beyond, and introduce more intensive bag checks and visitor screening. An ERM approach can also help to shine a spotlight on organizational gaps in cyber risk management — for example, the need to move cyber risk out of the hands of IT and elevate it to an enterprise risk, capture and quantify all vendor or third party cyber risk, and quantify cyber risk in economic terms in order to optimize investments and maximize returns on them.

But the role of comprehensive risk data and ERM doesn’t stop there. Not only can it highlight opportunities to improve risk management practices and procedures, it can also expose gaps in insurance coverage. Traditional and emerging insurance products that can respond to the myriad risks facing sports, entertainment, and events organizations include:

  • Supplemental parametric insurance policies that are triggered by specific predetermined conditions being met — like wind reaching a certain speed or public sentiment about a infectious disease hitting a certain level — rather than being triggered by direct losses.
  • Workers’ compensation, property, business interruption, and contract frustration insurance policies that may respond if an insured is directly affected by infectious disease outbreaks.
  • Participant accident coverage that can cover medical expenses, as well as death and disability in some instances, if an athlete is injured on the job.
  • Cancellation and contingency insurance, which may cover situations such as the cancellation of major sporting events, non-appearance of entertainers, prize indemnity, and/or contract bonuses.

Engaging the best insurers to obtain the right coverage for the right risk at an optimal price might seem unattainable. However, with guidance from advisors with dedicated knowledge of the sports and entertainment industries, organizations can better understand which insurers can deliver the appropriate scope of coverage for their unique risks, anticipate underwriters’ demands and concerns, and assess whether broader, flexible, or blended coverage is needed.

While the risks to the sports, entertainment, and events industries are numerous, so are the options for addressing these perils. This means organizations have ample opportunity to overcome today’s challenges and thrive in even the most complex risk environments.