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A key part of insuring a esports Business correctly is understanding the risks to the business is very different to say a computer programmer or IT project manager. The risk is a split between design and performance of the IT component and the effectiveness of the end solution to perform as it is expected by the end user to do. The insurance companies even most in the insurance broking world are still failing to understand and adequately manage the risks of esports.
Esports insurance risk predominately sits with five key coverage’s.
Civil Liability risk which is addressed with professional indemnity insurance. The key attribute to getting this right is the broker arranging the cover understanding your business and tailoring the standard insuring clauses to pick up your business not just the design component of the system. Other things to consider are if you have USA exposures often excluded by Australian wordings unless negotiated back in by your broker.
Public and Products Liability: This level of risk may be very low or very high depending on the end use of your product and service is.
Cyber Liability is the risk to the data you hold and collect about the users. Cyber insurance can insure alot of the risk you have to Cyber attacks.
Management Liability is the fourth key coverage which is good to have in place from the start particularly if you have multiple stakeholders involved in the business now or in the future. This coverage is one of the few that gives both Director cover and Entity coverage from Wrongful Acts of managing the business.
Esports IP Insurance
Exposures and Legal Risks
Esports is revolutionizing the sports and gaming industry across the
world. It’s creating opportunities for a whole host of businesses and
individuals, but with seemingly endless new prospects also comes
a fair amount of risk and exposure. We’ve highlighted the key areas
below to look out for.
Advertising and merchandise opportunities must
comply with endorsement regulations. Any brand,
product, software or item with IP rights (including
copyrights, trademarks, patents and licensing
agreements) will need protecting.
Contracts should be put in place for platforms and
broadcasters for online streaming rights, as well as
sponsorship agreements, as these can be broken
without contractual obligations.
Most players and teams will hold eSports contracts, but it’s
undecided whether these trigger employment relationships
or work visas.
There are many governing bodies and this landscape will
grow and shift as the industry develops. Each governing
body will have its own rules and framework in place that will
be implemented over time
Brands, advertising, sponsors
Influencers play to boost their personal profile without any intention
of becoming a professional esports player. They actively use product
placements and promote brands through their social media handles.
Players and teams
Players can earn money individually as well as in teams, but
they can increase this income via prize money, playing in
multiple teams and leagues, streaming, advertising revenue,
individual sponsorships, as an influencer, fan donation and
Game developers and publishers
Publishers can create and control all IP for their games. They license their
games to external league organizers and streaming platforms who must
get their approval on hosting the competitions, broadcasting the streams
and playing the games
Platforms will offer live streaming and video on demand
(VOD). They sponsor teams, players and competitions with
the aim to obtain exclusive broadcast rights.
Tournament and league
There are three types: directly run leagues, third-party
run leagues, licensed / unlicensed leagues. All leagues
require appropriate licensing in order to stream, host and
play. There are a plethora of unlicensed leagues, which is
expected in any new industry until governing bodies set
guidelines and standardization.
Third-party organisers are reliant on permissions / licenses
from the publishers to broadcast their game – income is
earned via media rights fees, sponsorships, concessions and
Directors’ & Officers’ Liability
Employment Practices Liability
Intellectual Property Insurance
Statutory Liability & Supplementary Legal Costs
Product Errors & Omissions
Legal Expenses Coverage
Public and Products Liability
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