The High Cost of Insuring Movie Stars

Posted in Life Insurance

March 5th, 2010

Photo by SpreePIX – Berlin

Oscar season is upon us, and once again its time for the Academy to recognize its best and brightest. While the night will be devoted to glamour, the actual making of a film is composed of many less exciting elements.

One of those is the high cost of insuring actors. Everyone has heard of the lengths celebrities will go to in order to insure their own personal assets, but movie-making insurance is much costlier and more complicated than that.

Why Insure an Actor?

The way it works is this: Any actor starring in a movie must, by law, be insured. Since movies have a set budget and a tight timeframe, if anything causes delays it will cost the production company.

On a big-budget film, that can get very expensive up to as much as $400,000 per day. So, if a star holds up production the dollar costs start to add up very fast, and the film’s investors are not about to take any chances with losing their money.

This is where an actors personal problems come in to play. Sometimes its through no fault of their own, as in the case of Nicole Kidman and her bad knee. She had to pull out of several films, causing claims to be made against insurers.

That, in turn, made Kidman almost uninsurable and put her career in jeopardy.

Binges and Insurance

On the other hand, if a star is struggling with drug and alcohol abuse, their binges can lead to disrupted shooting schedules. So, as an actor develops a bad reputation, they become more expensive to insure. Some famous examples include Owen Wilson, whose substance-abuse issues contributed to the suicide attempt that derailed production on major films; Iron Man star Robert Downey, Jr; and troubled actress Lindsay Lohan.

Of course, the vast number of actors and actresses working today are not only injury-free, but responsible as well. Film insurance, like health insurance, auto insurance or any other kind of policy, is designed to prepare for risk.

Fortunately, in most cases things go off without a hitch — which is one thing that movies and real life have in common.