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Insurance

2. Insurance

Anyone working with members of the public - for example running circus classes for kids or performing in a street theatre festival - will need Public Liability Insurance. Check requirements with the relevant local authority.

The following article by Dave Morgan Dip. CII offers detailed, accurate and up-to-date information. For further information, see his contact details at the bottom.

Insurance for Circus Performers

There are four main types of insurance that circus performers need to consider:

• Motor
• Employers' Liability
• Public Liability
• “All Risks”

Motor insurance is widely available, although you should make sure that your motor insurer knows that you will be using your vehicles for business use so that your insurance is not restricted to social, domestic and pleasure purposes only. The other three types of insurance might not be quite so familiar, and are not quite as easy to buy.

Employers' Liability

Employers' Liability insurance covers you if you are sued because as a result of your actions, one of your employees suffers an injury, contracts a disease or dies.

It is important to note that an employee wouldn't receive any compensation from your Employers' Liability insurance unless you were found legally liable for their injury, disease or death. However, your Employers' Liabliity insurance would pay for your legal defence costs if one of your employees sued you even if you weren't legally liable.

Employer' Liability insurance is required by law if you employ people, in the same way that Motor insurance is required by law if you drive a car, van or motorbike. However, working out whether someone working for you is an employee is not easy in the performing arts sector because there are so many freelance people.

Whether a freelance person is a “disguised employee” or is a genuine freelancer depends on a number of factors. It doesn't necessarily follow that someone would not be deemed to be an employee by a court just because they had set up a Limited Company — HM Revenue & Customs introduced something called IR35 to address this loophole. Although IR35 was mainly focussed on the IT sector, it also applies to people in other industries.

IR35 and “disguised employees” are beyond the scope of this article, but if you are in any doubt, you should consult your insurance broker.

Employers' Liability policies tend to be fairly standard in the sense that they all offer pretty much the same level of cover, and they mostly offer an indemnity limit of £10,000,000. Generally, you cannot buy Employers' Liability insurance on its own, and would need to buy it in a package with Public Liability insurance (see below).

Public Liability

Public Liability insurance covers you if you are sued because as a result of your actions, someone other than an employee:

• suffers an injury or dies
• contracts a disease
• loses their property or has it damaged

As with Employers' Liability, it is important to note that you have to be legally liable for the policy to pay out, although again, if someone sues you and you aren't legally liable, your Public Liabliity insurance would pay for your legal defence costs.

Unlike Employers' Liability insurance, Public Liability insurance policies tend to have an excess which means that you would have to pay the first part of any claim. Some insurers apply this excess to legal costs and some don't — it's important to check this when comparing quotes.

Public Liability insurance tends to have lower indemnity limits than Employers' Liability insurance. The standard limit is £1,000,000, although many insurers will offer a limit of £2,000,000, or even £5,000,000.

If you need a higher limit than your insurer is willing to provide, you can buy Excess Layer insurance to top up your limit. You can buy these policies either as a one-off for a specific performance, or you buy them on an annual basis to cover you for everything that you do in a year. It is almost always more cost-effective to buy Excess Layer policies on an annual basis if you think you'll need the higher limit at some point.

Public Liability insurance is not a legal requirement. However, it is effectively compulsory because most venues will insist that you have Public Liability insurance, and will want to see evidence of your insurance before allowing you on site. Most local authorities will insist that you have a £2,000,000 indemnity limit before they will let you onto their property, and a growing number will ask that you show evidence that you have a £5,000,000 indemnity limit.

“All Risks”

“All Risks” insurance covers you in case your property is damaged or stolen. The name “All Risks” is usually written in quote marks because despite the name, the insurance doesn't cover every risk. Most policies will contain one or more exclusions — a common one is loss of property from unattended road vehicles.

Most small circus performers who don't have high value equipment probably don't need to buy “All Risks” insurance. When you take into account the cost of the premium and factor in the cost of the excess that you'd have to pay if you made a claim, you'd probably be better off putting some money into a building society each year and using that pot of money when your equipment is lost or damaged.

Buying Insurance

Many trade associations — such as Equity - run highly competitive insurance schemes. If you are a member of such an association, that's probably the best place to start looking for insurance. If not, your best bet is to speak to a broker rather than trying to buy insurance direct, as insurance for circus performers is not widely available.

Although it can be a good idea to speak to more than one broker to make sure you are getting the best deal, it's not usually a good idea to approach too many brokers. There are only a handful of insurance companies that will quote for people in the circus sector, and those insurers tend to refuse to quote if there are too many brokers involved. As a rule of thumb, three brokers should be considered a maxmimum.

As well as checking what the policy your broker is proposing would cover you for, you should also check who the insurer would be. The security of your insurer is important — you want them to be around if you have to make a claim. You should make sure that your insurer is regulated by the Financial Services Authority (FSA).

About the Author

Dave Morgan Dip. CII is an insurance broker working for Park Insurance Services.

If you have any questions about insurance, please feel free to email him: parkinsurance@morganbishop.co.uk

If you join Equity then you get free Public Liability insurance. www.equity.org.uk

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