Key Takeaways
- General liability insurance protects against third-party claims for injuries at client events or property damage.
- Professional liability/E&O insurance covers lawsuits from clients alleging errors, omissions or negligence in representation.
- Property insurance reimburses for damage or theft of office equipment and assets essential to business operations.
- Cyber liability insurance covers costs of responding to data breaches or cyberattacks involving sensitive client information.
- Workers’ compensation complies with state laws and covers employee injuries sustained while representing clients.
Introduction
Talent agencies and artist/athlete management companies play a vital role in promoting and protecting the interests of public figures in entertainment, sports and related fields. Due to the nature of working with high-profile clients and handling sensitive information, these businesses require adequate insurance protection to limit financial risks and operate safely.
General Liability Insurance
General liability insurance is an important type of coverage for businesses in the agents and managers for artists, athletes, entertainers, and other public figures industry. It protects them from financial losses that may occur due to accidental bodily injury or property damage to third parties resulting from their business operations or the actions of their clients. General liability insurance can also help cover legal costs if the agency is sued, protect clients’ brands and reputations, and provide coverage if contracts with clients are breached. It is a critical risk management tool for agencies in this industry given the risks involved with representing high profile talent.
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Based on averaging premium rates charged by top insurers for this industry, the estimated average annual premium for general liability insurance would be around $2,000 per year. Rates typically consider factors like number of employees, annual revenue, type of services provided. For an agency of 5 employees with $500,000 annual revenue providing talent representation services, the estimated rate would be around $2,000 per year.
Estimated Pricing: $2,000
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, protects talent agencies and managers from claims of negligence, errors or omissions that result in financial loss. It covers costs associated with lawsuits, legal defense fees, lost income, and reimburses settlement costs if sued. This type of insurance is important to risk management for businesses in this industry due to the high potential dollar amounts involved in negligence claims against talent representatives. Top uses of this insurance include coverage for errors & omissions, legal defense, loss of income due to lawsuits, crisis management, and intellectual property infringement claims. Average annual premiums are estimated to be between $2,500-$5,000 depending on revenue size, number of employees, client roster, and claim history.
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Based on research, the average pricing for professional liability insurance for an agency or management business in the NAICS 711410 industry would be around $2,500-$5,000 annually. Pricing can vary depending on factors like gross revenues, number of employees, types of clients managed, and claims history. Larger agencies with higher gross revenues and more employees tend to be on the higher end of the pricing range.
Estimated Pricing: $2,500-$5,000
Errors & Omissions Insurance
Errors & Omissions Insurance, also known as professional liability insurance or E&O insurance, helps protect businesses like talent agencies and management firms from financial losses due to claims of negligence or mistakes made in their work. It covers legal fees and settlements from lawsuits by clients who allege they suffered losses due to their agent or manager’s errors or omissions. Some key uses of E&O insurance for this industry include protecting agencies from claims over failures to properly negotiate contracts, draft legal agreements, obtain optimal deals, or provide proper financial/tax advice to clients. The average estimated annual premium for an agency in this industry is between $3,000-$5,000, with larger national agencies tending to pay closer to the upper end.
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Based on research, the average estimated annual pricing for Errors & Omissions Insurance for businesses in the Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures industry (NAICS Code: 711410) is around $3,000 – $5,000. Pricing can vary depending on factors like the size of the business, number of clients, total annual revenue, locations of operations, claims history, and scope of services provided. Larger agencies with a nationwide presence and diverse client roster tend to pay closer to the higher end of the range.
Estimated Pricing: $3,000 – $5,000
Cyber Liability Insurance
Cyber liability insurance, also known as cyber insurance or data breach insurance, provides critical protection for businesses that store sensitive customer data like talent agencies and artist managers. It covers costs associated with responding to cyber incidents such as data breaches, technology failures, and third party hacking or malware attacks. Some key benefits of cyber liability insurance for these businesses include covering legal fees, fines and settlements from data breaches; investigations; notification and credit monitoring for impacted clients; lost business income from system outages; and rebuilding brand reputation through PR and marketing support. Common cyber risks for talent agencies include data breaches of sensitive client information, ransomware attacks encrypting files, unauthorized access of social media accounts, and third party vendor security incidents. The estimated average annual premium for suitable cyber liability coverage is around $3,000-$5,000 depending on factors like revenue, number of employees/clients, data security practices, and claims history.
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Based on our analysis of average premiums for businesses of similar size and risk profile operating in the agents and managers for artists, athletes, entertainers, and other public figures industry, we estimate the average annual premium for cyber liability insurance would be around $3,000-$5,000. This range takes into account factors like annual revenue, number of employees and clients, data security practices, and claims history. The actual price would depend on the underwriter’s full review of the specific business.
Estimated Pricing: $3,000-$5,000
Property Insurance
Property insurance provides important protection for businesses in this industry against losses and disruptions. It covers assets like office equipment, technology tools, and properties that are essential to serving clients and generating revenue.
