Insurers among the stars

With the huge budgets it invests, the film industry requires the contribution of more investors who, on their turn, require firm performance covers that enable them to recover their funds in case the star, a key element of the film, fails to achieve the project.

The insurer, a key actor in the show business industry

Studios or producers may not be required to have recourse to foreign funding for the production of their films, nor are they compelled to underwrite performance covers. Casting insurance, however, remains an integrated part of the obligations imposed by the film-making industry, because for the top of the bill, talent, glory and the other ingredients which contribute to the legend are undoubtedly necessary elements for the shiny rise of the stars. Yet, their insurance remains an essential component in the system's economy, hence the insurance companies' growing and unquestionable power and impact on the business.

In their endeavour to minimize risks, film companies take no chances by adopting all necessary measures and precautions before coming to a decision as to the actor requiring insurance and the terms of the policy. They bring under scrutiny the actors' insured record, their medical files, whether their psychological stability was affected or not by alcohol abuse or drug use, and their proclivity towards capricious and risky conducts resulting in delays.

By making insurance policies tariffs prohibitive, insurance companies can now refrain from covering high-risk actors and thus affecting their career by making those actors uninsurable persons, which is likely to discourage producers from hiring them.

Annals of the movie insurance: two ideal cases

Arnold Schwarzenegger

The producers of the movie Terminator 3 underwrote performance covers worth 2.54 million USD at International Film Guarantors, designating Arnold Schwarzenegger as the film's key element. Had the latter, for one reason or another, interrupted the shooting of the film, IFG would have refunded the production around 181.6 million USD. In addition, the company Fireman's Fund provided the casting cover bringing the film's total insurance premiums bill to 4.54 million USD.

Nicole's knee

Nicole Kidman © Keith Hinkle, CC BY 2.0

Following Nicole Kidman's knee injury while shooting the movie “Moulin Rouge” in Australia in 2001, the insurers paid 3 million USD in damages to the production. The accident's after-effects compelled the actress to quit 15 days later the shooting of another movie “Panic Room”, which cost the insurance company a 7 million USD loss in additional fees due to the delay. The total amount of compensation resulting from the cancellation of the shooting would have reached 54 million USD, if the production had not managed to hire actress Judy Foster to take over.

Later, the producer Miramax found himself unable to insure Nicole Kidman for his 100 million USD-film “Cold Mountain” since London Lloyd's deemed the actress to be a final risk, requiring 20% of premium as its doctors found out a slight weakness on the actress' knee.

To underwrite the necessary cover, Nicole Kidman accepted to disburse 1 million USD of her own money in a deposit account as a guarantee for the delay risk regarding the shooting of the movie, the co-producer, likewise, had to chip in by depositing 500,000 USD in the same account.

The star has also consented to her replacement by a stand-in for all the scenes deemed dangerous for her knee. To do so, the company has set up a monitoring device whereby access to the script of the film is made available to assess risky sequences, inspectors are present on the film set, and strict medical control for the star along with a ban on some dangerous activities such as air travel, surfing or motorcycling.
The actress' positive stance has enabled her to restore her insurable status that she had lost during the shooting of “Moulin Rouge”.

The stars' insurance : tailor-made stuff

In fashion with the stars' vagaries, their insurance may take the most diverse, unexpected and even ludicrous forms. For stars as well as for insurance companies, the nature and the amount of these covers remain sealed with secrecy, nonetheless, the press people manage to sneak in and divulge some of them.

In the Anglo-Saxon countries particularly, the insurers are accustomed to responding to all the stars' requirements offering them tailor-made policies. This promptness displayed by insurers is merely a businesslike reflex to a niche where money flows in abundantly.
The calculation of damage and premiums requires a subtle knowledge of the mysteries surrounding the world of show business.

Ben Turpin

Among the American insurance companies specialized in the film-making industry, we find Fireman's Fund, AIG or Berkshire Hathaway. On the London market, Lloyd's which is present on the star insurance segment reports an annual turnover of 486 million USD.

Some stars of the show business get their “talents” insured. This could range between a pair of legs to a breast, a voice, eyes or any other part of the body that is deemed as a source of living. Other requests relate to less common risks as unlikely as abduction by aliens, attacks by wild animals or the fall of asteroids, satellites or debris from disintegrating space shuttles.

• The first actor to get insured in the 1920s in Hollywood was Ben Turpin who had underwritten a policy to cover a physical defect that he had made into a professional trademark: he was squinting.
• Renowned for her unpredictable conduct, being especially tardy at the film set, Marilyn Monroe was the typical star that is likely to boost casting insurance tariffs skywards for her producers.
• The star top model for the razor blades Gillette, Heidi Klum, was required by her employer to get her legs insured. The policy amounted to 2.13 million USD, of which 1.15 million USD for her right leg and 980,000 USD for the left leg, the difference being due to a slight scar on the left knee.
• For the stunts of a film inspired from video games and of which Angelina Jolie was the main actress, the insurer AIG decided to provide three stuntwomen for the replacement of the actress in order to prevent any incident that could have cost 134 million USD in compensation.
• Ranking 25^th in the stars record of achievement, the sex-symbol Jennifer Lopez is believed to have insured her body for the sum of 1 billion USD. This contract required the association of several insurance companies. The amount of compensation varies according to the affected part of the body: legs, backside or breast.
  The companies did carefully exclude pregnancy and weight loss risks from the cover.

• Marlene Dietrich

  Just like Marlène Dietrich, way back, the rocker Bruce Springsteen who owes his success to his flaky voice insured his vocal cords at Lloyd's for a policy worth 6 million USD.
• The producer of the rock star Johnny Halliday's next tour comprising 50 concerts to be held from July 2^nd to December 17, 2006 has underwritten up to 29.6 million USD in insurance against cancellation risk for equipment failure or bad weather. The cancellation of the rocker's show in the Stade de France in July 1999 set the insurance companies back 3.2 million USD.
• For a unique concert at the International Carthage Festival in the summer of 2004, the producer of the singer Garou required an insurance policy against cancellation risk because of bad weather. The amount of the premium was set at 6% of the fees.

Insurance policies

The companies that are active on the niche of artistic productions and highly publicized events propose a wide range of covers. The schemes are designed according to criteria such as: budget, locations, terms and dates of achievement, casting, authors, decors, costumes, accessories, value and nature of production tools, special effects, ...

The major exclusions imposed by the insurance companies regard stunts, pyrotechnics, aircrafts, ships, animals, battle scenes, weapons, scaffolding height.

Insurance companies are particularly demanding in terms of security measures when it comes to the organization of music concerts gathering a large number of spectators.
Due to the controversial reputation often linked with its authors, the public concerts of Rap or Hip-Hop music are not covered by insurance companies, hence their frequent cancellation.

The news: Bollywood in search for insurance

With more than 500 films produced every year and stars adulated such living gods, Bombay (Mumbai) is the Indian equivalent to Hollywood, which won it the name of Bollywood. While insurance was thus far unknown there, many accidents taking place during the shooting compelled some great studios and production firms to integrate it into their projects. The continuous rise of budgets and that of risk factors account for such decisions. The insurers on their part are getting keener on this niche. Quite recently, General Insurance Corporation of India (GIC) has taken part in the increase of the capital of Infinity Film Completion Services, a financial company which is marketing performance covers for films.

The end