Boxoffice-May.03.1952

ARE YOU COVERED?
An Insurance Executive Advises Exhibitors
To Secure a Balanced Protection Program
By Obtaining Free Survey Service
0. K. MacDonold ii president of the insurance firm
of D. K. MacDonold & Co., Inc. In this article he
points out a number of risks which may be overlooked
by the theotreman.
by D. K. MacDONALD
I HE INSURANCE POLICY has yct to be
issued which will underwrite all the risks
of theatre operation. The showman, however,
can buy protection with his insurance
premiums against nearly every conceivable
risk of business ownership.
The real limitation is in the amount of
money which he can afford to spend for
such coverage. Striving for complete protection,
he could conceivably "insure himself
out of business." Confronted by a bewildering
assortment of policy coverages
he might, on the other hand, decide to forget
the whole business and assume his
risks himself.
BASIC KNOWLEDGE NEEDED
Though understandable, neither of those
reactions provides a solution to a problem
which is closely related to the owner's continued
business survival. The theatre owner's
position can be compared with that of
a shopper who walks into a modern food
store—and finds all the labels printed in
a foreign language! Without some basic
special knowledge, he cannot make an intelligent
choice, to select only those labels
which will meet his individual needs.
The amount of money spent for insurance
by no means indicates the degree of
protection which you enjoy. The possible
occurence of some of the risks against
which you are insured may be exceedingly
remote. Or the risk itself may not be too
consequential. At the same time you may
be unknowingly exposed to another much
more serious risk which could wipe out
your entire business investment. Your insurance
program would therefore be critically
out of balance.
TAKE UP PROBLEM AS A WHOLE
A wise first step toward achieving a
balanced insurance program is to turn
the entire problem over to an established
reliable insurance firm. The piecemeal
method of buying your car insurance from
one relative, friend or customer and your
fire and liability policies from others, rare-
ly gives balanced protection. When building
a house you do not first build one
complete room, then add other rooms
singly until the house is completed. You
have a master plan which you follow from
beginning to end. The wise theatreman
plans his insurance program the same way.
Most of the large agents and brokers
provide an insurance survey service in
which they answer all the questions which
pertain to your individual needs. This
service is free and provides you with the
peace of mind of knowing that the insurance
program you carry Is the right one
for your business needs.
MANY RISKS
OVERLOOKED
After giving your insurance problems to
an agent or broker your responsibilities to
your own interests, however, by no means
end. The test of any program is its ability
to protect you against losses (1) which are
viost likely to occur, and (2) which you
can least afford to bear. It is up to you to
see that this protection is provided.
Virtually every operator is insured to
some extent by the more common forms of
fire, theft and liability coverage. But there
are other risks as well, to which he Is
equally vulnerable. In most cases, neglecting
to insure is due simply to lack of
knowledge of lesser-known exposures. Following
are some of the items which are
most commonly overlooked in many insurance
programs:
1. TENANT'S IMPROVEMENTS: The
theatreman in a leased building often
makes improvements such as a new loge
section, special lighting and plumbing installations,
restrooms, etc. While the landlord
carries his own insurance on the
building property he owns, he cannot be
expected to insure such improvements. In
case of fire, the loss is the tenant's.
2. USE AND OCCUPANCY. This coverage
protects the owner of a business
whose quarters are destroyed, by reimbursing
him to the extent of his regular monthly
income plus stated fixed expenses until
he is able to resume operations. With all
other losses accounted for, there is still
the question of what you are going to live
on for the two, three or six-month period
required to get back into business. Such a
policy can also take care of Interim salaries
for key employes.
3. LOSSES FROM CRIME. It is not
commonly known that burglary insurance
does not cover theft without visible, forcible
entry. Should you leave hurriedly
some night and leave the back door unlocked
or a window open, thus admitting
a thief, the crime is not burglary, but
theft. Most theatre owners carry only
burglary protection. What do you carry?
4. INFIDELITY OP EMPLOYES. The
next time you read the newspaper look for
losses of this type. They take place every
day. In most of the losses, you will find
that the offender was a trusted employe
with many years' service with the firm.
5. HOLD HARMLESS AGREEMENTS.
The owner of a theatre in a leased building
will usually protect himself from damage
suits resulting from his own fixtures and
equipment. Few tenants, however, realize
that they are also probably liable for damage
traceable to defects or deterioration of
the building. Most leases contain a "hold
harmless" clause which absolves the owner
of liability for such damage. If a cornice
of the building should fall on a passerby,
or if a water main installed by the building's
owner should burst and damage adjoining
property, the tenant under a "hold
harmless" clause is liable for the damage.
The cost to settle the claim can run to a
sizable sum, plus legal fees.
6. PROPERTY DAMAGE LIABILITY.
This is often overlooked as it is not understood.
We think of property damage in
terms of someone's clothes being torn on a
counter or other piece of theatre equipment.
Actually, the most common cases
of this sort arise from a fire in the owner's
premises which spreads to the adjoining
premises. Though the owner of the
restaurant or soda fountain next door may
be fully covered by insurance, his losses
will be promptly paid by his insurance
company which will in turn sue you to
recover their loss if you are liable for the
fire. If neglect can be proved, damage
suits resulting from fire losses to one or
more adjoining buildings, could quickly
wipe the theatre owner in whose building
the fire started, out of business.
7. OTHER LIABTLITY. Other types of
liability to which the theatre owner is exposed
include many which individually are
not too likely to occur. Taken collectively,
the risks are formidable. The best solution
is to take a comprehensive liability
policy, which will protect against almost
all risks of third party liability.
All these risks by no means confront
every operator, nor to the same extent,
but they should all be considered in laying
out your insurance program. The extent
and types of coverage you need can
then be determined intelligently according
to your special needs, within the limitations
of your insurance budget.
64 The MODERN THEATRE SECTION