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1945 Theatre Catalog, 4th Edition, Page 470 (444)

1945 Theatre Catalog, 4th Edition
1945 Theatre Catalog
1945 Theatre Catalog, 4th Edition, Page 470
Page 470

1945 Theatre Catalog, 4th Edition, Page 470

An Insurance Program for Theatre Owners

Coverage Property

A Consideration of the Types of For Full Protection of Physical

Insurance is a highly technical subject, but we will attempt to outline in a nontechnical, understandable manner the facts that any theatre operator should know about insurance.

An individual takes out insurance to protect him against a financial loss that he cannot, himself, afford to absorb. With few exceptions, there is no purpose in carrying insurance for any other reason.

The insurance program for any enterprise should be designed for that particular enterprise. To the operator of a single theatre, an uninsured loss of moderate size may seriously distort his operating costs, wipe out his profits, or even result in financial disaster.

The operator of a large number of thetres, on the other hand, should assume, himself, every risk that he properly can. Money spent for insurance premiums as a gamble is poorly spent, for the odds are two to one in favor of the insurance company.

There is no formula which can be produced to tell the operator of a theatre just what insurance he should carry. Selection of insurance should be based upon sound business judgment. The insurance of risks should be considered only in conjunction with the many other risks which a property owner leaves without insurance. To give a simple example: it seems inconsistent for a theatre owner to carry plate glass insurance if his losses due to falling off of receipts because of a rainstorm, which he does not insure, might exceed the cost of replacing a plate of glass. 4

Various forms of theatre insurance will be described as far as possible in the order of their importance


To a theatre operator, the most outstandingly important form is public liability insurance. It covers losses as a result of injuries to patrons or the public, occurring in or about or as a result of operation of the theatre.

The cost of this insurance is low. Legal expenses alone arising out of a minor accident may far exceed the premium for a number of years.

Losses under public liability insurance may in case of catastrophe run to substantial amounts.

The cost of adequate insurance is only fractionally greater than the cost of inadequate insurance. The additional cost of sufiicient insurance is not worth consideration in comparison to the risk. Limits of $25,000 for injuries to one person and $500,000 in any one accident should in our opinion be the minimum. Substantially larger limits are recommended.


Manager 0/ the Insurance Department. Paramount Pictures. Inc.

The form of policy under which this insurance is written is broad, especially if what is known as the comprehensive form is selected. It is not necessary to burden the theatre operator with a technical discussion of the policy form.

Theatre operation with its exploitation, tie-ups, sale of candy and popcorn, and its numerous activities involves many unusual risks, and a broad form is extremely important. Competent advice should be obtained to be certain that the policy covers these activities.


The theatre may own an automobile; may hire cars for transportation of material or persons; or theatre employes may use their cars on the theatre's business. In any such instances, the theatre may be held liable in case of accident. Automobile public liability insurance covering both direct and what is known as contingent liability should be carried.

Minimum limits of $25,000 for injuries to one person and $100,000 in any one accident should be carried.


This form of insurance is generally required by law. It covers the responsibility of the employer to his employes under the Workmens Compensation Law of the state in which he is operating.

As in the case of public liability insurance, there is no purpose in attempting to cover the technicalities of this insurance in this article. The insurance policy is standardized and there is little, if anything, that the average employer can or need do to improve his workmenis compensation policy.

There are, however, one or two precautions that might be mentioned here. Due to the fact that in case of vaudeville, bands, etc., there may be some uncertainty as to whether the performer is an employe of the theatre or an independent contractor, or an employe of the band or act, it is important that public liability and workmenls compensation insurance be placed with the same company. This prevents one company claiming that the individual is an employe and the other that the individual is an independent contractor, each denying any responsibility meanwhile.

What is known as occupational disease coverage should be carried. More and


more the workmenis compensation laws are being liberalized and more and more the compensation boards and the courts are interpreting the law in favor of the employe. At one time the law covered almost exclusively bodily injuries as a result of actual violence. Today, such things as poisoning by handling money, pneumonia contracted in a drafty dresse ing room, skin troubles scontracted from the use of cleaners, soaps, and disinfectants may be interpreted as coming under the law and the employer may be held liable. It is important that the employer be protected by insurance.


This form covers with respect to injuries to persons in connection with the operation of elevators.

One outstandingly important feature

lof this form of insurance is that trained

engineers representing the insurance companies make periodic inspections of insured equipment. The inspection service alone is generally considered worth the cost of the insurance. To an operator of a place of assembly this service is extremely important.

This insurance is a tmust" where there is an elevator.


These forms of insurance cover damage to boilers or machinery, to the premises, and to other property as a result of explosion of boilers, bursting of flywheels, damage to compressors, condensers, tanks, and the like.

Here, again, vitally important inspection service is included.


We have purposely listed busineSS interruption insurance ahead of fire insurance in order of importance. A minor fire may result in loss of business in excess of actual physical damage. The operator of the theatre may have very little investment in the theatre, but, particularly under conditions that prevail today, a fire may put him out of business for a considerable period of time. The forms of insurance in the general class of business interruption insurance are use and occupancy, rents, profits, and so forth.

Debunking the terms, it is actually insurance that will leave the operator in as good a financial position as he was before the fire occurred and will pay the profits that he would otherwise have earned, pay his taxes, rent, salaries of important employes who must be retained, in fact, all charges which continue even though revenue has ceased to

1945 Theatre Catalog, 4th Edition, Page 470