How to Avoid Underinsurance in the AV Industry
The audio visual (AV) industry relies on cutting-edge technology, high-value equipment and tight project deadlines. Whether you’re an AV hire company, production house or freelance event technician, having the right insurance in place is essential to protect your business and its assets.
However, many AV professionals unintentionally fall into the trap of underinsurance - leaving them exposed to significant financial risk if equipment is lost, stolen or damaged.
Learn more about Audio Visual Insurance.
What is Underinsurance?
Underinsurance occurs when your insurance doesn’t provide enough cover to fully replace or repair your equipment or cover the costs of business disruption. This isn’t the same as being completely uninsured — you do have cover, but it falls short when you need it most.
The result? If you make a claim, the payout may only cover part of your loss, leaving your business to absorb the rest. In some cases, insurers may even reduce the amount paid across all claims if they find your overall level of cover was significantly too low—a process known as the ‘average clause’.
What Happens if You Are Underinsured?
If your equipment is lost, damaged or stolen, and your insurance doesn’t reflect its full value, you’ll need to cover the shortfall yourself. For AV professionals working with high-value kit, this could be financially devastating - especially when replacing specialist equipment at today’s prices.
Underinsurance can also impact your business continuity. If you can’t replace vital equipment quickly, missed deadlines, cancelled contracts, and reputational damage could follow. In the worst cases, insurers may even void a policy if they believe underinsurance was deliberate or the result of negligence.
Why Underinsurance is a Risk for AV Professionals
The nature of Audio Visual work - where equipment is frequently moved, rented and used in high-pressure environments - means AV businesses are particularly vulnerable to underinsurance.
Here’s where those risks can often arise:
1. Outdated Equipment Valuations
AV kit such as cameras, projectors, mixing desks and LED screens can quickly become more expensive to replace as technology advances. Many businesses insure equipment at its original purchase price rather than its current replacement cost, creating a dangerous gap.
2. Business Interruption Losses
If essential equipment is stolen or damaged before a major event, the cost isn’t limited to replacing the gear. Lost income from cancelled bookings and missed deadlines can significantly exceed the cost of the equipment itself. Without the right business interruption cover, these losses are often uninsured.
3. Rented and Mobile Equipment
AV professionals regularly hire in specialist equipment or transport their own gear between venues. Many standard insurance policies don’t automatically cover rented kit or equipment in transit, leaving you exposed to potential losses when working at events.
4. Liability Exposures at Live Events
The risks extend beyond equipment itself. If a lighting rig collapses or a speaker tower falls, causing injury or property damage, you could face substantial legal and compensation costs. Without the right Public Liability insurance, these incidents could threaten the future of your business.
Six Ways to Avoid Underinsurance in the AV Industry
Avoiding underinsurance as an AV professional doesn’t need to be complicated. Below are some practical steps to follow to ensure your cover more accurately reflects the risks you face:
1. Regularly Revalue Your Equipment
Carry out regular audits to make sure your insurance reflects the true replacement cost of all your gear. Bear in mind that equipment purchased several years ago may cost significantly more to replace today.
2. Choose Specialist AV Insurance
Generic business policies often fail to account for the specific risks of the AV industry. Working with an insurance provider experienced in the AV sector, like Mode Insurance, can help to ensure all your risks are covered.
3. Include Business Interruption Cover
Consider business interruption insurance to protect your income if equipment loss or damage prevents you from fulfilling contracts. Make sure your policy covers lost income, cancellation penalties, and additional costs to keep your projects on track.
4. Cover Hired and Mobile Equipment
If you regularly hire kit or transport equipment between venues, ensure your policy explicitly covers rented items and equipment in transit. Standard policies don’t always extend to these situations.
5. Review Your Policy at Least Annually
Your business changes over time, and so do your risks. Make insurance reviews part of your business routine, especially after purchasing new equipment, expanding your services or taking on larger projects.
6. Understand Policy Limits and Exclusions
Every policy is different, so always check the fine print. Make sure you understand what’s covered, what’s excluded, and whether there are limits on specific types of equipment, locations or scenarios.
Don’t Leave Your AV Business Exposed
Underinsurance is an avoidable risk, but it’s one that can have serious consequences if overlooked. Taking the time to ensure your cover fully reflects your business, your equipment and the way you work could save you thousands of pounds and protect your reputation in the event of a loss.
At Mode Insurance, we specialise in protecting creative and AV professionals, helping you get the right cover for your projects, equipment and business needs. If you’d like to review your existing policy or get expert advice tailored to the AV industry, get in touch with our team today or get a free online quote:
Any views or opinions expressed above are for guidance only and are expressed in generic terms. They are not intended as a substitute for readers taking appropriate professional advice relevant to individual circumstances.
Written by
Richa Patel
Digital Marketing Exec
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