It is not unusual to read about celebrities taking out insurance on parts of their bodies. High-profile cases include the $8 million insurance policy on wine expert Ilya Gort’s nose, and the $10 million policy with Lloyds of London on the smile of America Ferrara, of Ugly Betty.
News of this kind of insurance works well for celebrities, giving them extra coverage in the press and helping to keep them in the public’s gaze. And even if the media coverage is based on nothing but rumour, the celebrity enjoys the free publicity — without even having to pay any insurance premium.
Insurers, likewise, have some advantages in being associated with a big name. It generates free publicity for them as well and involves only a very remote statistical possibility of having to pay out on such a claim. It must be said, though, that insurers take extremely large premiums from such policyholders and prevent them from pursuing potentially risky activities. So Mr. Gort, for example, is not allowed to take up boxing.
And while celebrity insurance may seem like an attempt to grab the headlines, the stakes are high for the insurers if the person in question should be injured and lose future work. Imagine if David Beckham crushed his foot during an endorsement shoot, then he would end up having to be paid money for not playing football … I leave the comments to you on that one!
But it’s worth remembering that there are some serious insurance concerns underlying all this media hypethe need for entertainment and event cover.
For example, entertainment companies typically engage floating workforces for short periods of time, so that performers and crews may change rapidly from project to project or performance to performance. This inbuilt fluidity tends to make companies ignore insurance issues.
Entertainment insurance specialist Blackfairs points out that the issue of liability may become significant even in the case of a small performance if anyone is hurt. The issues of liability and indemnity are further compounded by the fact that entertainment performances involve an audience. If an audience member is harmed while a show is on, indemnity becomes a serious matter: there are entertainment companies that have gone bankrupt through lawsuits based on such cases.
So what can common folk take from this? Certainly the current economic state has brought home the necessity of redundancy insurance. Many who need it will now be unable to obtain it. Accident and injury insurance also was unheard of a decade ago unless you were a multi-million earning celebrity, but such policies are becoming as common as critical illness cover.
And then there are you own entertainment advertures. Even small scale entertainments (like garden or office parties) should be covered. Before having friends or colleagues over for a few drinks, it couldn’t hurt to check one’s home and contents cover at least once.
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