The eSports industry is relatively young, and there are many risks for eSports professionals. eSports insurance offers financial protection from claims of liability, property damage, lost income, and other risks that could affect your business’ bottom line. MFE Insurance takes pride in protecting eSports professionals with customized policies tailored specifically for their specific risks.
The Unique & Inherent Risks The eSports Industry Faces
The eSports industry is highly profitable and continues to grow. In fact, the industry is on track to surpass $1 billion this year, and it is expected to grow to $1.8 billion in 2022.
As the industry continues to grow, the increase in risks grow along with it. The eSports industry has risks that are unique and not found as commonly in other industries. Some of the biggest risks that the eSports industry faces include but are not limited to:
Most of the systems used for eSports require online data and gaming. This leaves competitors, event organizers, etc. at risk of data breaches and other forms of cyber attacks.
It is estimated that as much as 41 percent of eSports players are women. However, only a small portion are professional. This is just one example of areas that leave eSports professionals at risk of discrimination lawsuits.
eSports events can get competitive, leaving the risk of physical altercations if a competition was to become overly competitive.
From gaming consoles to expensive headphones and camera systems, there are many forms of property involved with the eSports industry.
Event organizers are at risk of cancelled events due to a variety of reasons, such as weather, players that cancel, etc.
Mental Health Issues
Studies are continually conducted on whether or not there is a correlation of mental health and gaming.
Any industry that is relatively young is at risk of fraud from employees, competitors, etc.
There are many additional risks as well depending on the type of business you have within the eSports industry. It is important to identify the specific risks related to your business.
The Different Types Of eSports Insurance Policies
Every policy with MFE Insurance is personalized according to your specific needs and goals. Several policies we offer for our eSports clients are general liability, cyber liability, employment practices liability, event liability and property insurance. Other policies are available as well, according to your specific insurance needs.
General liability insurance covers claims of bodily injury or property damage. This primarily protects against third-party claims, which are claims made by someone outside of your business. There are many costs associated with third-party claims in the eSports industry. A policy with MFE Insurance can cover much of the legal fees associated with the claims, along with settlement payments, damage repairs, property replacement, and medical costs.
For example, if you were to host an eSports event and someone were to slip and fall on a wet floor at your venue, then you could be liable for a lawsuit from the third party that your general liability insurance policy covers.
Cyber crimes are one of the biggest concerns among eSports businesses and professionals. This insurance policy protects you financially in the event a third-party claim was made that information was mismanaged. It can also protect in the event there is a data breach in which your stored online information was stolen.
For example, if you are a tournament organizer and have the names and information of all players that have signed up for your event sored online, then this information may be vulnerable to a data breach, in which case the information could end up in the wrong hands. Cyber liability insurance with MFE can cover legal costs, lost income, and costs associated with restoring your online system after the breach occurs.
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) protects you financially if allegations are made against you by your employees. This protects you from claims of discrimination, breach of contract, wrongful termination, and much more. Our policy at MFE provides wage and hour coverage for legal defense costs related to allegations made against you or your company by employees.
For example, if you own an eSports team, then one of your former players may claim that you did not bring them back for another season due to discrimination against their race, sex, religion, or other factor. This could lead to a legal battle that may involve attorney fees, settlement costs, and more.
Property insurance protects your physical property, such as your computers, gaming consoles, and more. Property insurance protects your physical place of business if any damage were to occur as well. A policy with MFE insurance can cover necessary repair and replacement costs, financial losses due to lost income while repairs are made, and more.
For example, if you are an eSports professional and have expensive gaming systems, computers, etc. that you want to protect, then MFE Insurance can customize your property insurance policy to help ensure you do not suffer financially when something were to occur to your property, resulting in lost wages while your systems are down as well as necessary repair and replacement costs.
Event Liability Insurance
Event liability insurance protects event organizers from financial losses when unexpected setbacks occur. An event may be shut down due to circumstances outside of your control, or your event may be vulnerable to lawsuits, property damage, etc. Event liability also protects against event cancellation as well.
For example, if you are an event organizer and your event is shut down due to reasons outside of your control, then MFE Insurance can offer financial protection from lost income related to the canceled event.
Media liability coverage is a subset of errors & omissions insurance, specifically designed for commentators, broadcasters, social media teams and other on- or off-air personalities. This form of coverage protects organizations from claims made due to defamation, breach of confidentiality, plagiarism, invasion of privacy and other comments that may result in damages.
For example, if a broadcaster were to reveal confidential information about a team or upcoming event hosted by another company, MFE Insurance can offer financial protection from breach of confidentiality against the organization the broadcaster belongs to.
Directors & Officers Liability
Directors & officers liability, as it applies to the eSports industry, covers individuals and organizations against claims made by third parties. This can result from several circumstances, such as an event not being as profitable for a venue as the organizer claimed it would be, or even an investor was promised a return that they did not receive from an event.
For example, if an organization claimed their eSports team would generate $2 million in revenue for the venue if they allowed them to participate there, and they did not generate any amount near that goal, D&O would protect them for any lawsuits made over the false promise.
