Film-Tech Forum ARCHIVE: Theater insurance

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Posted by Christopher Lani (Member # 7952) on 05-04-2016, 12:43 AM:

I have a very pragmatic question about insurance. I one of the owners of a 405 seat art deco theater in Nevada. I believe we are way overpaying for our insurance and was wondering if anyone has had positive experiences in this area. I am looking for all of the aspects of insurance that are required. Everything from liability to what you have to be carrying for the mortage. Any input would be very helpful!

Posted by Mike Blakesley (Member # 26) on 05-04-2016, 12:01 PM:

I think there are far too many variables in play to come up with an "average" cost for insurance, but you should have "replacement value" on your building/equipment for sure. Get some competing quotes.

In my opinion it's also very valuable to do business with an agent that's nearby. Ours is actually just down the street from the theater, and we've had the same agent for over 25 years. This lady knows our building, equipment, environment and business, so I don't have to go through a lot of rigamarole in the rare instance we have a claim or a question.

Posted by Frank Cox (Member # 6258) on 05-05-2016, 05:24 PM:

For the first twenty years or so that I had my theatre, I always purchased insurance from an insurance agent here that sells insurance for a wide variety of different outfits. My understanding is that he put my account out for bid between the different outfits that he sells insurance for, and then took the lowest bid that he got back. Since a movie theatre is apparently an unusual thing to insure, over the course of years I had insurance issued by an outfit whose primary business was insuring grain elevators and even from some outfit that I think was headquartered in China.

There is another agency in town that sells insurance only for one single company called The Cooperators. It's a cooperative thing that's owned by co-ops and credit unions. I went there last year to get a quote on my insurance and discovered that I would save about $800 per year by purchasing my insurance from them instead of through the other outfit that kept putting my insurance out for bid.

It seems a bit peculiar that I can get a saving on insurance by purchasing it from one single company instead of by having it put out for bid each year as was previously happening, but that's the case. I guess I should have checked with The Cooperators a lot sooner.

You're in the USA so that experience isn't directly applicable to you but my point is to shop around with different agencies and don't just assume that when one guy says he'll put it out for bid that you'll automatically get the best deal that way. That's what I did for years and obviously it was a mistake.

Posted by Mike Blakesley (Member # 26) on 05-05-2016, 05:45 PM:

We actually have two agencies in town. We used to be insured with the other one, but one time out of curiosity I asked our current agent for a quote. It was very close to the amount we were paying with the other agent, but the current agent was a frequent moviegoer so we switched over. Have had good service ever since so there's no big reason to shop around.

Posted by Andrew Thomas (Member # 7000) on 05-06-2016, 07:29 PM:

Our 4 plex and drive in have fairly similar replacement costs, but our drive in is outside of the city limits and so we don't have things like fire hydrants close, so the drive in is literally 3 times more expensive on insurance.

Posted by Louis Bornwasser (Member # 3063) on 05-07-2016, 09:26 PM:

There are many things that influence insurance costs. You need a certain amount of coverage, but no extra. Lowering coverage or allowing a high deductable can radically influence the bill.

I think a one time cost for an industry consultant is probably worth it. I fully expect theatres/cinemas to be unnecessarily charged high rates. By law the buildings are fireproofed and probably have sprinklers, so fire is not much of an issue. Exits are controlled by law. Liability may be more of a problem.

The problem is that agents have heard the horror stories about "400 dead" in old opera houses converted to film. No modern building is much of an issue.

Posted by Leo Enticknap (Member # 534) on 05-21-2016, 11:22 PM:

You would have thought that they'd use hard, actuarial data rather than horror stories when coming up with premium quotes. How many claims have there been from movie theaters, what has been the cause of those claims, are those risk factors especially present in the business that is asking for a quote, etc. etc. As long as your fire precautions and emergency exits are up to code and properly maintained, I wouldn't have thought that this was a particularly high-risk business.

Out of interest, it would be interesting to know how much theater insurance went down following the conversion from nitrate to safety, or if, from the early '50s onwards, insurance policies started to include a "no nitrate in the building" clause.

Slightly OT but sorta relevant: back in the '90s I went to a local insurance brokerage for a quote to renew my car insurance. When I gave my occupation as "projectionist," she asked me if I could legitimately say anything else. My formal job title at the time was technical manager, so I asked her to try that. When she made the change, it reduced the quote by over £200 (this was in the UK)! She explained that on the actuarial tables, "projectionist" was listed among the top 20 highest risk professions for auto insurance: statistically, they were many times over the average more likely to cause serious accidents, most of them in the middle of the night when driving home after a long shift.

Posted by Randy Stankey (Member # 64) on 05-22-2016, 02:37 AM:

quote: Louis Bornwasser
The problem is that agents have heard the horror stories about "400 dead" in old opera houses converted to film. No modern building is much of an issue.

Yeah... but we're DIGITAL now! Right? [Wink]

I'll shake the hand of anybody who can make a digital movie catch fire. [Wink]

Posted by Frank Cox (Member # 6258) on 05-22-2016, 02:57 AM:

Hard drives have been known to catch fire. It's rare but it has happened.

Posted by Randy Stankey (Member # 64) on 05-22-2016, 12:37 PM:

But...but...but...it's DIGITAL...

Isn't anything that's digital supposed to be bigger, better and more fireproof than anything that's not digital?

Posted by Rick Raskin (Member # 1561) on 05-22-2016, 05:03 PM:

Circuit boards are also susceptible to fire.

