So the worst has happened and your arts organization needs to make an insurance claim. The incident’s covered under your policy, but your insurers are saying they’re not going to pay out the full amount of your loss – even after the policy excess has been deducted. How can this be?
HOW THE APPLICATION OF THE ‘CO-INSURANCE’ CLAUSE COULD HIT YOUR ARTS ORGANIZATION HARD
The answer lies in your policy conditions – in particular the ‘Co-insurance’ clause. If this clause is applied by insurers in the event of a claim, it means that where the sum insured is inadequate (i.e you’re under-insured), the insurer can reduce its liability for a claim by applying a proportionate approach. The sum to be paid out is usually calculated as follows:
(True value at risk) x (loss) = claim sum to be paid
So for example:
Your property is worth $1,000,000.
You insure it for $800,000.
You suffer a loss of $500,000.
If your policy is ‘subject to average’, the maximum amount you recover will be $400,000.
So how can you prevent this happening to you?
Finally, why do insurers make their policies subject to this clause? The answer is simple: they need to make sure they receive the right level of premium for the risk they’re being asked to undertake.
Don’t let this kind of problem jeopardise your claim – let us help you do a great job and make good insurance decisions for your arts organization!
For more information email Elaine Lamb.
LA PLAYA ARTS & ENTERTAINMENT: INSURANCE WITH INTELLIGENCE
Advice you can trust from an expert who understands you:
There have been several notable plagiarism lawsuits impacting the film and music industry in the last several years, but Disney Studios is facing multiple plagiarism lawsuits, coming from a variety of sources that are seeking $250 million in damages.
The first of the lawsuits was filed by singer Jaime Ciero, and involves the song sung by millions of little girls worldwide. Ciero is suing Disney, along with singers Idina Menzel and Demi Lovato, claiming that the top song from the 2013 blockbuster Frozen is based on his song Volar. Pointing to similarities in note combinations, melodies, themes, and more that he sees between his original and Disney’s hit, he is seeking $250 million in damages. In his suit, Ciero claims that his song was “a huge international success reaching millions of listeners and landing on numerous charts of the most popular, top-performing songs.” A quick check on YouTube reveals that the video of his song has been seen just shy of 15,000 times, while the Frozen video has been viewed 1,249,399,612 times. The Disney song Let It Go was written by the song-writing team of Kristen Anderson-Lopez and her husband Robert. Robert Lopez is one of only 12 people to have ever won an Emmy, Grammy, Oscar and Tony.
The suit filed by Ciero is not the first that Disney has faced. In 2015, U.S. District Court Judge William Martini dismissed another $250 million plagiarism lawsuit filed by author Isabella Tanikumi, who claimed that the movie’s story is not based on Hans Christian Anderson’s The Snow Queen, but instead is a plagiarized version of her self-published autobiography titled Yearnings of the Heart. Tanikumi offered 18 examples that she claimed proved that the story characters and tone of her work were stolen by Disney. The judge dismissed the case, indicating that the stories were “entirely different” and that the similarities were “tenuous at best.” Another author, Kuwaiti Muneefa Abdulah, claimed that the film represented plagiarism of her 2007 story, “The Snow Princess.”
Film Production companies can find themselves exposed to allegations of plagiarism, unauthorized use of ideas, characters, plots and more; other claims may cite unfair competition or breach of contract. Though many of these cases are simply dismissed, others progress to an eventual jury trial or settlement out of court that requires payment to the plaintiffs. Film Errors and Omissions Insurance protects producers from these risks and more, covering the costs of investigation, settlements and defense. It can give financial protection against mistakes and allegations including:
La Playa’s experienced brokers can provide you with the guidance and information you need to make sure you have the right level of coverage at the right premium. Contact us today to learn more.
No matter how comprehensive your coverage is or how service-oriented your claims adjuster, there are certain steps that you can take to optimize your insurance claim experience. By paying attention to the tips below, you’re likely to maximize the insurance coverage you receive, as well as receive your payment faster.
Do not delay when filing a claim. The sooner you contact us about a claim, the sooner we will be able to begin investigating the situation and processing it. This is particularly important for claims that will require extensive investigation, so even if you simply suspect that you will be the subject of a lawsuit, it’s a good idea to contact us.
