TMN Ask A Lawyer: Insurance
TMN Ask A Lawyeris a semi-regular column where our readers receive expert legal advice from renowned entertainment lawyer Brett Oaten.
Q:My band is going on tour and we're playing a warehouse party, do we need insurance?
A: Except in very limited circumstances, you never NEED insurance. The question is whether you WANT insurance and this really comes down to the level of risk you are prepared to take in conducting your career. In fact, these issues and these questions relate to all other aspects of your life, not just your musical career.
You will only generally need to have insurance when you are required to do so, by a contract or by the general law. For example, the owner of the warehouse might say that you can’t play the warehouse party unless you can show that you have public liability insurance. Of course, you are not entitled to drive a car unless you have the appropriate insurance in place. Generally, a bank won’t allow you to borrow to buy a house, unless you insure the house. These are examples of when you HAVE to have insurance.
Where there are no such requirements, you can make your own decision whether or not to have insurance, and that’s all about risk. If a speaker or some other equipment falls on one of your fans at the warehouse party and they are injured, they may well sue you. If you have insurance, your insurer will not only take over the defence of that claim, but will cover you for the amount you ultimately have to pay the injured person.
If you don’t have insurance, you will be responsible for any payments due to the injured person, if it can be shown that the person was injured due to your fault or your negligence. This could be very expensive for you. If you have significant personal assets (like a house) those assets could be lost due to such a claim. It’s serious stuff. However, perhaps your attitude is, “I don’t want to pay the premiums, and I will never have a problem”, and maybe you’ll be right. If you are wrong, though, it could be a very expensive, and even a career-ending, problem for you.
So, if you don’t have to have insurance, you need to work out how comfortable you are with the risks that you face and whether this leads you to buy insurance, or save the premiums, and take your chances.
You could also put yourself in a better position by, for example, setting up a company, or taking other steps, but those are issues for another day.
Oaten established his legal practice during the grunge era, and specialises in music and other entertainment matters. In the music industry Oaten principally represents artists and some current clients include 360, Angus & Julia Stone, Empire Of The Sun, Lorde, and Troye Sivan. Oaten is also a founding board member and life member of FBi Radio.