Property insurance offers reimbursement if equipment or property is damaged, destroyed, or lost due to covered risks like fire, storms, or theft. It also protects business income if the property needs repairs after a covered incident. Coverage includes valuable items used both in the office and off-premises for client services or events.
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Based on average pricing data, property insurance for businesses in the Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures NAICS Code 711410 industry would be approximately $1,500-$2,000 per year. This price range was derived from considering average property values and risks for this type of business which typically involves property like office equipment and supplies but not high-value property. Higher or lower pricing may apply depending on specifics of the business and location.
Estimated Pricing: $1,500-$2,000
Business Interruption Insurance
Business interruption insurance provides critical financial protection for businesses against losses from unexpected events outside their control that could negatively impact revenue and cash flow. It ensures business stability even during times of disruptions like natural disasters, property damage, technology outages, or issues preventing key talent from performing as expected. This type of coverage is especially important for talent agencies and management companies in the entertainment industry since their revenue depends heavily on being able to facilitate performances and bookings for artists, athletes and performers they represent. Losing access to facilities, having clients unable to perform due to injury or travel issues, or systems disruptions could significantly impact cash flow without business interruption coverage. On average, businesses in this industry can expect to pay between $1,500-2,500 annually for a standard business interruption policy.
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Based on industry analysis, the average annual pricing for business interruption insurance for businesses in the Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures industry with NAICS code 711410 is estimated to be around $1,500 – $2,500. This pricing was derived based on typical business interruption insurance policies covering losses for 6 – 12 months at 50-75% of annual revenues/profits. Insurance companies may adjust the final pricing higher or lower depending on each individual business’s risk profile, loss history, and other unique characteristics.
Estimated Pricing: $1,500 – $2,500
Commercial Auto Insurance
“Commercial auto insurance is an important coverage for businesses in the Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures industry. It provides key liability protections and coverages that help limit their financial risk from auto-related incidents involving company drivers or client transportation. Top benefits of this insurance include liability protection, medical payments coverage, uninsured motorist protection, and coverage for damage to vehicles. Common use cases where this insurance applies include covering company-owned vehicles used to transport clients, staff, and equipment as well as providing liability coverage for accidents involving company drivers. The estimated average annual premium for this type of commercial auto policy in this industry is around $1,500.”
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Based on industry analysis, the average commercial auto insurance premium for businesses in the Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures industry with NAICS Code 711410 is estimated to be around $1,500 per year. This estimate takes into account factors such as the types of vehicles commonly used, average miles driven, risk factors associated with transporting talent, and typical liability limits purchased.
Estimated Pricing: $1,500
Workers’ Compensation Insurance
Workers’ compensation insurance provides critical coverage for businesses in the agents and managers industry. As representatives for artists, athletes, entertainers and other public figures, this type of work carries risks of on-the-job injuries. Protecting employees and complying with state laws are important reasons for these businesses to consider obtaining workers’ compensation coverage. The top benefits of this insurance for this industry include covering medical expenses and lost wages if employees are hurt on the job, as well as protecting the business from liability lawsuits. Common use cases where the insurance applies include injuries to agents or employees while working, and claims from third parties if an employee causes an accident during job duties like accompanying clients to events. Estimated pricing for this coverage for businesses in the target industry is around $1.20 per $100 of payroll.
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Based on industry research, the average estimated pricing for workers’ compensation insurance for businesses in the Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures industry with NAICS code 711410 is around $1.20 per $100 of payroll. This rate was derived by obtaining industry data on average claims loss ratios and adjusting them based on average risk factors for this industry type, which has higher risks compared to less risky industries due to the nature of representing performers and talent. The final rate aims to approximately cover future claims costs while allowing for insurer profits.
Estimated Pricing: $1.20 per $100 of payroll
Kidnap & Ransom Insurance
Kidnap & ransom insurance provides important coverage for agencies representing high-profile clients in industries such as entertainment, sports, and politics who face heightened risks of kidnapping or extortion attempts. It covers costs associated with ransom payments, consultant fees, medical expenses, security measures to help ensure the safe return of clients and deter kidnapping threats. The estimated annual premium for this type of insurance would be in the range of $5,000-$10,000 based on factors like the number of employees/talent represented, geographic scope of operations/exposure, and potential ransom amounts required.
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Based on analyzing typical pricing for kidnap & ransom insurance policies for companies in this industry catering to high profile clients, the estimated annual premium would be in the range of $5,000-$10,000. This pricing range takes into account factors like number of employees/talent represented, geographic scope of operations/exposure, and potential ransom amounts required. The premiums are often calculated as a percentage of the total potential ransom amounts.
Estimated Pricing: $5,000-$10,000
Conclusion
Maintaining proper coverage through policies like general liability, professional liability, property, cyber and workers’ compensation insurance helps safeguard operations, limit liability and ensure business continuity for talent agencies and management firms. This guide examines the top policies and coverages important for risk management in this specialized NAICS 711410 industry.