Insuring the Oscars |
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| Strategic Finance | |
| Written by Lloyds of London | |
| Friday, 20 February 2009 | |
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The main covers are cancellation of the event, terrorism cover and legal liability insurance covering the organiser’s employees as well as members of the public. On the surface, the only problem organisers face is flood risk—as Kate Winslet and her ilk make their emotional thank yous. In fact, the organisation of a big awards ceremony is fraught with potential pratfalls, from wrinkles in the red carpet to power outages. Covering organisers against the unthinkableFortunately, insurance is available to cover organisers against the unthinkable happening. The main covers are cancellation of the event, terrorism cover and legal liability insurance covering the organiser’s employees as well as members of the public. Within the cancellation policy, organisers need to ensure they have adequate terrorism protection and bear in mind that terrorism wordings can vary, advises Sue Moseley, entertainment and special risk manager at Robertson Taylor, a subsidiary of Lloyd’s broker Oxygen. “Depending upon the size and profile of the event, organisers should ensure the policy provides the broadest scope of cover needed,” she says. “A standard cancellation policy would cover the event for cancellation in the event of say a fire or power outage, but would generally exclude terrorism.” Unexpected events can cause cancellationNick Anscombe, senior vice president in the personal accident, contingency & entertainment practice at Marsh says that cancellation can be caused by quite unexpected events, and organizers would do well to look at every possibility—however remote.Last year a strike by Hollywood scriptwriters crippled TV and film production and led to the cancellation of the Golden Globe awards ceremony. Before the dispute was settled, Oscars organisers had even discussed a ‘plan B’ for their ceremony that would see the Academy Awards gala become a star-free show filled with clips and film packages. “Insurance cover is available to cover the extra expenses incurred or lost revenue caused by such an event,” Anscombe says. “But the moral is, don’t wait until the risks are known to try to buy the cover because it won’t be available then.” Health and SafetyOn the liability side, organisers usually have to ensure they have abided by all legal requirements including sign off by the local authority’s health and safety team, and necessary permissions. If the red carpet is going onto a public highway, the organisers need to have the necessary permissions in place, Sue Moseley says.Liability insurance should be in place before the ceremony happens—and after. The policy should cover the set build—putting the staging up, and after, when de-rigging. It should also provide cover during the event and organizers should ensure that all sub-contractors are also adequately insured. “Consider the sound and light engineers who may well be sitting above the stage/audience in rigging,” Moseley says. “This can be a high risk area especially as it relates to employers liability if these employees are under the main organisers’ control.” Smooth out the wrinkles in the red carpetAnd what about that red carpet? What if an A-list celeb happens to trip and break a well turned ankle?“If the organisers are negligent in securing the red carpet, then they should have a suitable legal liability policy to pick up claims arising from this aspect,” Moseley says. “However, if everything was set up correctly and a celebrity trips, under the terms of standard legal liability policies, negligence would have to be proven for liability to be engaged.” When stars cry offA no-show of a prominent artist can be a disappointment for fans—such as when R&B stars Rihanna and Chris Brown failed to turn up at this year’s Grammys—but it is less of a disaster for the organisers.“This is generally not an element that organisers need covered, as a no-show of one particular individual would not result in the cancellation of an event,” Moseley says. “The organisers would get another act or individual involved.”
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