On August 26, 2020, Sarah Cronin was quoted in Insurance Day regarding the evolving impact of COVID-19 on companies in the sports, entertainment, and media (SEM) sector and their insurers.
With no insurer willing to provide cover in the event of a shutdown related to the pandemic at the moment, policyholders in the SEM sector find themselves under a great deal of pressure, according to Cronin.
"They are faced with policies that are much higher premium and specifically exclude any insurance coverage for a pandemic shutdown," said Cronin, who often works on behalf of policyholders in film and television production. "It's frustrating for businesses to have paid for insurance and then when something unexpected happens, they are told by their insurance company: too bad, we don't cover this."
The sports and entertainment industries are not expecting much support from their insurers at the moment. "Insurers have indicated they don't know how much cover or support they can provide, at any price. They have made it clear they will not accept any more risks than they already have in terms of the pandemic," she added.
While insurers are wary of fully insuring these productions, and are specifically excluding pandemic coverage, a wide range of investors, financial risk specialists, and some insurance brokers are coming into the sector and partnering with the studios and producers to find creative solutions to diversifying the risk. "Investors, bondholders, and production companies are looking for solutions right now. I don't think there is a consensus about one right way to do it. Everyone is trying to figure things out on the fly," said Cronin.