What if . . . I owned a theatre?
4 June 2009
A tiny English theatre, believed to be one of the smallest in the world, sold at auction earlier this year for £130,000.
The Tom Thumb Theatre in Margate, Kent, which has a stage measuring just seven feet by ten feet, has only 60 red velvet seats. The curtain fell for the last time in 2005 but actress Frankie Jordan, who put in the winning bid, plans to re-open the venue as a community theatre.
Have you have ever dreamed of owning your own theatre? If the show is to go on, there is some important insurance coverage to sort out behind the scenes.
Bespoke insurance for bespoke business
Sue Moseley, entertainment and special risk manager at Robertson Taylor, a subsidiary of Lloyd’s broker Oxygen, says that running a theatre is unlike any other business and needs bespoke insurance cover. Here’s her script.
One theatre's property risks are different to another’s, she says: “Each theatre needs a tailored policy to cover their specific needs. No two are the same.
"Items such as scenery, lighting and equipment, costumes, etc need to be considered.” Also, some theatres are listed buildings, so a policy needs to take this into account as the rebuilding costs are likely to be higher, she adds.
General liability
There are specific general liability risks associated with running a theatre as well. There are two aspects to this: the risks carried by the owner of the theatre and those carried by the production company. Each party should check what responsibilities are provided for in the contract, Moseley advises.
“For short runs, it would be likely that the onus is on the owner to make sure the venue is fit, proper and safe - no loose carpets, that sort of thing.
"However, for longer runs there may be some responsibility on the production company to monitor maintenance of the property,” she points out.
Third parties and downtime
There is also the issue of sub-contractors who may be coming in and out of the building on specific jobs. Again, the contracts should be clear as to where responsibility lies.
Other insurable risks that are crucial to a theatre relate to those times when the show simply can’t go on, for whatever reason. From a business interruption perspective, policies again need to be tailored, Moseley says. “A fire or damage which closes the theatre for a number of days can be financially catastrophic.”
Theatre owners and production companies also need to consider what would happen if costumes or scenery are damaged and it’s not possible to continue with performances.
Cast gone AWOL?
A missing member of the cast could be a problem. However, from a non-appearance perspective, there’s a lower risk of business interruption because all plays have understudies. If the star of the show is unable to appear, the company should have contingencies in place. This is different to a tour, where people are paying to see a specific performer.
Do theatres really need terrorism cover?
Theatres are public places and as such are vulnerable to terrorist attack. “Theatres should always buy terrorism coverage and make sure they are covered for both 'threat of terrorism' as well as a terrorist incident,” Moseley advises.
Not all policies provide the same protection, she stresses, so theatre owners should identify specific contingencies. The police may close an area if they believe there is a terrorist threat and so owners need to consider the possibility of having to cancel a show and refund tickets: it may be difficult to reschedule a date because theatres are usually booked well in advance.
So before succumbing to the smell of the greasepaint and the roar of the crowd, make sure you have the right policy for your venue. Insurance isn’t very showbiz - but you won’t keep the lights on without it.
Last updated on 04 Jun 2009
