Part I: Policy options

This is the first part of a two-part blog series titled, “Music to my ears: Insurance coverage for musical instruments”. Part II covers exclusions, considerations, filing a claim, and tips.

Musical instruments can cost significant sums running from a few hundred or thousand dollars to a million dollars or more. And that is to say nothing of the special bond musicians have with their instruments (the authors are both amateur musicians, and when the violist even thinks her viola has been bumped while in its case, she feels as though her own person has suffered injury). Professional and amateur musicians, as well as collectors of highly valued or rare instruments, may require or desire insurance to protect their instruments from loss or damage.

Instrument insurance covers the instrument, and usually covers accessories like bows, sheet music, cases, bags, and stands, unless specifically excluded. High-value accessories should be individually listed on the policy.

Musicians may need coverage if the instrument is used routinely for performances or teaching, or if it travels to school, work, lessons, rehearsals, or concerts. Collectors with expensive and rare instruments may want coverage. Professional musicians may need a commercial musical instrument policy (discussed below) to limit the time they spend without their instrument if it needs repair, if they need to rent a temporary instrument while repairs are made or if they need to purchase a new instrument.

Musical instrument coverage can be customized, with policyholders choosing the amount of coverage they need and the amount of the deductible. Musical instrument carriers, which may be specialty insurers, frequently divide instruments into categories, and coverage may also include electronic instruments, recording equipment, and electronic gear.

Some policies have a maximum amount they will insure per instrument. Commercial musical instrument policies provide several valuation options, such as payment for a claim based on an agreed-upon value determined when the policy is placed, the instrument’s value, or its replacement value at the time of loss.

Coverage counsel can assist with placement, review, and renewal for musicians, collectors, and ensembles, and if valuation or coverage disputes arise in the event the unthinkable occurs.

Musical instrument coverage for amateur musicians

Amateur musicians are those who play a musical instrument (or several), but who do not receive compensation for playing the instrument, including people learning to play an instrument, and those who play as a hobby alone or in a group. A musician who makes any income from his or her playing is not an amateur for coverage purposes and may require business insurance.

Some homeowner’s or renter’s policies cover musical instruments, but they are subject to some limitations. Frequently, they contain limits for the home’s total property damage and may have applicable per-item limits or sub-limits for musical instruments, which may be lower than the musical instrument’s value. Many only cover damages occurring while the instrument is in the covered residence. Even when there is off-premises coverage, that amount is limited to 10 percent of the policy’s dwelling coverage limit, which may not cover the loss. Homeowner’s and renter’s policies only cover damage from “named perils” such as fire and theft, but not for unnamed perils. Typically, such policies only provide actual cost value, so it can be difficult to receive compensation for the instrument’s replacement value.

Amateur musicians can obtain extra coverages for specific valuables, like a scheduled personal property endorsement or a floater/rider.

  • Scheduled personal property endorsement

A scheduled personal property endorsement lists a specific valuable item (or more than one specific valuable item) like a musical instrument on the Declarations page. This bypasses the sub-limit for musical instruments in the standard homeowner’s or renter’s policy and covers the musical instrument’s retail or replacement cost value (RCV). These riders are usually “all risk,” covering any event unless it is specifically excluded, providing much broader protection than that under the named perils coverage under the typical homeowner’s or renter’s policy.

  • Floaters/riders for musical instruments

A musical instrument floater (or rider) is a separate policy with unique terms and conditions added to your homeowner’s or renter’s policy’s aggregate coverages. It uses RCV and typically does not have a deductible.

If this is not enough, or if the homeowner’s or renter’s insurance carrier does not offer an endorsement, the musician or collector may need a separate stand-alone policy. These provide much broader coverage, apply to recreational as well as professional use, and are issued by specialty insurance companies. These policies are all-risk, covering destruction by any cause of damage or loss unless otherwise excluded, and should cover the full insured value (RCV as agreed by the insurer) in the event of loss, and full repair costs should be covered if the instrument is damaged.

Commercial insurance policies for professional musicians and amateurs or collectors in need of a stand-alone policy

Professional musicians, including music teachers, are those who hold a job, make a living, or receive monetary compensation for playing a musical instrument. Because professional musicians make an income playing their instrument(s), such instruments are considered business property and are excluded from coverage under homeowner’s or renter’s policies.

Commercial all-risk policies cover destruction by fire, lightning, explosion, water, or natural disasters; damage during transport; theft, robbery, and extortion; vandalism; loss; instrument mix-ups; and carelessness on the owner’s part at concerts and rehearsals. Policies may have optional coverage for embezzlement, fraud, accessories, and canceled events. Coverage may be limited geographically or be worldwide. Policies may offer extensions for borrowed instruments and newly acquired instruments subject to reporting requirements. They may offer coverage for the cost of rentals for a rented or borrowed instrument while the covered instrument is being repaired. Professional Musical Instrument policies may also cover the instrument for damage or loss while it is at a repairer’s or restorer’s premises.

Commercial policies may cover business income to compensate the performer if their instrument is lost, stolen, or damaged and cannot be replaced in time for a paid performance and may also cover extra expenses incurred because of the direct physical loss or damage. These coverages frequently are limited by the Period of Restoration, or the time beginning with the direct physical loss or damage and ending on the date the musical instrument should have been repaired or replaced with reasonable speed and similar quality.

Commercial insurance may also cover things like professional liability for accidental loss or damage while the policyholder uses equipment or instruments, including during lessons, performances, rehearsals, and auditions at the professional’s home or premises or at another venue or public location. It may also cover accidental loss or damage that occurs during loading and unloading of equipment, as well as set-up and tear-down. Commercial insurance may cover contract cancellation caused by a damaged instrument.

Personal accident insurance for professional musicians

Personal accident insurance, which may be included as an endorsement to a commercial policy, covers physical injury suffered by the professional musician while using their instrument or musical equipment. This includes injury occurring during lessons, performances, rehearsals, and auditions and covers loss of limb, sight, or hearing, and disability or death. Professional musicians may also purchase hand insurance to protect from lost business income due to an injury causing temporary or permanent loss of use in the hands.

Musical instrument insurance for traveling professionals

This is also called music tour, touring, music performers, or entertainment insurance. Bands or ensembles may insure their instruments and equipment for the duration of a tour. However, the individual instruments may only be covered while they are being used on behalf of the ensemble, and not if the professional is using the instrument for other purposes.

Touring musicians and those who travel frequently may obtain supplemental transport insurance, which can cover checking an instrument, or shipping instruments or other accessories which may not be covered under typical musical instrument or music tour insurance. The disasters that may befall a checked instrument are described in the song “United Breaks Guitars”.

The policy’s geographic scope must be considered, especially for tours that cross national borders.

Devaluation coverage for professionals, amateurs, and collectors of rare or expensive musical instruments

Devaluation coverage covers loss of value to an instrument in the event of severe damage. This can be important for high-value instruments, particularly for bowed string instruments, as condition is a major determinant of value. Devaluation coverage will pay for the repair plus the difference between the insured value and the diminution in value of the instrument after repair. Devaluation coverage is unique to musical instrument coverage, and the coverage and loss calculation should be clearly explained in the policy.