It’s by no means a common peril, but the significant publicity and financial loss generated by the stagehands’ strike on Broadway and writers’ strike in Hollywood has some businesses asking about availability of that seldom-sold coverage: strike insurance.
“It’s certainly something we’re talking about more,” said David H. Paige of DeWitt Stern Group Inc., a New York insurance brokerage that caters to the entertainment industry. “We’ve fielded a lot of inquiries.”
Considering the economic loss created by the 19-day strike was estimated at over $2 million a day, it’s no wonder area businesses would be interested in such a policy, he said.
Strike insurance, sold through specialty underwriters, typically pays for a business’s expenses, payroll or lost income caused by a work stoppage. To be eligible, a business cannot have a hand in a labor contract negotiation or outcome, but must be directly affected by it. Broadway producers, for instance, are ineligible; but the hundreds of Manhattan restaurants within walking distance of the theaters are.
The problem is that it’s so rarely sold, it doesn’t draw much attention. “In terms of it being a typical add-on, it does not exist,” Paige said.
Still, that doesn’t mean people aren’t looking for it. Since early summer, when rumblings of strikes first started in New York and California, Dewitt started fielding phone calls about the coverage, Paige said.
Of course, a lot of the interest in strike insurance came because a strike seemed so imminent. Typically, when a strike seems probable, the coverage cannot be sold.
“When Broadway is about to go on strike everyone wants that coverage,” said Bill Hubbard, CEO of HCC Specialty Underwriters in Wakefield, Mass. “But then it’s too late.”
HCC sells strike coverage as part of a specialty policy for event planners. The coverage will pay for any losses caused by a labor strike that affects an event.
Still, even given the interest generated by strikes, neither Hubbard nor Paige sees much of a market for it.
“People would only want it in a year when a labor agreement is up and there may be a heightened risk of strike,” Hubbard said. “It is something that a market would look at, but would probably be too expensive.”
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