The growing market
More than 60 million kids participate in youth sports leagues in the United States, according to the National Council of Youth Sports. The Bureau of Economic Analysis counted 1,273 amusement and theme parks nationwide in 2023, a steady increase from the previous year that includes a wide range of establishment sizes. Roughly 80,000 concert and event promotion businesses operated in North America in 2024, a 3.2% increase from 2023, according to IBISWorld, a global industry research marketing firm.
The takeaway? The sports and entertainment market is growing — and so are its risks.
“Meeting the needs of this diverse marketplace continues to evolve,” says Spencer Batt, president of American Specialty. “We help agents with small accounts all the way up to insuring major league sports and large concerts.”
The underwriting challenge
With no two risks looking alike, Tom Willie, CEO of Special Risk Insurance Managers (SRIM) — which covers the sports and entertainment market in Canada — says agents may not always know how to evaluate a risk in this space. That’s where SRIM and American Specialty come in.
“Risks can vary an awful lot, and a broker may not have ever insured an amusement park operator, for example,” Willie says. “They might not know the questions to ask. The applications are helpful, but the context behind the application questions is key. Our team loves being able to work with a broker that’s never seen a certain type of risk and guide them through the steps.”
Agents are also seeing new risks — and new types of coverage requests. “While Canada does not, for the most part, have the same level of severity as in the United States, we are seeing varied requests for coverage by agents that we did not previously see,” Willie adds. “We have the expertise to help agents get the risk placed efficiently.”
The personal-commercial crossover
Many don’t realize the sports and entertainment segment touches both personal and commercial lines, creating opportunities for agents to round out personal lines accounts. “Ask customers if they serve as a volunteer with sports clubs, civic activities or entertainment venues,” Batt says. “Most volunteers don’t pause to consider whether they are at risk of being sued if someone is injured at an event they are planning or supervising.”
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Agents also need to help commercial clients understand that certain coverages, like those for sexual abuse, are very difficult to obtain. In order to get coverage, you need to be prepared to prove to the underwriter why you deserve it. “Think of it like a bank loan,” Batt says. “You don’t just fill out the application and then they give you a $1,000,000 loan. You have to demonstrate you have a plan in place. And that is how our underwriting team approaches it.”
The pressure on sports leagues
Participation in youth and professional sports, day camps and other programs continues to grow. At the same time, a threat to access and participation is the cost of the liability insurance needed to sponsor a sports league or hold an event. This challenge continues to vex insurance agents who are often asked to find solutions that can keep costs affordable, thus keeping league fees reasonable.
“We’re seeing that municipalities and sports venues are requesting higher liability limits,” Batt says. “This presents challenges from both a cost and limits standpoint. It also heightens our value proposition, as we have developed significant underwriting, claims and loss prevention services during the past 30 years to deliver to agents and their customers.”
The alcohol question
The widespread availability of alcohol is also impacting the sports and entertainment market. Batt notes that alcohol can be found almost everywhere — from quick-service restaurants to gas stations, amusement parks, aquariums and sporting events.
“One of the things that has become difficult with so much consumption is that someone might have consumed alcohol at multiple spots throughout the day but can bring all of those places into one claim,” says Batt. “They may have visited your place at 7:00 p.m., left at 9:00 p.m. and the auto accident happened at 1:00 in the morning. We certainly think they consumed beverages in between, but how much? Where were they? These are all questions that become difficult to answer.”
That’s why alcohol awareness training for servers is vital for loss prevention. American Specialty has implemented a process during inspections to validate whether bartender and server training has been completed.
“The other thing we do for alcohol loss control is monitor the business during working hours,” Batt says. “We want to monitor their servers and bartenders to make sure that they’re doing what the insured expects them to be doing, which is to cut people off appropriately and to be able to back up a newer server who gets pressured to serve more alcohol. They need to have someone stepping in to say no.”
The case for proactive risk management
How do all sports and entertainment organizations show they’re managing risk responsibly? Willie says proactive plans should include everything from background checks to training protocols — and clear documentation that they’re actually in place. “It should include the parameters and guidelines they must follow in interacting with the participants and a well-structured system of oversight reporting and follow-up,” Willie says. “Our underwriters consider the types of tournaments they are playing in, the nature of the field trip, or the site where the activity is being held.”
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Batt emphasizes that American Specialty and SRIM don’t view loss control as a “catch”. “We view loss control as a way to help our insureds,” he says. “We’ve already vetted them and believe that they’re trying to do the right thing — so this is about helping them.”
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This material has been prepared for general informational purposes only, is intended to apply generally rather than to any specific company and presumes appropriate discretion will be exercised regarding any particular situation.
