What are Entertainment Captives?
Entertainment Captives are specific Insurance that is tailored to the unique Entertainment needs. For example in an interview with David Letterman, Robert Downey Jr. mentioned that he was forced to take out a very expensive (60% or salary) Insurance policy to cover liability from his poor personal choices and the filmmaker did not want to be liable in the event he would not fulfill his obligation. Because the insurer did not have a specific vehicle and experience for this type of insurance the cost had to be bloated. It is likely his costs could have been less while the filmmaker's risks were still mitigated using an Entertainment Captive.
What is Captive Insurance?
Captive Insurance (known as “Captives”) are insurance vehicles that were developed out of unique needs that traditional Insurance providers are not able to efficiently or effectively provide. Captives are in essence a way to “self insure” while still maintaining risk separations within the organization. As the business climate faces more unique and in some cases catastrophic events, Captives are gaining in popularity for the risk mitigations and the possible tax advantages they offer.
Who Needs Entertainment Captives?
Sports, Entertainment, Leisure, Lifestyle, etc. all have specific risks not applicable to other business sectors. Examples such as public personalities being magnets for bad actors, litigation, or “hangers-on” coupled with unique personalities and rights management. As this business landscape continues to explain it can also draw Entertainment Captive Insurance that is specific to the entertainment industry.