It is an industry within an industry that would confuse even the most astute meerkat, in which comparing the market means considering relative risks as diverse as overdoses, osteoarthritis, no-shows, crowd-surfing mishaps and illness caused by historical coconut-related injuries.
Entertainment insurance is centre stage this week after court papers filed in an £8m legal battle between The Rolling Stones and the underwriters of their world tour included revealing and potentially costly small print.
The band postponed the Antipodean leg of their tour last March when L'Wren Scott, the fashion designer and Mick Jagger's partner, committed suicide. Doctors diagnosed Jagger with post-traumatic stress disorder, but insurers rejected an £8m claim from a £17m policy, disputing the nature of the diagnosis and the death ("Ms Scott intended to, and did, commit suicide and her death was therefore not 'sudden and unforeseen'").
The papers also reveal the exemptions in the policy. Insurers will not pay out if anything happens to Keith Richards related to "alcohol abuse, liver failure and/or disease and osteoarthritis". Nor will they pay if the guitarist becomes ill due to the injuries he sustained when he fell out of a coconut tree in Fiji in 2006 and required brain surgery.
Steven Howell, a veteran of the industry as well as a band manager, is an insurance broker – the middleman between underwriters and bands or performers. Confidentiality is sacred in a game in which artists are expected to face their own mortality, but he agrees to talk in general terms, and says the Stones' policy is pretty standard. "We have to have horrible conversations in advance of tours when we say to bands, 'You have to decide who you want to name on this policy,'" he says. "People whose death would be enough for you to trigger a cancellation." The Stones papers reveal the list Jagger agreed to, including seven children and L'Wren Scott.
"Non-appearance" or cancellation is one of the toughest risks to deal with, says Howell, who secures policies ranging from hundreds to millions of pounds at the London-based Music Insurance Brokers. And as declining record sales intensify the focus on, and investment in, live performance, insurance is a growing element in musical finances from the bottom up. "I just did a band this morning who are going on the road for the first time," Howell says. "Their biggest risk is lost or stolen equipment."
As artists grow, the stakes get higher. Next up, public-liability insurance, which covers, say, mosh-pit injuries or crowd-surfing falls among fans – things that could be blamed on the band. "Fortunately in the UK most people don't think of suing," Howell says. Partly as a result, poorer bands often avoid taking out policies, or exaggerate their cover when venues demand one. "I often get distress calls during soundchecks," the broker adds.
At the top of the bill, underwriters make million-pound judgements based on research. Lloyd's is the biggest underwriter for cancellations or non-appearance. "There might be half a dozen specialists there who know music, and everything about a band," Howell says. "They will find out about cancelled gigs, and have a list of the worst people to insure… It is not uncommon for them to exclude things that have resulted in previous claims."
Exemptions occur when the cost of a policy would eat up too much profit. But brokers can also reduce premiums by suggesting measures such as more rest days during intensive tours. They often also have to convince underwriters of the good health or reliability of an artist or band. "With the way the internet and social media have gone, there's a lot of false information out there," Howell says. "I'm constantly talking to underwriters who have read that so-and-so is in rehab or has done this or that."
When things do go wrong, the claims can be massive. U2 reportedly won an £11m payout in 2010 when a Bono back injury forced the postponement of the band's massive 360° Tour. Last year, an undisclosed amount changed hands when Lady Gaga was forced to call off her tour after sustaining a hip injury. But in both cases, profits still dwarfed the size of the premiums.
The challenge when dealing with celebrities who value privacy can be the proper disclosure of health conditions, Howell says. At the lower end of the industry, getting kids' engagement in money issues is the bigger deal. "I manage a band in my spare time and get frustrated," Howell says. "Many bands couldn't care less about insurance."
But as shifting economics demands greater professionalism during tours (claims for cars driven into swimming pools or trashed hotel rooms are rare these days), the broker says that getting good quotes is easier, despite the rising stakes. Which is good for the industry, if of little comfort to The Rolling Stones.