Make sure that you have all of your evidence in order. Documentation is at the heart of every claim, and is what provides you with the greatest chance of fair compensation. Assemble all pertinent records, whether that is photographic, correspondence, handbooks and documents, or receipts. Situations involving potential witness testimony require collecting all contact information for follow up. The more comprehensive the details you provide, the better.
Be mindful of what you say. Whether you have a friendly conversation with an interested third party or a high-spirited argument with an adversary, exercise extreme caution when discussing anything about a claim. Offhand remarks can come back to bite you, whether in the form of witness testimony or in breaching the terms of your insurance policy. Leave all conversations regarding settlement, liability, or any other related discussions to your claims adjuster.
Remember to rely on your insurer. Your insurance company is always there to provide you with guidance and the answers to questions, and it’s important that you take advantage of that availability. Faced with a challenging situation, taking action based on your gut reaction or what seems to make the most sense may lead to greater liability. Whether a situation is merely concerning or seems truly emergent, it is better to call and ask how to proceed then to learn later that the unilateral decision you made was the wrong one.
Understanding your coverage is also critically important. Insurance can cover so many of a business’ potential liabilities that organizations may assume that they have paid for coverage that they haven’t. They are often uncertain as to the specific coverage that they’ve paid for, only to find out that they do not have the protection that they need. Review your policy frequently, and especially as circumstances within your organization change. Our experienced experts can make sure that you have the coverage you need, and will stand by your side when you need to file a claim.
That’s why it is so important that you make sure that you do everything you can to protect them, and that includes making sure that you have the right insurance policy.
Nobody likes to think about loss, and that’s why people often procrastinate about insurance. This is a mistake, and so is failing to pursue intermittent updates on insurance once it’s in place. As insurers of items of remarkable value, we frequently hear about art insurance claims where the loss was exacerbated by coverage that fell short of the owner’s expectations. More often than not, this has been the result of failing to pursue current appraisals that are an accurate reflection of value.
Every insurance policy is based on the Agreed Value of the insured item. Art and collectible insurance policies contain detailed inventories that list and describe each item and the latest professional valuation. It is recommended that these appraisals be performed every three to five years in order to make sure that your coverage is in keeping with changes in market value. After all, why pay to insure art or antique furniture that may have dropped in value? You can have these valuations done by an auction house, or hire a professional appraisal firm. It’s a mistake to assume that your policy will automatically reflect value inflation: those that do often cap the amount to which a valuation can be assumed to have increased, and this can fall short of what the lost piece may have been worth.
The idea of obtaining multiple appraisals to cover large collections may seem tedious, but is usually worth the time and expense. Insurance policies that cover antiques and art generally have an established umbrella limit under a “total unspecified value,” and that can provide adequate coverage for smaller items. These policies usually limit that unspecified value at between $15,000 and $20,000 apiece, and do not cover items that are above that value: policies sold to cover a dedicated collection will be have a higher per item value limit of approximately $35,000 to $40,000 for each piece. Any individual item that is considered to be worth more than the policy’s unspecified value limit requires a listing on a separate schedule, citing its appraisal value as provided by the firm providing your valuation.
If you’d like to review your current coverage, contact La Playa today to set up an appointment for a personal consultation.
Last November Leonardo da Vinci’s Salvator Mundi sold for a record-breaking $450.3 million, and Simon Shaw of Sotheby’s recently said, “I think demand is at an all-time high at this point for the very best of the best. It’s a selective market,” with today’s collectors seeing art as a status symbol in addition to a smart investment. With rising prices come additional costs, and that includes the need to ensure that fine art is properly insured.
This need is not limited to private investors. Whether an art buyer is an individual, a museum, or any other kind of organization, art collections need to be adequately insured. Even if a collection is not expanding, there’s a good chance that the change in the global market has driven valuations up, and that means that coverage likely needs to be increased.
Some of the increase in values is a natural result of inflation, but much of it also has to do with a new generation of global art consumers. Traditional interest in art collections has expanded into parts of the world where interest had previously been untapped, and as buyers in India, China and the Middle East begin expressing interest and vying with each other for desirable art pieces, competition is driving the values sky high.
