In the bizarre world of reality TV shows, where eating bugs and watching a video of your girlfriend cavorting in a hot tub with four other men is the norm, a surprising player is lurking in the shadows: the insurance agent.
Though the number-crunching, analytical realm of insurance may seem like the polar opposite of the universe of reality television, the increasing outrageousness of reality show contests, as well as the growing litigation surrounding these programs, adds up to higher insurance premiums for many of these shows.
And the reality trend shows no signs of slowing. Two new shows will premiere this evening. NBC's Lost and CBS' The Amazing Race both feature average people trying to navigate their way through unknown locations and situations on limited budgets.
Reality shows may be cheaper to produce than more mainstream TV programs with big-name talent, but the total cost of insuring a reality show can be as much as 50 percent higher than insuring a regular television program filmed in a studio with professional actors and no stunts, says Wendy Diaz, executive underwriter in the entertainment division of the Fireman's Fund Insurance Co.
Further affecting premiums is that the insurance market in general has gotten tighter, with more companies demanding more money for taking on added risks, say other industry watchers. Premiums for property/casualty insurance alone rose 32 percent in 1999 from 1990, according to insurance information provider A.M. Best.
"The market's starting to harden, and when the market gets harder, insurance companies become more selective in what they [under]write," notes Brian Kingman, executive vice president at AON/Albert G. Rubin Insurance in Los Angeles.
The rising cost of jury awards — the average award for business negligence cases in 1999 was $241,703, a jump of 61 percent from 1994, according to Jury Verdict Resarch — has also placed an added financial strain on entertainment budgets.
In addition to standard insurance like workers compensation, liability and automobile insurance, entertainment producers also have to take out specialty policies to protect against damage to sets and cast liabilities. Errors and omissions liability coverage, which protects producers against things like lawsuits for libel, slander and copyright infringement, is another common policy for these producers.
For reality programs, insurance coverage poses some special challenges. Since most of the participants are real people and not hired actors, they may not covered by workman's compensation. This could open the door for contestants to launch lawsuits in the event of an accident, says Kingman.
Reality shows have already seen their share of litigation in other areas. The higher profile cases include Survivor cast member Stacey Stillman's suit alleging that the show was rigged against her and CBS' suit alleging that the Fox network stole the idea for its Boot Camp series from CBS' Survivor.
Generalizations about how much it costs to insure any television show are difficult to make since the degree of risk varies depending on what the program's producers are planning on doing. Further, both production and insurance companies are reluctant to disclose how much entertainment insurance typically costs for both competitive and legal reasons.
"If you have one of your contestants skydiving as opposed to sitting in a house all day, your liability for bodily injury would be significantly different," says Diaz.
But one thing that is certain is the approval of insurance companies can be crucial to the decision behind whether or not to include a certain stunt in a show.
Eric Schotz, chief executive and president of Boot Camp producer LMNO Productions in Los Angeles, says concerns over the high cost of insurance have prevented him from including stunts in some of his reality programs. One such case involved a man who wanted to balance in a chair on two legs from an extremely high location without a safety net in LMNO's show Guinness World Records: Primetime.
"He refused to use a safety net, the insurance company refused to insure it, and we didn't do it," says Schotz.
That being said, Schotz doesn't think reality shows are becoming more dangerous. He notes that what viewers are seeing on reality television is more a perception of danger than the real thing, since contestants are protected by precautions that the television audience can't see.
"Unusual situations are not necessarily dangerous situations," says Schotz.