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Jun
29
Insuring Insolence: The Cost of Celebrity Mishaps
Posted on Jun 29, 2011 by Sergio Ulloa (G+)
Life insurance, health insurance, property insurance, and...no-show insurance? No-show insurance is just one of the plans being offered to celebrities today, as substance abuse and resulting medical conditions are increasingly preventing singers and actors from showing up to scheduled appearances.
Just a few days ago, five-time Grammy winner Amy Winehouse, whose 2006 song "Rehab" foreshadowed her steady downfall ("They try to make me go to rehab, I said no, no no"), stumbled onstage in Belgrade, Serbia, unable to sing or remember the lyrics to her own songs, and even appeared to not know where she was. While her "performance" is certainly tabloid fodder, one can't help but to wonder who is going to pay the price for this disaster, as fees for tickets, venue, equipment, and payment of employees become very expensive.
Neil Warnock, Chief Executive of The Agency Group booking agency (which represents artists such as Paramore, who will be performing in Hong Kong later this summer), weighed in on the situation to explain a typical cancellation/non-appearance insurance policy. "If you fairly disclosed any pre-existing conditions, and what caused the cancellation is a new condition, then the artists and promoters would be covered. If it's a pre-existing condition, then it wouldn't be covered, or if it's an undeclared condition that should've been declared, then that wouldn't be covered." Winehouse's bouts with illegal substances and stints in rehab are no secret to the public; in 2008, her father disclosed that his daughter's lungs were only operating at 70% capacity due to her smoking and cocaine habits. To put it simply: unless Winehouse's performance issues were caused by something other than her highly publicized substance abuse problems, she's going to have to pay.
Winehouse is not the first celebrity to deal with insurance policies related to personal issues . No-show contracts go as far back as Marilyn Monroe, whose own struggles with substance abuse led studios to purchase insurance on her, enabling the studios to be compensated for the financial losses caused by her absence.
Most recently, Michael Jackson's insurers, Lloyd's of London, and and his concert promoters, AEG, have been locked in a lawsuit over his canceled comeback tour. After Jackson's death in 2009, Chief Executive of AEG Randy Phillips proclaimed that the cancellation and non-appearance insurance policy the company took out on Jackson would cover any costs should the late star die accidentally (but not because of natural causes), specifically US$17.5 million to AEG and Jackson's estate. However, a couple of weeks ago, Lloyd's revealed that they were not willing to pay the fees and were instead suing AEG and Jackson's company for not disclosing his full medical history. Lloyd's has requested a Los Angeles Superior Court judge nullify the policy, as they were not informed of "his apparent prescription drug use and/or drug addiction." Howard Weitzman, lawyer for Jackson's estate, contended that Lloyd's "legal action is nothing more than an insurance company trying to avoid paying a legitimate claim by the insured."
The costs of an actor not showing up to a set are just as exorbitant as a singer canceling a concert. Charlie Sheen, most recently known for his outlandish comments-such as those against former performers-"the run I was on made Sinatra, Flynn, Jagger, Richards, all of them look like droopy-eyed, armless children"-reportedly wants to return to work. Although it should be noted that despite substance abuse problems, The Rolling Stones were able to fulfill their contracts and perform as promised. Unfortunately for Sheen, not all of Hollywood is sure if he is worth it; a successful comeback may largely depend on who is willing to insure him. Morgan Creek Productions CEO James Robinson (who has previously worked with frequent absentee Lindsay Lohan), said that "when an actor doesn't show up for work, you can lose half a million dollars a day paying the 250 other people there for the shoot and the costs for the set." However, Lorrie McNaught, Vice President at leading entertainment insurance brokerage firm Aon/Albert G. Ruben disagrees, saying that it isn't a question of whether or not to insure someone, but rather, how much they are worth. "Everyone and anything, or almost anything, is insurable. It just comes down to price."
As some celebrities' careers continue to spiral downwards due to personal issues, it remains to be seen whether the substance abuse and frequent absences are worth the price of insuring them.
Insurance Companies Mentioned:
Lloyd's of London: With the motto "uberrimae fidei", or good faith, Lloyd's provides insurance and reinsurance services, covering some of the world's greatest and most complex risks.
Aon/Albert G. Ruben: Covering production companies, performers, and more, Albert G. Ruben provides risk management and insurance services for the entertainment industry.