For both experienced art investors and those who are new to the market, it is important to understand where the risk of loss exists. Though many imagine that theft is their biggest vulnerability, it does not come close to the risk presented by moving and transportation. Where art that is hanging on the wall, whether in a private home or a gallery, is likely to have extensive security in place, art that is on the move faces countless risks, from shoddy packaging or handling, to accidents, to negligence. Other unforeseen events such as terrorism, vandalism and damage caused by natural disaster represents equally compelling and necessary reasons for making sure that fine art is adequately insured — particularly as climate change introduces new risks to collections located near flood zones, hurricane zones, and tornado zones.
Having a comprehensive fine arts insurance policy generally eliminates any concerns about deductibles and covers most events, including transportation, natural catastrophe, terrorism and theft. Premiums are based upon either the current value or market value of an item, as well as on where an individual piece is located and its vulnerability to each type of risk event. But even once a piece has been insured, it is incumbent upon the owner to stay abreast of changes in valuation, particularly as individual artists’ works grow in desirability, recognition and value
If you would like to discuss your own needs for fine art insurance coverage, contact us today to have an in-depth conversation with one of our professional staff members.
In the days before the Internet, newspapers and magazines automatically contacted and paid photographers or their agencies for the use of their images: without doing so, they would not have access to their photographs. But with the advent of digital media and the World Wide Web, photographs have become so easy to copy that media companies often do so without thinking about the source – and this has led to frequent and expensive copyright infringement litigation.
Copyright infringement is defined as the unauthorized reproduction, display, and/or distribution of a copyrighted work. When a photographer sees an image that they have taken appearing on a site or displayed by a user that has not paid for the right to do so, they have generally called and either asked for it to be removed or for a minimal fee. But now copyright attorneys have become more sophisticated in their pursuit of copyright infringement on behalf of photographers, and this has led to hundreds of lawsuits being filed – and millions of dollars in settlement fees.
Software now also exists that can find and identify lookalike images which may constitute infringement. This makes it easy to track down unauthorised material on a global basis.
The ability of an experienced copyright attorney to collect tens of thousands of dollars for use of a photograph stems from the existence of the Copyright Act of 1976, which potentially awards federal plaintiffs as much as $150,000 if they are able to prove willful infringement. Photographers are able to register their work with the copyright office at any time up to three months after the work is initially published, and that means that even if a work had not been copyrighted before the infringement occurred, the photographer still has time to do so in most cases, especially in those involving current events. With such a high potential fine existing for unauthorized use of a photograph, it is easy for a copyright attorney to demand a payment that far exceeds the actual value of the photograph to the photographer in order to settle.
This tactic has been successfully pursued by a single copyright attorney, Richard Liebowitz against such notable media companies as Time, Condé Nast, and Rolling Stone. Even the major networks have ended up paying large sums to photographers in response to claims of unauthorized use and infringement. Though the photographs themselves would have commanded only small sums had the media companies taken the time to license them, their failure to do so leads to extremely high costs. According to freelance photographer Yunghi Kim, “Photographers are basically small businesses. They’re little men. But you have this powerful tool, which is copyright law.”
If your media organization relies on photography to support your content, there is always the risk that an inexperienced or rushed employee might inadvertently publish an unlicensed photo or copyrighted work – or that you can be accused of doing so. To protect yourself against the rapidly rising costs of copyright infringement litigation, you need the right type of insurance. Contact La Playa Insurance today to speak to a representative who understands your needs and risk exposures.
A Philadelphia resident’s home was broken into by robbers specifically asking for jewelry. A critically-acclaimed actress’ Oscar dress, purportedly sewn with thousands of dollars worth of pearls, is stolen from her hotel room. Millions of dollars’ worth of rare Indian jewels are stolen from an exhibition at the Palazzo Ducale in Venice. What do the three thefts have in common?
All three had received an enormous amount of attention on social media before the thefts occurred.
People always enjoyed showing off their gems and jewelry, but the advent of the social media-driven lifestyle has meant that people are going far beyond enjoying the privilege of owning remarkable assets. They are broadcasting their ownership, as well as where they are wearing them, who they are with, when they are away from home, and more information that is providing potential thieves with all the incentive and information they need to engage in luxury item crime.
