Insurers May Now Cast Warier Eye On Risky Acts

By Mark E. Ruquet

NU Online News Service, Oct. 10, 12:03p.m. EDT?Underwriters may take a second look and requiremore safety precautions for Las Vegas acts with wild animals andother risky features, according to insurance brokers.

Their comments followed the Oct. 3 attack by a white tigerduring the Siegfried & Roy show at the MGM Mirage which leftRoy Horn, a principal in the act, in critical condition after hewas severely mauled.

Kenneth Schneider, vice president and director of productdevelopment for Burns & Wilcox based in Farmington Hills,Mich., said the attack makes underwriters realize that such actsare probably "more dangerous than they perceive" and that it willbring more focus on safety issues. He said entertainment venues maybe forced to erect safety barriers or something similar to protectpatrons.

"It's going to make people look twice at the safety issue, butit will transcend a lot of entertainment venues, not only Las Vegasbut other events such as alligator wrestlers and similar forms oflive animal entertainment," he observed. "People have to come togrips with the fact that wild animals are just that, wild."

He said underwriters are going to begin taking a more seriouslook at the potential for incidents involving exotic animals.

The result may be that in some venues, capacity for those actscould dry up, but its not going to happen overnight, heemphasized.

New Century Global's Lee Orabona, president, and Carolyn Norton,senior vice president, for the New York City-based excess andsurplus lines brokerage firm, noted that so far there has not beenany confirmation of coverage for the act.

Ms. Norton said there has been no confirmation of claimsactivity to date.

Due to the amount of investment the Mirage laid out for theshow, Mr. Orabona said he was sure they had some type of insuranceprogram, possibly a captive plan.

After Sept. 11, the coverage for smaller entertainment venuesbecame very difficult to find, said Mr. Orabona, and an incidentlike this makes it almost impossible to find anything in thetraditional market.

"The Mirage has something out there, but not exactly in thetraditional way we are use to seeing," he said.

David Bruce, divisional head in charge of the high net worthdivision for Hiscox, based in London, said typically high profileacts obtain coverage based on the contract. The policyholder cantake all different forms, from the entertainer to the contractholder or an entertainer's partner.

He said policyholders could also be a spouse, advertiser,manager or anyone else with an interest in the act. It couldprotect the worth of the person or the investment of theestablishment, the individual's life or health, or continuation ofact. But it is all tied to the contract the entertainer hassigned.

On this type of underwriting, Mr. Bruce said the incident in LasVegas may cause underwriters to re-examine the amount of premiumthey charge, but it would not lead to a capacity problem.

"What this tells you is accidents can always happen, whether itis in entertainment or in sports," observed Mr. Bruce. "Thisdemonstrates the need for insurance and the need to get coveragefor the downside."