NU Online News Service, June 26, 3:59 p.m. EDT
The sudden death of the "King of Pop," Michael Jackson, leaves behind some uncertainty in the insurance world regarding coverage for his scheduled 50 live performances at London's O2 Arena.
Bart Nash, chief press officer, Lloyd's C for Lloyd's of London, said some event cancellation coverage was placed in the Lloyd's market, but he indicated that, upon an initial look, the amount is small.
He said, however, that Lloyd's is not yet certain of its ultimate exposure.
Regarding the ultimate exposure for event promoter AEG Live, Mr. Nash said he had read that potential liability could reach ?300 million.
A spokesperson from AEG Live declined to comment on its exposure or if it had adequate insurance in place.
In a May article published by Reuters, AEG Live CEO Randy Phillips said AEG Live was well insured for the events.
Mr. Nash observed coverage may have been placed with some domestic U.S. insurers, and he noted the risk may have been spread out, because insuring 50 shows for Michael Jackson could be risky.
He added that refunding tickets–the O2 seats 20,000 and all 50 shows were sold out–is not the only exposure for the event, or even the most difficult exposure. Wages for those who had event-related employment may have to be paid, and other expenses could cause further problems for the insurer or AEG Live.
Brian Kingman, managing director for Gallagher Entertainment, a division of Arthur J. Gallagher & Co., said coverage for Mr. Jackson's shows may not have been too difficult to secure, as the market is fairly soft for nonappearance contingency risks.
Mr. Kingman has previously served as a broker for Mr. Jackson as well as for Madonna on one of her tours.
In the case of Mr. Jackson's tour, Mr. Kingman said he believes the risk was placed in London, and depending on how the policy was written will ultimately decide whether loss is covered. Every concert or series of concerts can be structured differently, he noted, and factors such as how much money is at risk, who could be out of money, and who is willing to insure the risk and under what circumstances are just a few considerations for events like Mr. Jackson's tour.
The health of the performer also comes into play, Mr. Kingman said. It is typical, he explained, for a sickness to be covered only if the performer undergoes a medical examination before a tour. In the May Reuters story, Mr. Phillips said Mr. Jackson passed a physical "with flying colors."
Mr. Kingman said he is uncertain of the terms of coverage placed for Mr. Jackson's tour, or how much was, in fact, covered, although he said he has heard placement was somewhere around $20 million.
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