Electronic sports, or eSports, is one of the fastest-growing industries right now. Competitive video gaming, whether it is online or at in-person events, has attracted an enormous fan base around the world, with millions of spectators tuning in to events and billions of dollars in global revenue for the industry.
It is an exciting time to be part of this world, but the many rapid changes in the industry can pose significant risks. Insurers are offering increasingly sophisticated eSport policies aimed at providing maximum protection to players, teams and sponsors. What are the most important coverages an eSport policy should have right now?
Cyber Insurance
As a digitally based industry, eSports are highly vulnerable to internet-related risks such as outages and cybercrimes. The high amounts of money and attention that eSports attract make them a target of cyber criminals who are looking to access sensitive information they can exploit, such as credit card or social security numbers.
Although many eSports teams implement cutting-edge security measures, it is not possible to prevent every type of breach. Whether it is cyber extortion, malware, denial of service attacks, ransomware, phishing, or physical manipulation, the potential for financial harm is significant. All parties operating within the eSport industry need to ensure they have comprehensive cyber insurance that accounts for potentially devastating attacks. A good cyber policy will also cover the expenses involved in data breaches, including notification costs, penalties, defense and credit monitoring.
General Liability Insurance
An important type of insurance for all types of businesses to have, general liability is useful in cases involving damage to another party’s property, such as cases where equipment causes damage to someone else’s property or causes an individual to trip and become injured. It also offers protection against claims for advertising or reputational injury.
Property Insurance
eSport players and teams need protection for their property, such as computers, controllers, and consoles. This is particularly important when playing away from home, where a poorly secured event or hotel could put gaming hardware at risk of theft that could render the team unable to participate in the event. Property insurance can offer valuable protection should a team’s possessions be compromised, covering everything from theft to losses after a major storm or other disaster.
Disability Insurance
Competitive gamers have the same risks of experiencing career-threatening injuries as other types of athletes. Issues such as carpal tunnel syndrome, trigger finger, tennis elbow tendinopathy and other repetitive-motion injuries can render a player unable to perform competitively, putting their earning potential in jeopardy. Short-term and long-term disability policies can help to secure their income in the event that illness or injury prevents them from working or competing at specific events.
Event Cancellation Insurance
Event cancellation insurance is an important type of coverage for event organizers. When an eSport event encounters an unexpected snag that means the event can no longer be held for reasons beyond the organizer’s control, it can cover expenses related to reputational damage, financial losses, venue costs, ticket sales and unexpectedly low attendee numbers.
Equipment Breakdown
An equipment breakdown component offers coverage in the event that vital equipment breaks down. This will ensure an eSports team or organization does not lose money as the result of a broken controller, console, speaker or other type of electronic equipment.
Directors And Officers Insurance
eSports teams often have a board of directors or another type of controlling body backing them. Competitive leagues and tournaments with management structures are at risk of a broad range of lawsuits, and this type of coverage protects members of the organization from claims that arise related to the actions or decisions they have taken while conducting business.
Employment Practices Liability Insurance
Another important type of coverage for teams and leagues, employment practices liability insurance offers protection for lawsuits related to the contracts signed by eSports players. It may cover issues such as wrongful termination, discrimination and breach of contract.
Event Liability Insurance
Events such as competitions are at the heart of the eSport industry, and there is a significant amount of money at stake. According to the 2019 Free Global Esports Market Report, the total revenue that year across merchandise, tickets, game publisher fees, media rights, sponsorship and advertising was more than $1 billion(1).
This underscores the importance of ensuring eSports events run smoothly. At eSports events, risks range from damage to the venue while moving gaming equipment to injuries sustained by guests who are attending the event. Many venues have liability insurance in place to cover themselves, but there are still situations for which the event’s organizers will be held liable.
Get In Touch With The eSports Insurance Professionals
MFE Insurance Brokerage is experienced in providing eSports players, teams, event organizers and sponsors with coverage tailored to the unique risks they face. Reach out today to learn more about how our specialists can customize an insurance package to fit your budget while offering maximum protection.