An Advisors' Guide to Excess & Surplus Disability Insurance

4 Ways to Insure Your Entertainer Clients

Posted Wed, Nov, 17th, 2021
By Exceptional Risk Advisors

Due to the nature and volatility of the entertainment business, traditional U.S. disability markets will not insure those in the entertainment industry.  Therefore, advisors turn to the Excess & Surplus Lines Market for unique insurance solutions for their A-list celebrity clients, mega concert tours, and entertainment events.  In this blog post, we'll uncover four insurance solutions that are most frequently used by advisors to protect their entertainment clients.

Solution #1: High Limit Income Protection

A individual's ability to earn an income is their biggest asset and the same holds true for those in the entertainment industry.  However, entertainers present unique challenges to U.S. disability carriers as their earnings history is often riddled with volatility, and they consistently present a compressed career that limits the time they earn the bulk of their income.  For those reasons, the Excess & Surplus Lines Market is the primary source to obtain Disability Income Protection for Entertainers.  We recently hosted a webinar where two Exceptional Risk Advisors' partners, Frank Zuccarello and Chris Lack, provided their insight on the current state of the entertainment market, ideal candidates, and how to unlock opportunities in this space.  You can watch the recording below:

Webinar Recording: Update on the Current State of Entertainment Insurance

Solution #2: Non-Appearance/Event Cancellation 

A musician or entertainer's ability to take the stage and perform for their fans is essential to earning an income.  According to Billboard's annual Money Makers report, musicians make the bulk of their income from touring and live performances.  For example, in 2017, 95% of U2's total earnings came from touring, Garth Brooks' earnings to touring was 89%, and Metallica ranked in 71% of earnings from touring.  

Non-Appearance/Event Cancellation insurance is designed to protect the policy owner if a show or series of shows are missed, postponed, abandoned or rescheduled. This type of insurance is available with extraordinary benefit limits to U.S. promoters through certified Lloyd’s of London Coverholders. The insurance is typically underwritten on a broad policy form that covers perils from death, injury or illness of one or more scheduled artists, as well as venue destruction, and many other perils that could cause a loss.

Solution #3: Key Person Coverage

Key Person coverage for an entertainer is not much different than coverage for a key executive.  The question is the same: what is the potential impact to the band/tour/event should the key performer be unable to perform due to a disability?  We recently worked with an advisor on a contractual performance indemnity policy on a touring band.  The tour promoter of a major pop/indie band was looking to protect the advance made to the key performers while on tour.  If one of the four key band members were to die or become disabled, the band could not keep touring. 

Key Performers Case Study

Solution #4: Exclusion Buy-Back

When creating a film, there is typically a production package that insures against the inability to film for a certain amount of days due to adverse weather, natural disasters, or death, disability, or disgrace of an actor.  If there is an exclusion on the policy, then there is an opportunity to buy-back the exclusion to make the policy whole.  For example, we worked with a production company to buy-back an exclusion on the lead actor of a major film.  We bound a $1,000,000 policy that protected the production company in the event the actor became injured and was unable to perform.

Article: What if Woodstock’s Producers Had Insurance in Place Back in 1969?

Whether you have a client who is a touring musician, Hollywood actress, successful entrepreneur or highly compensated professional, it's imperative to review how they can insure their future multi-million dollar estates from the risk of an unforeseen disability.

Interested in learning more? Schedule a meeting with our business development team today!