Perhaps the best known example of this dynamic befell reality start Kim Kardashian, who was heldpup in Paris in 2016 after having posted numerous photos of herself wearing extraordinarily expensive jewelry on Instagram, including her 20-carat diamond engagement ring. When the celebrity was alone in her private hotel room, gunmen terrorized her and took the ring, two Cartier diamond bracelets, diamond earrings, a gold and diamond necklace, and a gold Rolex watch. All told the theft represented $10 million in jewels, and in the aftermath it became clear that the theft was relatively easy to perpetrate. She had posted photos of herself wearing the jewelry constantly during her trip, as well as updates on where she was and where she was going to be. She had even commented on the identity of her personal bodyguard, thus making it clear who he was and allowing the thieves the ability to confirm that he was elsewhere and that she was unprotected.
According to Christopher Hagon, a former Scotland Yard officer who now runs a security consulting firm, “Kardashian was letting the world know what she owns and where was going at virtually every moment. I mean, how much do you hear about Jeff Bezos traveling around? How often do you see pictures of him standing in front of his own jet?” The temptation to report on every new acquisition has been fed by social media and is being blamed for more and more theft involving high value assets. Similarly, many burglary victims are learning after the fact that posting photos of their fabulous vacations gave burglars the all clear sign for breaking into their empty homes.
According to security company ADT, 78% of burglars are now using social media as a resource before pursuing their crimes. Make sure that you are judicious in your use of today’s technology. To make sure that you have the insurance coverage you need in case your valuables are targeted, contact us today to make sure your assets are protected.
Remember the old song that starts out, “I believe the children are the future?” Nothing could be more true than when it comes to the future of media. Media producers are increasingly targeting today’s children: some do so for the joy of creating innovative material for a youthful market, while others do so with full knowledge that they represent an enormous consumer market, both now and in the future.
No matter what your reason for choosing to work in children’s media or whether your genre is television, film, radio, interactive media, games, publishing, merchandising, licensing or live performance, you must take steps to ensure that your business is protected against the normal risk factors and unique concerns involved with working in this specific field, and in your particular area of involvement.
When assessing your level of risk, these are the top ten reasons why you need specialist insurance.
Intellectual Property Infringement – Insurance addresses errors of omission in seeking permission, as well as those instances where claims against your company for infringement are baseless. It provides financial protection for lost claims as well as to cover legal fees.
Libel and Slander – Whenever content is being created there are concerns that characters or statements can be construed as defamatory or libellous. This is particularly true across international lines, so insurance needs to be specific to where content will be distributed.
Distributor Liabilities – There are privacy and copyright issues that can sometimes arise as products are distributed, and the risk in these cases tends to rest with the media’s creator and producer rather than with the distributor. Film errors and omissions insurance protects against some of these liabilities, while professional indemnity insurance covers many other types of breaches or negligent acts.
Cyber Risk – Hacking, malware and ransomware can incur tremendous losses, both in revenue and in terms of material losses or business interruption. Cyber insurance policies protect against these losses.
Terrorism – Terrorism is always a risk that is lurking in the background, whether during production, distribution, or performance. Impact can take the form of business or access being shut down, as well as damage or injury In all cases a commercial producers indemnity policy would provide coverage for your cast and crew.
Working with Children and Animals – Children are uniquely vulnerable to abuse and molestation, and as such it is essential that you insure against these risk factors through an abuse and molestation insurance policy or a vulnerable persons policy. Having animals involved in your production may require additional clearances or protections.
Professional Errors and Disputes – Insuring against claims of breach of contract, negligence, breach of confidence or breach of duty of care requires coverage under a commercial producers professional indemnity policy, as well as additional riders.
Product Liability – Producers of media are frequently at risk of being accused of causing emotional distress through their content or inappropriate classification of their material. Having both public and product liability insurance protects against these risks, as does a health and safety policy.
Social Media – Social media has added an additional layer of risk to all businesses, as companies are at risk from posts that can be malicious or libelous, and there are also risks from hacking, catfishing, and copyright infringement. Commercial producers professional indemnity insurance covers this type of media liability.
Director and Executive Liability – When decisions are made at the executive or board level that work against the interests of your organizations, your directors and officers can be held personally responsible. Protection is provided through Directors and Officers Liability Insurance coverage.
To ensure that you have insurance coverage that is tailored to your unique needs in children’s media, contact La Playa to speak with one of our specialists.