The Riskiest Movies

by Elaine Schwartz    •    Feb 17, 2012    •    626 Views

Because Bart the Bear was no ordinary bear, anytime he appeared in a movie, the cost could have been $250,000. Yes, Bart’s salary was pricey but the $250,000 was all about insurance.

Most producers and movie studios require insurance. For stars, for delays, for injury, even for a Screen Actors Guild strike, insurance diminishes the risk. As a production cost, it can equal 1 or 2 percent of the film’s total expenses.

Based on insurance estimates, “The Girl With the Dragon Tattoo” was the riskiest movie last year. Other very risky movies included “Salt” in which Angelina Jolie did her own stunts and “Into the Wild” because of its rough terrain and animal actors.

Some insurance examples? When John Candy died while filming “Wagons East,” the movie makers received $10 million. Knowing that Nicole Kidman had a bad knee when she made “Cold Mountain,” insurers insisted on body doubles for any scene that would stress her knee. For actors who have been in rehab, premiums tend to be higher or unavailable.

As for Bart, one insurance executive explained, “If you have a bear from the zoo, he’s worth whatever a bear costs, maybe $5,000. But if a bear’s trained and pretends to attack on command, then he’s worth $250,000.”

Our bottom line? Price. Designating a specific amount gives objective value to risk.

The Economic Lesson

Prices convey information. Even if you had never heard of Bart, hearing his $250,000 insurance price tag would tell you that he was not your average bear.

An Economic Question: If you could, as a student, how might you insure yourself when you take a test?

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