Reality Show Lawsuits Spark Fear Factor Among Insurers As televisions demand for riskier and lewder reality shows rises, insurance executives describe an insurance carrier appetite for underwriting such ventures which sounds as enthusiastic as a “Fear Factor” contestant facing a bucket of worms.

“The marketplace for insurance, in general, is very difficult and these shows have quite a few unique risks. That makes it even more difficult to place” coverage for such programs, commented Paul E. Jones, vice president with Aon/Albert G. Ruben brokerage in Los Angeles.

Chad Milton, a senior vice president for the Marsh insurance brokerage, in Kansas City, Mo., said that with the current hard market, “underwriters see theres some greater risk of loss or greater risk of uncertainty” in these shows and “the underwriters respond with higher rates or retentions.”

The brokers comments came at a time when increased numbers of unscripted shows are the focus of escalating publicity over damage claims and lawsuits they have encountered. Opinion differed among knowledgeable parties on how much legal exposure such shows have and the impact of litigation.

Mr. Jones said Aon/Albert G. Ruben places coverage for “seventy-five to 80 percent of the reality shows.”

The types of coverage the firm places include protections against film problems, as well as coverage for damage to cameras and processing equipment, property, sets and wardrobe. He also listed commercial general liability, commercial auto, workers compensation, accidental death and dismemberment, and excess accident medical expense as other coverages available.

Premium prices vary depending on the size of a shows budget and the risks involved, Mr. Jones said. He explained that rates for a show like ABCs “The Bachelor” are “far less than Fear Factor or Dog Eat Dog. You could have a show with low risk that would run a $20,000 premium and a show with a lot of stunts and a big budget that could be in the millions.”

With a stunt-filled show, there is no easy way to secure insurance. “All the coverage is difficult to place” for such shows, Mr. Jones said.

He said that to limit risk, his company has consultants on staff who are familiar with the reality show business, and that carriers frequently make it a requirement that someone with a loss control function is out on the sets.

Are some shows too perilous for anyones money?

Mr. Jones said his company had been unable to find coverage for two planned productions because the stunts involved were “too risky.” Neither show has made it onto TV screens, he said. When the first “Survivor” show was in pre-production, Chubb Commercial Insurance was asked about taking the risk. “We decided we would not be interested in giving them a quote, said Gene Williams, entertainment manager for the Warren, N.J.-based underwriter. “Our position has not changed,” he said.

Chubb does insure television productions, but mainly limits it to coverage for losses from production stoppage due to equipment damage or cast member illness. “We also provide general liability–but not for one of these [reality shows]” Mr. Williams said.

At Firemans Fund Insurance in Novato, Calif., which describes itself as the largest insurer of Hollywood productions, Wendy Diaz, the executive underwriter, said theres “a lot of work” involved with evaluating the exposure for these shows.

“Compared with a normal TV series, the [reality show] cost has always been more,” Ms. Diaz noted. She said that when “Cops” first aired the company had insured it, but “we dont anymore.”

“Fireman’s would avoid stunt shows like “Fear Factor,” she said.

Has the company declined to quote on many reality offerings? “Theres been a lot,” she said. She noted that as more shows have aired, “people are starting to get hurt and they are starting to sue.”

One injury case that was filed in Los Angeles County Superior Court involved a woman who complained she suffered injury to her back after she was hung in a harness during filming last year of the pilot for a CBS show called “Culture Shock.”

Brian Grossman, the Los Angeles attorney representing the plaintiff Jill Mouser and her boyfriend Marcus Russell, said his clients had signed an application with plenty of waivers, which “we contend are unenforceable.” He said his clients were led to believe the show involved an athletic contest “and at the last second were told it was about withstanding pain.” Mr. Grossman said he thought under “very narrowly protected circumstances”–when the exact risks are involved–that a waiver might protect a show.

Even when no athletic stunts are involved, reality productions have managed to provoke legal action. Gloria Allred said she is suing on behalf of two teenaged girls who stood by a stage during an MTV production at a ski resort and were defecated on by a performer. MTV had no comment.

The Los Angeles attorney said she recently settled a case where a pilot production used her client as the butt of a prank where he delivered an envelope to a woman who exposed herself. The company attempted to have the man sign a release, but he refused and the show never aired, she said.

Ms. Allred said that in another case shes involved with, show producers filmed a youth at a beach making lewd sexual comments to a couple as the woman blew up a beach ball. The man, she said, refused to sign a waiver, but the tape was aired three times anyway. He is suing for misappropriation of likeness and unfair business practice, she said.

Aon/ Albert G. Rubens Mr. Jones said that while “anybody can sue anybody for anything,” he believes that once contestants sign releases and get an explanation of whats involved, “they have the opportunity to participate or not participate. And its going to be very difficult for them to prevail in court.” He and others in the industry said they knew of no large judgments against reality shows, but they noted that amounts involved in settlements would not necessarily be public. Even if there is no large judgment, Mr. Jones remarked that legal defense costs can be very expensive and are factored into policies.

Mary Schust, senior vice president for underwriting at Media/Professional Insurance in Kansas City, Mo., said reality shows are also spawning copyright and intellectual property litigation from plaintiffs who claim producers have improperly taken their concepts. She said Media/Pro is not offering broad form errors and omissions coverage for reality shows and is limiting the scope of insurance for copyright claims and requiring coinsurance clauses.

Ms. Schust said she believed that, in some cases, the shows risks are being covered by television networks with self insurance. With risky shows encountering insurer demands for high retention rates and giant premiums, “the producer will decide to self-insure it. Weve had that happen,” she said.

Reproduced from National Underwriter Edition, February 10, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.