Insurance Who pays for the cancellation of the Taylor Swift concerts?
Everything was prepared for Taylor Swift’s performance in Vienna, but then the performance had to be cancelled due to an impending terrorist attack
© APA/EVA MANHART / Picture Alliance
Large events such as a Taylor Swift concert are insured. But does the policy also cover terrorism risks? Who covers the costs?
The Ernst Happel Stadium was ready for the rush of 195,000 “Swifties” who wanted to see their superstar Taylor Swift in Vienna this weekend. The cancellation due to a planned attack in front of the stadium put a damper on their plans. But who will cover the costs? Events of this size are almost always insured – including Taylor Swift’s tour, as industry insiders confirm. However, it is unclear whether the policy also covered attacks and terrorist threats. If so, the Insurers will be asked to pay double-digit millions, two insurance industry insiders told Reuters.
“The individual terror policy would apply because there was a potential terror risk,” explains Tim Thornhill from the insurance broker Tysers. A 19-year-old from Lower Austria, who had become radicalized on the Internet, apparently wanted to carry out a suicide attack in front of the stadium on Thursday or Friday, killing as many “unbelievers” as possible.
At major events, several insurers usually share the risk, a large part of which is placed through the London insurance market Lloyd’s. “This is a niche market that is shared by a few providers,” explains an expert in event insurance who did not want to be named.
“Not every artist can be insured”
Standard contracts cover cancellations, postponements, the costs of rescheduling, ticket reimbursement and the artist’s cancellation fee – whether for technical reasons or because of an earthquake. Customers have to pay extra for storms, threats of attacks, cyber attacks, cancellations due to national mourning or the case that the artist cannot perform – and since the coronavirus pandemic also for cancellations due to infectious diseases. The postponement of the Olympic Games cost insurers billions and, according to insiders, temporarily drove the division into the red.
Taylor Swift is actually popular with insurers because she is considered reliable and rarely cancels. “Not every artist is insurable in this regard,” says the expert with a wink. There are usually several separate contracts: one with the organizer of the worldwide tour – in Swift’s case, this is the US giant Live Nation – and a second with the local organizer of the concert. In Vienna, this was Barracuda Music, which has been part of the empire of the German ticket marketer CTS Eventim for five years. Barracuda immediately promised that the disappointed ticket buyers would get their money back within ten days.
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Complete cancellation of the tour would not be insurable
The policies for Taylor Swift are structured in such a way that the insurers would not have to cover the complete cancellation of the “Eras” tour, said Andrew Colcomb of Argenta Private Capital. Tickets for the entire tour are believed to have been sold for almost $2 billion. The losses for the insurers could be limited if the concerts in Vienna were rescheduled, said Marcos Alvarez, who is responsible for the financial sector at the rating agency Morningstar DBRS. “If this remains a one-off event, it should remain within the scope of the insurers’ calculations,” believes Alvarez. Only when such events become more frequent will events no longer be able to be insured against cancellations due to terrorism.
The next Taylor Swift concerts next week – the last five in Europe – will take place at London’s Wembley Stadium if the British police have their way. If they have to provide special security for the event, that would of course be a major challenge, says Rich Phillips from insurance broker Marsh. The security authorities are already on high alert because of the radical riots against Muslims and migrants in Great Britain.
Alexander Hübner, Carolyn Cohn and Noor Zainab Hussain, rtr/kb
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