Game Republic Affiliate GG Insurance has kindly provided a useful one-pager on all the kinds of insurances studios can consider to reduce their risks. Feel free to print out this handy guide. Many thanks to Phil Wildman and their team for providing such a good outline summary of emerging risks, types of cover, what to watch to save money and to ensure you are adequately covered.
Emerging Risks For 2024
Artificial Intelligence
Copyright issues around media generation, but also potential data privacy and contract breaches.
COPPA – Children’s Online Privacy Protection Act
Video game companies, even those not based in California, should pay attention to these regulations because they apply to any business that serves California
residents. Non-compliance can lead to hefty fines.
What should I prioritise?
Generally Professional Indemnity is a good starting point and build from there.
Where to get it from?
Ideally a broker or insurer that has some experience in the sector, so they can give proper support and advice on an ongoing basis. Insurance shouldn’t just be a bit of paper that sits in a drawer, but a proactive step you take as a business to prevent a “business-killer” situation.
Tip!! Watch out for policies that are sold as “worldwide cover” as this might only be referring to the territorial limit, if you were sued in a US court, without a Jurisdictional limit that includes USA/Canada, you wouldn’t be covered. This generally costs extra but is definitely worth checking if you have that exposure!
When to get it?
We suggest engaging with insurers early, even just so you can become aware of your potential risks that you may not have considered. But then only buy it if you are comfortable with the cost.
How much does it cost?
This could be as little as £500 to over £100k per year. It depends on the risk to insurers and the size of your company.
Do I need to get it?
If you are legally or contractually obligated to get it, then yes. But remember insurance is not there to shield you from a problem, it’s a safety net.
Types of insurance
Professional Indemnity, aka Errors & Omissions (E&O)
Covers Breach of contracts and associated legal costs, copyright, trademark and cyber liability. Many of your key B2B liabilities.
Cyber Insurance
1st party cyber = your direct losses
3rd party cyber = your liability to other companies (often included in PI/E&O)
Intellectual Property Insurance
Covers Copyright, Trademarks, Patents & Trade Secrets.
Plus, issues around chain-of-title.
General Liability Insurance
Generally focused on liability to the public and injuries. Relevant for VR, AR, fitness games and events, but a common
contractual requirement.
Directors & Officers
Covers the personal liability of senior people.
Key Person
Cover the business losses in the event of a key person being incapacitated. For example, a project is delayed.
Mergers & Acquisitions
Insurance to bridge the uncertainty gap in transactions.
Contingency
When you are aware of a potential problem (usually therefore uninsurable) but nothing has actually happened yet.
Performance Bonds
Insurance on the guaranteed delivery of a project
Equipment Cover
Dev Kits, MoCap, Film Equipment etc, is often not adequately covered by traditional contents insurance. Check you have adequate cover if you have specialised kit…
What makes it “Game” Insurance?
Most insurers do not understand the industry and therefore will not offer cover to games companies or (even worse) do not understand it and sell useless policies. So while the insurance products available are well established, the key is making sure that the insurers are aware of your activities, are happy and on-board with what you are doing as a business, and the underlying coverage and policy wording are appropriate for your activities.
Tip…! Multi Company Structures: If you have a group structure, you can often simply insure the holding company, and then all subsidiaries are also covered. This can potentially save a lot of hassle (and cost!)
Limits
Territorial Limits = Where you can work
Jurisdictional Limits = Where you can be sued
Watch out for policies that are sold as “worldwide cover” as this might only be referring to the territorial limit, if you were sued in a US court, without a Jurisdictional limit that includes USA/Canada, you wouldn’t be covered. This generally costs extra but is definitely worth checking if you have that exposure! Especially with new COPPA regs.
What about Claims?
Talk to your insurer/broker as soon as something happens. Even if it is still very early. They can guide you through the process and may help you mitigate the loss (it’s in the insurers interest to go into damage control). If you leave it too late or try and deal with it all yourself and come to insurers after-the-fact you may get a worse result.
Always be transparent with issues too. If you are taking out a new policy, tell insurers if there is anything you are concerned with. If it turns out you knew about a problem beforehand and didn’t declare it and tried to claim later, you can’t expect an insurer to then cover an issue you withheld from them.
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