insurance

6 times 'no-show insurance' takes a star role

Lady Gaga's $25 million hip injury
Lady Gaga's $25 million hip injury © Jaguar PS/Shutterstock.com

When Lady Gaga suffered a hip injury during the North American leg of her 2013 "Born This Way Ball" tour, promoters had to cancel the remaining 22 shows and refund 200,000 tickets worth an estimated $25 million, making hers perhaps the most expensive hip surgery in history. There were also contractual obligations to settle with a touring cast and crew of 130.

Ted Tafaro, president and CEO of Exceptional Risk Advisors, an entertainment insurance broker based in Mahwah, N.J., says abandoning a tour is the least-attractive option for all concerned.

"Who gets hurt the most depends on how the deal is structured. Typically, the promoter buys non-appearance with a deductible of three or four missed shows, after which insurance would kick in," he explains. "The venue usually stands to lose the least because they typically can book something else in and reschedule the date. They're guaranteed their rental fee anyway."

Unlike Lady Gaga, ailing performers often are able to postpone, rather than completely scrap shows, Tafaro says.

"The good news for fans is, most artists try to tack on those dates during a gap or at the end of the tour to minimize the financial loss by rescheduling instead of canceling," he says.

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