Reality Shows See Higher Insurance

Sept. 5 -- 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.

Damage Control

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.