In the world of electronics, specifically in the eSports industry, equipment breaks or ages into disrepair all the time. Proper equipment breakdown coverage will ensure your team or organization will not lose any money due to controllers, consoles, or other electronic equipment breaking down after a long period of intended use.
For example, if a competitor’s monitor or a PA speaker were to stop working permanently during a tournament, equipment breakdown coverage would reimburse for the monetary amount of the device that broke and could not be fixed.
Workers compensation provides a range of coverages for teams and organizations alike. Whether a team member begins to suffer injuries such as carpal tunnel or clots from prolonged use of a computer, or an event organizer becomes hurt at a competition due to faulty staging or equipment, workers compensation will ensure they are covered in terms of medical treatment costs.
For example, if a cameraman were to slip or fall while recording part of an event and were to injure themselves, workers compensation would cover the injured employee’s medical expenses since the incident happened while they were on the job.
Sports companies travel more than one would think — not only do competitors drive from tournament to tournament, but organizers also carry equipment through large trucks and other vehicles. While commercial auto covers damages to the vehicles in an accident, a related coverage known as inland marine insurance can be paired with commercial auto to protect assets that may become damaged while in transit.
For example, if your eSports team were traveling to an event via a bus or coach owned by the company and it was struck by another vehicle, commercial auto insurance would cover the costs of the damage inflicted upon the vehicle. If a device or console were to break due to the accident, it would be covered through inland marine insurance.
Also known as commercial umbrella insurance, excess liability covers damages and expenses that range far beyond the coverage limit of a general liability policy. Essentially, it acts as a safety net in case your organization were met with a situation, such as the accidental death of a guest at an event, would cause you to pay the different out-of-pocket once your general liability coverage met its limit. With excess liability, you would not have to worry about paying the difference.
For example, if a third party were to sue your eSports organization for an amount that exceeds the coverage limit of a general liability insurance plan, excess liability insurance would pick up the remaining coverage amount that the general liability policy could not.
The Types of Organizations That Can Benefit From eSports Insurance
Every organization or professional within the eSports industry should consider their need for eSports insurance and how a policy can benefit them financially by mitigating the risk of financial loss. This includes but is not limited to eSports teams and professionals, tournament organizers, game developers, system and console developers, sponsors, and media personalities such as vloggers and social media influencers.
eSports teams need protection the same way as athletic and academic teams require financial protection. In fact, eSports teams often have a higher level of risk due to the growing industry, the implementation of restrictions, and the expensive costs associated with the equipment and hiring eSports professionals. At MFE Insurance, we protect eSports organizations and teams from financial loss due to lawsuits from third-parties and team members, cyber crimes, and more.
Tournament organizers have risks that are unique to them in the eSports industry, such as substantial loss of income due to cancelled events that are outside of their control. MFE Insurance protects tournament organizers from all kinds of financial risks, including but not limited to:
- Third-party lawsuits
- eSports competitor or team lawsuits
- Event cancellation
- Cyber crimes
- Property damage
Much of the risk can be mitigated with a comprehensive and personalized insurance policy with MFE Insurance.
Game developers have various risks specific to them, such as cyber breaches, equipment breakdown, crime insurance, and lawsuits from employees. They also have a high level of costs in many cases as well, so protection from lost income, lawsuits, cyber breaches, property damage, and more is essential. MFE Insurance works with game developers to offer the insurance coverage necessary to avoid substantial financial loss that could potentially hinder your development company’s growth.
System and console developers are unique in the sense that much of their income is derived from only a few products. If any malfunctions were to occur with the development of the systems, then lawsuits could occur. System developers are also at risk of data breaches as well, especially if they offer online gaming. MFE Insurance protects system and console developers financially according to the unique risks they have within the eSports industry.
eSports companies professionals, teams, and events present great sponsorship and advertising opportunities. However, sponsors, as well as those that they sponsor, have risks of lawsuits related to contract disputes, discrimination, etc. They may also be at risk of falling victim to cyber crimes and a loss of income as well. MFE Insurance offers policies for businesses that work with sponsors within the eSports industry.
Vloggers & Influencers
eSports has continually grown as the rise of influencers from social media sites such as TikTok and Youtube have grown. Influencers and vloggers that primarily post content related to eSports insurance should also consider how a policy can benefit them. MFE Insurance protects influencers from financial obstacles related to lawsuits, lost wages, cyber crimes, and more.
The Importance Of Being Properly Insured In The eSports Industry
An eSports insurance policy can mitigate the aforementioned risks by covering the costs associated with them, such as lawyer fees for battling lawsuits, settlement costs, lost income and wages due to canceled events, repair and replacement costs for damaged property, and more.
Many of these concerns could lead to potentially crippling costs without an insurance policy as the individual is left to pay the associated costs out of pocket. eSports insurance with MFE Insurance handles much of the costs for you, providing peace of mind and allowing you to focus on your business operations.
Get In Touch With MFE Insurance For eSports Insurance Policy Information
MFE Insurance offers personalized eSports insurance policies to meet your precise needs. If you would like to learn more about eSports insurance with MFE Insurance or are ready to begin your personalized policy, give our team a call at 213.266.7990 or contact our team online to schedule a consultation and get started today.