LOS ANGELES - When Britney Spears takes the stage this December for the first of a heavily hyped 100-show two-year residency at Planet Hollywood in Las Vegas, the loudest cheers may come from her insurance underwriters.
Along with the sound engineers and roadies who help stage a concert, insurance underwriters play a large role in making sure a star can get onstage and grab the microphone. Insurers are also key during those times when stars do not show and concerts get cancelled.
On Wednesday afternoon, a Los Angeles jury found AEG Live was not liable in the wrongful death lawsuit filed by the family of late pop singer Michael Jackson, in a case where lawyers in court papers had suggested the damages could exceed $1 billion.
The fact that AEG Live found itself at the centre of the wrongful death suit had sent shockwaves through the music world in past months, with concert promoters as well as well-known entertainment insurers like AON/Albert G Ruben and Lloyds of London expected to beef up policies for acts they insure and potentially raise some prices.
Even though AEG was not held responsible, insurance experts believe the case has spurred the industry to re-think policies and find ways to prevent similar situations down the road.
The role of Dr. Conrad Murray, convicted for manslaughter for his role in administering a fatal dose of the surgical anesthetic propofol to Jackson, is already prompting changes, say underwriters. In the future, the star or his promoter may be required to carry separate insurance on his entourage.
"The biggest stars all have doctors and their own staff," said Lorrie McNaught, senior vice president at Aon/Albert G. Ruben Insurance Services Inc, a large entertainment insurance firm, which has handled many of the world's biggest tours over the last 12 months.
"If you have a security guard who winds up punching someone in the face or kills someone, who is responsible?
"Is it the artist, the bodyguard, the promoter? I think promoters will require stars to indemnify their own staff," said McNaught. "Even if AEG was not held responsible, I still think this case will make attorneys find ways to tighten contracts."
An attorney for Lloyds of London involved in the Michael Jackson case declined comment for this story.
The price of premiums also may go up, according to one concert producer who did not want his name used. Currently, promoters pay 3 per cent to 5 per cent of the value of the policy, meaning that AEG paid between $530,000 and $875,000 for the $17.5 million policy it took out with Lloyds of London for Jackson's "This is It" tour.
AEG, which had initially sought to collect on the $17.5 million policy after Jackson's death cancelled the tour, dropped a claim against Lloyds amid revelations in leaked emails that show AEG executives were concerned about his stability ahead of his planned London comeback tour.
Insurers routinely send doctors to do medical exams -- and occasionally hire investigators for background checks-- before placing multi-million dollar policies for the stars.