Small gaming studios face coverage gaps that need to be addressed, says expert

Canada’s indie gaming scene is thriving, but when it comes to insurance, many of the country’s smallest studios are flying without a proper net.

According to Marco Andolfatto (pictured), chief underwriting officer at Apollo Insurance, small game developers often face critical coverage gaps that can leave them exposed to financial, operational, and legal risks. While major publishers may have dedicated risk management teams and tailored policies, the vast majority of studios in Canada don’t – and that’s a problem the industry needs to confront.

“Some 80% of all game studios [in Canada] have under 25 employees,” Andolfatto told Insurance Business. “For them, there’s a gap in terms of finding the right product that combines coverages for cyber-related risks, operational-related risks… and even D&O.”

Smaller developers – especially those operating with lean teams and limited budgets – often struggle to find comprehensive packages that address the full spectrum of exposures they face. Cyberattacks, intellectual property disputes, and business interruption events can all hit indie studios hard, particularly when they don’t have the scale or reserves to absorb a significant loss, he added.

Andolfatto believes the industry has yet to deliver flexible, right-sized solutions for this segment – a missed opportunity given how central indie development is to Canada’s gaming ecosystem. At Apollo, he said, they’ve tried to close that gap by building bundled offerings tailored to the realities of small studios.

An evolving gap across the broader industry

While small studios may face sharp challenges, Andolfatto said the issue of underinsurance extends across the gaming sector – particularly when it comes to emerging risks.

“Are there areas that the insurance industry is not quite keeping up with the specific exposures that video game studios have? I would say yes,” he said. One of the most glaring gaps, he noted, lies in how the industry is approaching intellectual property risk in the age of generative AI.

As game studios increasingly use AI to generate content – from dialogue and character design to music and world-building – questions around ownership, originality, and liability are growing more complex. And yet, traditional insurance policies aren’t always designed to keep pace with those developments, he pointed out.

IP-related risk, Andolfatto said, remains one of the most underserved areas across the board. Coverage language hasn’t always evolved to match the rapid advances in game development technology, which leaves many studios (large and small) with blind spots in their protection.

Still, he emphasized that the gap is most acute for indie developers, who don’t have the same in-house legal or risk management resources as larger publishers. Without bundled, easy-to-access options that account for cyber, operational, and director-level exposures, many go without adequate protection altogether.

What brokers and developers should watch for

When it comes to helping small gaming studios secure meaningful coverage, Andolfatto doesn’t offer a formal checklist – but he does emphasize a few critical best practices. First and foremost: find a broker who understands the industry.

“Find an insurance broker that knows that segment,” he said, “and then work with them to look at what you do as a company and where your exposures lie.”

While some indie studios may operate remotely and maintain a minimal physical footprint – which helps reduce certain risks – many still have significant operational and liability exposures. That includes media liability, professional liability (E&O), and in many cases, directors and officers (D&O) coverage, depending on the studio’s funding structure or corporate makeup.

From an underwriting standpoint, Andolfatto said experience matters. Underwriters want to see that a studio has the right mix of industry know-how and realistic expectations about what they’re creating – and how they plan to bring it to market.

Content also plays a role. “Some content you may want to stay away from,” he noted, especially if it veers into controversial social or thematic areas. Insurers will assess not only what a studio intends to produce, but also how their business model is structured and whether their goals align with market realities.

The broker relationship is key to all of this. Andolfatto stressed that underwriters rely heavily on broker expertise and insight – especially in a specialized space like tech E&O, where policies vary widely between providers. Brokers who truly understand both the client and the products available are best positioned to match studios with the right coverage, he says.

Don’t overlook a $5bn market

For brokers looking to expand their portfolios, the indie game development sector represents an untapped opportunity – one that’s often underestimated, Andolfatto said.

“My advice to brokers is: don’t overlook this segment,” he said. “It’s a huge industry – about a $5 billion industry annually in Canada. And 80% of development studios have fewer than 25 employees.”

That scale and diversity mean plenty of potential clients for brokers who are willing to specialize, especially as more studios look for guidance navigating operational, legal, and reputational risks.

And for studios themselves, Andolfatto’s message is clear: don’t wait until launch to buy insurance.

“Start early,” he said. “Buying insurance early shows maturity. It signals to your business partners that you’re serious about building a professional, sustainable company.”