From the January 10, 2011 issue of National Underwriter Property & Casualty • Subscribe!

When Insurance Meets Reality

When reality TV programs first appeared on our television screens, many thought it was just another fad that would not last. Indeed, many more hoped it would disappear to ensure quality broadcast programming.

Whatever your perspective, the naysayers have been proven wrong. Reality TV is here to stay. The public has an insatiable appetite to perform in front of the camera, however embarrassing, and we all have a similar appetite for watching them--whether we admit it or not.

Related Learn about the risks and coverages at Lollapalooza

The insurance forms handling this growing form of television programming trace their roots to the same forms developed for film productions years ago. While the forms have evolved over the years, including more recent insertions of technical terms in deference to the digital age, the basic premise remains the same. A film or television policy covers the cast, extra expense from physical damage, equipment, props, sets and wardrobe, rented locations, the raw stock and/or exposed film or digital elements.

Yet for all of broadcast programming's commonalities, there are several unique aspects related to reality-television productions.

Small, lightweight digital cameras produce broadcast-quality images, transporting us from our living rooms into the jungle to watch daredevil competitions, or into glamorous mansions to watch badly behaved girls connive to outwit each other.

In fact, we no longer need to be in our living rooms. The reality format is the perfect fodder to feed the voracious appetite of the digitally fed masses who consume such programming through their laptops, iPads and 4G-equipped smartphones.

So reality is here to stay and it is time that we addressed its needs as an industry. The traditional portfolio policy does not adequately serve the reality TV world, which presents some unique risks.

Reality TV, with its modest budgets, guerilla-type shooting schedules and the pressure to be different, offers a number of risk management challenges. Although budgets are often modest by current standards, producers need to constantly pursue innovation to hold the viewer's interest. This means that shoots are often assembled on short notice with minimal crew and equipment, and with thorough, but hasty, preproduction.

In contrast to traditional programming, reality television casts are infrequently the driving force of the show. While a show like "Jersey Shore" has characters who have become "stars" in their own right, the ensemble nature of such casts means that if one person is unavailable due to illness, they can concentrate the story line on another cast member.

Even celebrity judges can be temporarily replaced if they fall ill or are injured. The physical risk to the participants therefore presents less risk from an insurance point of view than a traditional show.

The cast exposure is more subtle, revolving around their actions that could include anything, even being arrested or incarcerated, or possibly falling into such disgrace the show cannot continue. Specialty insurance companies are responding by offering innovative solutions for this unique type of risk.

Further differences between reality and traditional programming relate to budgets, which are usually lower than scripted shows, and production schedules, which are typically far less rigid. As a result, reality shows are less prone to adverse impact in the event of physical loss or damage to their facilities. A show like "Survivor" could be seriously affected if a hurricane hit the island they were filming on, but a show such as "Pimp My Ride" could relocate relatively easily. Overall the exposures are reduced.

From an equipment point of view, reality television can present less risk. Lighting set-ups are less complicated and cameras are often handheld, which translates to smaller crews, lower equipment values and hopefully, lower or smaller claims.

Even when a show is studio-based it usually has a simple set-up. Think of the numerous cooking shows or participant competitions with their basic, simple sets.

So while certain traditional risks are less substantial for reality programs, there is one increased exposure related to locations. Reality TV shows love to house their contestants in imperial mansions, often for several weeks. This, unfortunately, has led to several claims arising from damage inflicted on those grand homes and their contents.

The need for the luxurious appearance is an important aspect of the program theme, however. It would simply not be the same to watch the Bachelor choose his would-be bride while living in a modest apartment. Nevertheless, it is essential that producers allow for the cost of clean-up and repairs once a show is completed because their insurance policy may not always respond to such claims.

Finally, there is the issue of retakes. By its very definition, reality TV is not supposed to be rehearsed, scripted or practiced. So if something happens to the film, how could they shoot it again without sacrificing spontaneity? This is certainly a bit facetious, as these programs often shoot the same footage from various angles, which means that the loss of a tape or a section of film is not a real problem.

In short, the standard TV policy covering the exposures faced in the reality TV business generally overcompensates for the reality (no pun intended) of the risks such productions truly face.

Reality TV is here to stay, so enjoy your guilty pleasure, and as an industry, understand the unique challenges associated with proper protection and risk management of this style of entertainment.

Peter Williams is president of OneBeacon Entertainment, which provides specialized commercial insurance products, including professional liability coverages, for the entertainment, sports and leisure industries. Mr. Williams may be reached at pwilliams@onebeacon.com.

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