AM I COVERED?……..IN-SURE THING!
This is the first of a multi-part blog on a topic which is important to all musicians whether you are international or domestic, original or cover; live or in studio; or, on stage or in transit; insurance. The funny thing about insurance is that sometimes it is only thought of after an incident has happened or it is suddenly needed for some reason. However, with this topic aggressive and preventative measures are often more prudent than a “wait and see” attitude. In other words, here it might be better to be proactive rather than reactive.
To be clear, insurance comes in different forms and it covers a broad range of issues and activities going well beyond “liability” insurance which is typically insurance associated with accidents and people getting physically hurt. That’s important to keep in mind when thinking about your insurance needs. In fact, a great starting point to get everyone thinking “outside the box” (as they say) is a 2005 case involving mega pop band Third Eye Blind.
In that case the band hired a business manager who was responsible for assessing the band’s insurance needs. The band also hired an insurance adviser who had expertise in the field of entertainment insurance and risk management.
The band was insured under a commercial general liability policy however, neither the business manager nor insurance adviser informed the band that their policy excluded coverage under a “Field of Entertainment” limitation endorsement. Specifically, coverage was excluded for claims relating to invasion, infringement or interference of the right to privacy or publicity; copyright or trademark infringement; defamation; unfair competition; and, breach of contract regarding the band’s professional entertainment work.
In 2000 Third Eye Blind fired one of its band members, Kevin Cadogan, who then filed suit against the remaining members alleging they had misappropriated his right of publicity by making an unauthorized use of his name, likeness and goodwill and, that they had created public confusion regarding his affiliation with the band. He also claimed that the band’s continued use of the name Third Eye Blind constituted trademark infringement.
After Cadogan sued the band it gave the suit to their insurance company for defense however, the carrier refused to help asserting the “Field of Entertainment” endorsement excluded coverage. The band then settled with Cadogan for $3 million and it then filed suit against its business manager and insurance adviser alleging that they were negligent in failing to properly inform the band of the lack of coverage.
Ultimately, a California appeals court found that the business manager and insurance adviser were negligent in advising the band about the exclusions in its insurance policies.
Here’s the point that Third Eye Blind makes. You need to carefully inventory what issues you have and make sure that you have coverage for those issues. As that case makes clear, you don’t necessarily need an accident (as in someone getting physically hurt) to think about insurance. You—and your team of advisers—need to consider many situations beyond accidents and injuries and as Third Eye Blind demonstrates, proper insurance coverage comes in handy in many different situations beyond physical accidents.
In our next segment we’ll discuss some of the areas covered by insurance as well as some basic ground rules of coverage that you should be aware of. Stay tuned.