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The First Couple of Theatrical Insurance Take a Look Back

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On the occasion of their retirement, after 55 years in the business, Bob and Margery Boyar, known by industry insiders as the first couple of theatrical insurance brokerage, take a backwards glance.

Over the decades, they have brokered insurance deals for hundreds of productions, including "Fiddler on the Roof," "Applause," "Company," "Follies," "The Odd Couple," "Plaza Suite," "Sweeney Todd," "Dreamgirls," "Les Miserables," "The Phantom of the Opera," "Miss Saigon," "The Producers," and "Hairspray." They're now taking their curtain call with "Little Shop of Horrors" and "The Boy From Oz."

Seated in their midtown office at Marsh & McLennan Company (a premium insurance firm), they reflect on where theatre insurance has been, how it has evolved -- indeed, their seminal role in that evolution -- and how it may re-create itself in the future.

Not unexpectedly, the major change has been the skyrocketing cost of doing business, a trend that will only continue, especially in the wake of Sept. 11. If there is another terrorist attack -- and clearly that fear is there, says Mrs. Boyar -- the implications for liability are staggering, not simply in terms of lost business, but also destruction of sets, costumes, props, not to mention out of sight (virtually uncapped) workmen's compensation -- monies that come out of the producers' pockets.

"What a lot of people don't understand is that in an effort to spread the risk, insurance companies purchase their own insurance, known as re-insurance policies," notes Mrs. Boyar, who holds the title of associate vice president of entertainment and media at Marsh & McLennan Company. "And those who sell the re-insurance policies have become very cautious and stringent. The premiums are rising and, I believe, will continue to do so."

Here are some insurance basics that did not exist when the Boyars launched their business in 1948: Every producer nationwide is required by theatre owners to purchase a primary $1 million commercial liability policy to cover accidents that may occur in a theatre, resulting from an event on stage (as opposed to a theatergoer slipping in the bathroom). In addition, Broadway producers need an extra $10 million "umbrella" commercial liability policy to cover a host of other contingencies. Off-Broadway producers are expected to hold a $2 to $5 million umbrella policy. Equity Approved Showcases, on the other hand, have very limited budgets, so producers are expected to buy only the primary $1 million commercial liability policy.

Then there is the theatrical production package, costing one half of one percent of the show's capitalization. It covers, among other things, catastrophic accident insurance; the Equity Floater (a list of rules governing how much actors can be reimbursed for damaged or lost personal property); and property loss in connection with the production.

Examples: A computer that controls lighting malfunctions or the deluge curtain -- that has replaced the asbestos curtain -- is mistakenly triggered and the theatre is flooded. That, in fact, happened during a "Sunset Boulevard" rehearsal.

"Property loss is actually more of an issue on tour than in a Broadway house," says Mr. Boyar, senior vice president of entertainment and media at the firm. "Until about 35 years ago, no one really thought too much about property loss and what that might mean to business interruption. The watershed was what happened to a Broadway-bound show on tour called 'Good News.' As the set-carrying caravan drove under an overpass, a man on the overpass dropped a lit cigarette onto the canvas-covered van and the entire set burst into flames. It was irreparable and had to be recreated from scratch. The show was closed for a period of time and the event pointed out the need for a property loss policy."

Property loss can cost tens of thousands of dollars, if not more, he continues. The loss of business as a result of that property damage -- remember, performances may have to be cancelled while sets are rebuilt -- may be hundreds of thousands.

Business Interruption is a major contribution to the theatrical insurance package spearheaded by the Boyars. It's not that this policy, in one form or another, did not hitherto exist, but thanks to the Boyars it was re-defined and broadened to meet the particular needs of theatre producers for virtually anything producers may conceivably be held responsible for, short of a play's failure.

"Producers can now be covered for Business Interruption resulting from events that take place outside the theatre, such as a water main break, civil disturbance, or a strike in a neighboring building," Mrs. Boyar points out.

Non-Appearance -- a star failing to show, a pricey and complex area -- is the other groundbreaking Boyar advance in the world of theatrical insurance. The fact is if a star -- say, on the order of Nathan Lane -- does not show up, especially for an extended length of time, it can cost the producers hundreds of thousands of dollars. In order to determine the potential loss, producers now sit down with insurance brokers to try and gauge how valuable that star is to the show's survival.

Producers and insurance brokers also have to estimate just what the odds are that a star will miss a performance. What is his reputation? Does he have a stormy personal life? Is he a boozer? Is he accident-prone? What has his track record been like in the past?

The most striking Non-Appearance clause the Boyars negotiated centered on a mouse -- that's right, a mouse -- the star of a Broadway show, "Charlie and Algernon," by David Rogers (1980).

" 'We have a special situation,' the producers told us," Mr. Boyar grins. " 'Our star performer is a trained mouse who can stand on his hind legs and works under a follow-spot. We'd have a serious problem if something happened to the mouse. We worry about the theatre cat getting to him.' We thought about this and figured that if something happened to the mouse they needed $100,000 coverage for a week's loss while they found another mouse for the part."

Mr. Boyar continues, "So we contacted Lloyds of London, with whom we do business, and told them the dilemma. After they stopped laughing, they quoted a $5,000 price tag for the additional insurance. When we went back and cited the price to the producers, they thought about it for a few moments and finally said, 'Well, for $5,000 we'll train an understudy.' "

Admittedly, that's one of their more colorful stories, among a roster of bizarre and entertaining tales the Boyars will now have time to reflect upon. They're retiring Sept. 30, doing it cold-turkey -- no part-time or freelance gigs -- and insist they are looking forward to, among other things, the freedom to go to the theatre, whenever the mood grabs them.

Mrs. Boyar, however, has a charitable goal. "I will be working with Elda Luisi, an insurance broker for Alliance of Resident Theatres/New York, to try and find a foundation that will help subsidize worker's compensation and liabilities for [Equity Approved] showcases."

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