When I was a test engineer we had a requirement for all equipment to be NEBS compliant, meaning that any fire would be self extinguishing and be confined to the immediate housing.

I did have an instance where an in service board caught fire but all of the NEBS requirements were met. For that instance people showed up for the post mortem that I thought were long dead. In the long run the vendor had to do a redesign to replace a faulty component.

No, digital is not failure proof. But I'm preaching to the choir.

Posted by Randy Stankey (Member # 64) on 05-22-2016, 08:05 PM:

It's possible to make water catch on fire, too. [Wink]

Yeah, I get it. My point is that many people always seem to talk as if digital is the cure-all to every problem yet, simply because you use the word "theater," they suddenly act as if all theaters can spontaneously combust at any random moment.

Since nearly all theaters are digital, now, that kind of self contradiction shouldn't exist... But it still does. [Frown]

Posted by Louis Bornwasser (Member # 3063) on 05-23-2016, 06:13 AM:

Assuming the cinema was built to code, it is nearly impossible to ignite. Insurance claims of the past couldn't happen much now. What would the bad guys set fire to?

Posted by Alan Plester (Member # 852) on 05-23-2016, 07:07 AM:

Slightly OT but sorta relevant: back in the '90s I went to a local insurance brokerage for a quote to renew my car insurance. When I gave my occupation as "projectionist," she asked me if I could legitimately say anything else.

Leo that happened to me for years, it was always the answer they gave to you, my reply was, your providing the insurance you put whatever you think is legally correct and will not detriment the cover, I am what I say I am, and nothing else, got cover, but always with cinema projectionist written in, bar once, when it came back as, cinema employee. I think now, the employment categories have been widened.

Posted by Steve Wilson (Member # 2411) on 06-02-2016, 12:27 AM:

Insurance is like this! 25 years ago, the local Chamber of commerce put on a parade and festival. Insurance was $250 per year, then $350 the next year, then $450 and then the next year it went to $2800! In checking with the State of Indiana. No community Festival or Parade had had a lawsuit brought against them. We ran with out that year and the next year the price was back to a more normal range!

Posted by Randy Stankey (Member # 64) on 06-02-2016, 03:00 AM:

It sounds like a similar situation to that $24,000,000 book from Amazon.
(i.e. Algorithmic pricing where no human is monitoring the actual price.)

Posted by Andrew Thomas (Member # 7000) on 06-02-2016, 03:55 AM:

I just got the general liability insurance quote for my new 8 screen dine-in location. Just the booze rider is more than either my 4-plex or my drive in. Jeez.

Posted by David Buckley (Member # 2600) on 06-02-2016, 07:28 PM:

We've just changed our insurance supplier, saving a big chunk of premium in the process, our new policy, which is a "standard" policy, has some odd mandatory inclusions and exclusions, one of the odd inclusions being that we are covered for up to $50K repairs to our water craft...

Posted by Ron Funderburg (Member # 4561) on 07-02-2016, 01:37 PM:

Insurance, what a pain in the … Yeah, you must have it, required by law. You seldom use it; on little stuff it is just easier to buy what you need avoid filling a claim. But when you really need it you better have it.

Posted by Frank Cox (Member # 6258) on 07-02-2016, 03:06 PM:

As far as I know, insurance isn't actually required by law except in the case of vehicles that you drive on public roads.

Most mortgage issuers require that you have insurance in place that names them as the beneficiary.

Posted by Ron Funderburg (Member # 4561) on 07-02-2016, 03:14 PM:

Some states require liability insurance, slip fall. Every state requires workman's comp

Posted by Christopher Lani (Member # 7952) on 08-01-2016, 11:43 PM:

Sooooo. We are still looking for anyone that does insurance for theaters at a reasonable rate. Any actual names or ideas? I am looking into the Cooperators.

Posted by Frank Cox (Member # 6258) on 10-17-2016, 05:23 PM:

So I got my insurance bill this year from The Cooperators and it had increased by 7.2% over last year.

Humph.

I think that once these outfits figure they have you on the hook they then start jacking up the rate.

I went to the other insurance agent in town where I used to get my insurance and asked him for a quote. And then I went to The Cooperators office and complained.

The Cooperators agreed to put the rate back to what it was last year, so I got several hundred dollars off on that bill by going to their office and whining. I told her that I had put my insurance out for bid again so I would get back to her after getting the other bid.

I just got the other quote a few minutes ago and it is almost exactly DOUBLE what The Cooperators billed me for!

Leapin' lizards!

I'll be going back to The Cooperators office to pay them shortly.

Posted by Mike Blakesley (Member # 26) on 10-19-2016, 12:51 AM:

We've been with the same insurance agent since about 1987 or so, but have been insured by several different companies. Our agent works with various companies so they shop around for the best rates.

I've only had a small handful of random claims over the past 30 years (hail damage to the roof, a screen damaged by a patron, and a lady slipped'n'fell on ice out front) and never a problem with a claim. The best was, when our server went down a couple of years ago, our technician said there was a high probability that it was due to an electrical storm we'd had on the night of the problem. I happened to run into the insurance agent at the bank the next day and told her we were closed for a few days due to an equipment problem...she asked me what had happened and after I told her, she informed me that we had an equipment-damage clause on our policy that would probably cover the server. I didn't even know we had that, but it paid for 90% of our new equipment. So needless to say, I'm a customer for life at that agency, plus it's just another thing that shows it's good to do business locally.