Following the death of Star Wars actress Carrie Fisher, Disney set to cash in $50 million insurance policy
Insurers at Lloyd’s of London look set to pay out the market’s biggest ever single personal accident insurance claim following the tragic death of Star Wars actress Carrie Fisher, according to The Insurance Insider .
Sources said that Disney had taken out $50mn of so-called contract protection cover as insurance for the event that Fisher was unable to fulfil her obligations to act in the new Star Wars films, with the policy now likely to be triggered.
Insurance on stars like Fisher protects against the risk that stars will not be able to film due to sickness, injury or death. Producers insure their stars because having an actor unable to film can cost them hundreds of thousands of dollars a day.
Guilds and union also have rules requiring payment for the crew even if filming is delayed by an actor. Location fees and equipment rentals also add to the cost of a delay. According to The Hollywood Reporter, a delay of just one day can cost up to $250,000 for a big-budget film.
Specialist insurance brokers help producers find coverage for their stars, even those who may be deemed “high-risk” due to issues in their personal life which may or may not have been published in the media, such as substance abuse. Before cover can be put in place stars have to undergo a medical exam and complete a questionnaire that asks them everything from do you ride horses and do you fly airplanes, to how often do you drink and do drugs?
Most of the stars are honest on these questionnaires because they sign an affidavit that gives the insurance company the right to sue them if they lie. The affidavit typically covers the last seven years. In addition to this, insurance companies like Lloyd’s of London keep their own confidential files on stars, which contain media clippings and other information they might want or require at the point a claim is made.
Fisher died on Tuesday (27 December), four days after she suffered a heart attack on a flight between London and Los Angeles. The actress rose to prominence in the late 1970s, playing Princess Leia in the first Star Wars trilogy. She reprised the role last year in Star Wars: The Force Awakens, a runaway success which took $2.07bn at the box office.
Filming for Star Wars Episode VIII, which will be released next year, was completed ahead of Fisher’s death. Princess Leia was again slated to have a major role in Episode IX and it is not clear how Disney, which owns the Star Wars franchise, will choose to respond.
According to its website, Exceptional Risk Advisors is a specialist in high-limit specialty life, accident, and disability products, with underwriting authorities from Lloyd’s insurers that exceed $50mn per individual risk. The Lloyd’s personal accident market has become increasingly crowded in recent years with dozens of managing agents now writing the class, which is seen by many as a good diversifying specialty line.
The 2016 underwriting year has already proved challenging for personal accident writers at Lloyd’s, with at least one other major claim in the market and rates subject to sustained pressure.
The risk that an actor could say break his or her ankle on set and hold up production for a couple weeks, like Robert Downey Jr. did on the set of Iron Man 3, is what is known as a “standard or covered peril.”
The policy was underwritten by Exceptional Risk Advisors, but if the policy triggers the loss will be entirely borne by capacity providers in Lloyd’s, with Enstar subsidiary Atrium the lead on the facility.
Sources said that the claim would be widely spread within the Lloyd’s personal accident market, with more than 20 carriers on the binder. However, the loss would cause substantial damage to the 2016 underwriting result for the segment, with some Lloyd’s insurers writing personal accident books with $10mn or less of annual premiums.
Previous claims include when Paul Walker, star of The Fast and Furious films was killed in a tragic car accident. The filmmakers and studio executives found themselves struggling with a difficult dilemma – an unfinished film with Walker’s remaining scenes still to be shot.
Their options: dump the footage and start over with another actor, eliminate his character altogether or rewrite critical scenes and use a body double, superimposing Walker’s face digitally to complete the film. Any route would prove costly.
Universal pursued the same solution it used on Gladiator when actor Oliver Reed died of a heart attack during filming in Malta. The insurance company allowed Director Ridley Scott to shoot Reed’s remaining scenes with another actor with all changes totaling an estimated $25 million (13 years ago.)
Since Reed’s character was critical, the script was rewritten for the character to die, body doubles were used, Reed’s face was superimposed digitally and it cost the studio anywhere from $3.2 million to $5 million depending on who you talked to. The film won the 2000 Academy Award for Best Picture and was dedicated to Reed’s memory.
In total, three people took turns in handling Walker’s role, two of which are actually Paul’s brothers and another one being an actor of similar height and physique. The employment of three individuals to cover the role of one person, as well as the associated cost for creating a believable CG version of Walker’s face all added to production costs.
The amount of time that was spent halting production while figuring out how to handle the film without Walker added around $1 million a week to the production costs. Between the new actors, the CG, delays and other associated costs, increased the film’s budget by 25% from its original $200 million to $250 million.
According to The Hollywood Reporter, the exorbitant insurance claim on Fast and Furious 7 was due to an “effects-packed 13-week shoot that will culminate with an enormous crowd scene using 600 people in Rosamond” near Bakersfield, Ca. At the time this claim was expected to be in the region of $50m plus.