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Company Law

Q: Insurance for theatre company

We are currently in the process of starting a professional touring theatre company. Our premises and transport are insured but will we need separate cover out on tour?

A: You will certainly need to insure your physical production assets, that is to say your stage sets, properties, costumes, wigs and technical equipment, at least while on the road. It is also probably safest to insure them while in-theatre in case they are not insured by the theatre owner's policy, either at all or not for a sum which you would consider adequate. By insuring in-theatre as well as elsewhere, you will be avoiding repeat insurance checks with theatre owners every time you move from venue to venue, which will be particularly troublesome if your tour involves multiple venues for short runs.

If you use a good insurance broker - and there are some who specialise in the theatre industry - your broker will advise you as to what should be the insured risks in relation to your physical assets. I would expect these to include theft, fire, explosion, storm, flood or other water damage, malicious damage, escape of deleterious matter, accidental damage while in course of transportation, packing or removal and consequential loss. Another essential form of liability is against public and third party liability, including liability to your own stage company for accident or misadventure.

All the risks mentioned above are very basic and could, in a serious case, wipe you out if you are uninsured, whereas the cost of insurance in comparative terms should be modest.

The amount of cover required is always difficult to assess but, so far as the physical assets are concerned, you will know what you have paid for them and you should endeavour to arrange cover for their full replacement value in case of total loss or damage. Conse-quential loss cover should include your estimated loss of profits caused by cancellation of the tour due to an insured occurrence.

Another form of cover which you may care to consider, depending on cost, is illness or accident of your stage company. To take an extreme example, if the entire company, or even only one or two key performers, were to go down with food poisoning or influenza or something of that nature, resulting in a series of performances having to be cancelled, you would need cover against your own loss of profits from those performances and your liability to third parties (if any) caused by their cancellation.

Then there is key-man insurance against loss resulting from death or incapacity of a key employee or stage performer and fidelity insurance cover against loss resulting from fraud or dishonesty on the part of your senior management. One could on, listing risks against which it is possible to insure. The important thing is to cover the essentials as described above and take advice from an insurance expert to help you achieve a sensible balance based on what is customary and what you can afford. Try not to be penny-wise and pound-foolish. If cover for a particular risk is cheap and affordable, the peace of mind from taking it up is something you are unlikely to regret.

First published 5th February 2004