Esports—short for ‘electronic sports’—have officially gone global. The 2024 Esports World Cup in Saudi Arabia featured a record-breaking $60 million prize pool, and with 3 billion gamers worldwide, the industry is set to reach nearly $6 billion by 2030.
It’s clear the industry is soaring to new heights. But while esports might look like it’s all fun and games, it’s crucial to remember the risks shouldn’t be played with. From cyber attacks to intellectual property (IP) infringement, today’s esports entities are facing a unique risk profile—driving the need for comprehensive insurance.
Who’s at risk? Key players you need to be aware of
As a global industry, esports goes far beyond professional players to include event organizers, content creators, commentators and more, each with their own unique risk profile.
- Esports teams and organizations (e.g. TSM, FaZe Clan): entities that manage multiple players (and often content creators) across various game titles. These organizations operate like traditional sports teams, with branded merchandise, sponsorship deals and fan bases.
- Professional players: individual gamers who compete at the highest level of esports. Often contracted to teams and organizations, they face unique risks in their careers.
- Esports event organizers: companies that plan and execute esports tournaments and leagues, ranging from local competitions to international championships.
- Esports content creators and influencers: individuals who produce gaming-related content on platforms like YouTube and Twitch, sometimes with large followings.
- Esports commentators and broadcasters: professionals who provide live commentary and analysis during esports events, often with significant public exposure.
Loading… common risks and insurance capabilities
As esports combines elements of sports, entertainment and technology, it creates a risk profile unlike any other. So what common risks do you need to be aware of, and how can insurance cover them?
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IP infringement
Imagine a popular streamer played copyrighted music on a video by mistake, or a team used a trademarked logo without permission from the owner. While easy to make, these oversights can result in costly lawsuits that drain time and resources while causing reputational harm.
CFC’s media policy provides comprehensive protection from these risks, including cover for infringement of any IP rights, content misappropriation and piracy, and misappropriation of trade secrets.
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Defamation
Say a player gives a heated post-match interview, or a content creator broadcasts an ill-considered post on social media after an event. In the arena of competitive gaming, any individual or public profile has an exposure to defamation, with high-profile lawsuits no stranger to front-page headlines.
With CFC’s media policy, policyholders gain cover for defamation exposures. This includes libel, slander and product disparagement, along with emotional distress or outrage based on harm to the character or reputation of any person or entity.
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Breach of contract
During a tournament livestream, anyone can make a mistake. What if a team's star player absent-mindedly drinks a competitor's energy drink on camera? This could violate an exclusivity clause with their official beverage sponsor. Sponsorships make up about half of global esports revenues and this momentary lapse could lead to a breach of contract lawsuit, potentially resulting in the termination of a large sponsorship deal.
That’s why insurance is so vital. CFC provides cover for any unintentional breach of contract with a client for the provision of business activities.
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Cyber risk
Be it a cyber incident disrupting a streaming service or a breach that exfiltrates sensitive data, esports is facing a significant cyber risk exposure. Say a popular streamer's live broadcast on Twitch is hacked. The threat actor gains access to the streaming platform, including subscriber information and financial details. Navigating the fallout of a cyber event can be difficult and costly.
That’s why CFC offers network and privacy liability protection, and cover for a variety of cybercrime events. With us, you won’t have to deal with the incident alone. Our incident response team will step in to help minimize the impact and get you back on your feet, fast.
It's time to level up
In the fast-paced world of competitive gaming, effective risk management isn't just an option—it’s a necessity for esports entities to perform and operate with confidence.
Get in touch to learn more about esports and key exposures.
