Cinema Insurance

Cinema is the clearest example in leisure of business interruption mattering more than property damage.

The physical loss of a projector is a repair or a replacement. The commercial loss is a screen that cannot show anything, for as long as it takes to get a replacement specified, delivered, installed and calibrated, with a technician who is in demand. On a single screen venue the whole revenue stops; on a multi-screen venue a dark room still removes a meaningful share of capacity at exactly the time a release was driving footfall.

So two numbers deserve more attention than they usually get. The indemnity period, which should be set against real lead times for specialist projection equipment rather than the standard twelve months. And whether equipment breakdown is included, because an electronic failure is not damage by an insured peril and is a far more likely cause of a dark screen than a fire.

Public liability in a cinema has a specific shape, and it comes from the one thing the business cannot change.

People arrive late, move along a stepped row in near darkness, carry drinks and food, and leave in a hurry when the credits roll. Trips and falls on steps are the characteristic claim, and the defence is almost entirely about whether the environment was maintained: step edges marked and visible, aisle lighting working, handrails present and secure, spillages cleaned between screenings, and a record that someone checked.

That record is what decides contested claims. A venue that can produce a cleaning and inspection log between screenings is in a materially better position than one relying on a recollection that the aisle was fine. It is a small operational habit with a direct insurance consequence.

Most cinemas now earn a significant share of revenue from food and drink, and many hold a premises licence, which has quietly turned a screening venue into a hospitality business.

That brings licensing conditions, alcohol service to a crowd in a dark room, hot food and the cooking that goes with it, stock with a theft profile, and the possibility of losing a licence. It also changes the claims experience: glass, spillages and alcohol related incidents are hospitality claims rather than cinema ones, and an insurer rating the venue as a cinema alone has not priced them.

Declare it properly, including the proportion of turnover from food and drink, whether hot food is cooked on site, and the licensed hours. A venue describing itself as a cinema with a small bar, which actually takes a third of its money from a licensed operation running later than the last film, has underdescribed itself.

Outdoor, rooftop and pop-up cinema has grown quickly and it is a genuinely different risk from a fixed auditorium.

There is weather, which can both cancel the event and damage equipment. There are temporary structures, inflatable screens and a crowd in a space not designed for one, with crowd management, egress and lighting to arrange from scratch. There is equipment outdoors, at night, often unattended before and after. And there may be a public space, a licence for the event and a local authority with conditions.

A policy written around a fixed venue will frequently not extend to it, or will do so with restrictions. Where outdoor screenings are part of the business, declare them as a separate activity with the number of events, typical attendance and whether you own or hire the equipment, because that is what an insurer needs to price it rather than exclude it.

This venue is two risks at once and policies tend to price one of them. We are an FCA regulated broker and will not tell you we are the best choice. These are the questions that decide it.