Industry Profile: Peter Tempkins
By Larry LeBlanc
This week In The Hot Seat with Larry LeBlanc: Peter Tempkins
Peter Tempkins has been an insurance broker, specializing in music, since 1987.
Tempkins spent 11 years with Haas & Wilkerson (1987-1998), starting in New York before moving to Nashville, and joining the DeWitt Stern Group as a managing dir., heading its music & touring division for 11 years.
In Jan. 2009, Tempkins and his Nashville-based team moved to Momentous Insurance Brokerage, headquartered in Van Nuys, California.
Momentous Insurance Brokerage is a full service entertainment-based firm specializing in designing insurance programs for high net worth individuals, film and TV productions, music and touring companies and artists.
The addition of Tempkins’ team considerably boosts Momentous’ already solid presence in the music and touring insurance practice.
Over the years, his team has worked on such music accounts as AC/DC, Alice Cooper, Crosby Stills & Nash, the Bee Gees, Stone Temple Pilots, Limp Bizkit, Redman, Steve Earle, The Jonas Brothers, The White Stripes and John Mayer.
As well, Tempkins has insured such events as the Amnesty International Tour (1990), Lilith Fair, Taste of Chaos, The Warped Tour, and Bonnaroo.
Does a young band need insurance coverage?
Yes. There are different types of insurance that young bands need. The first insurance that a band should buy is equipment insurance. The band has probably spent several years accumulating equipment. A band with $50,000 worth of equipment could insure that for $750. God forbid something happens to their equipment. Often they don’t have the money to pay for the insurance. But it is easier to go to their parents and borrow $750 than saying, Oh my, God, everything got destroyed, can you lend me $50,000?”
That’s why I say that equipment coverage is the first thing a band should buy. It is fairly inexpensive and it is a one-time thing. Equipment is their biggest investment. Let’s face it, they could be the next U2 but with no equipment, unless they are going to perform doo wop, they are done.
Once a band start touring their vehicle becomes a target for theft.
(Vehicle theft) happens at least a dozen times a year. Fill in the city. Vancouver, Boston….anywhere there’s a port. A lot of equipment gets shipped overseas immediately. “We were staying at the…..” Fill in the name of the hotel. “We were parked under the lights. We came out in the morning and everything was gone.”
As a full service broker, you write a fair amount of health insurance. Isn’t that coverage often overlooked by bands?
All the time, I hear bands say, “We can’t get health insurance.” It’s not that they can’t get health insurance. It’s that they can’t afford the premiums. Young bands are young and they feel invincible. They don’t feel that they are going to get sick. They feel that they don’t need coverage.
Bands are also short-sighted on car insurance coverage as well.
A lot of bands are driving around in a van with minimal insurance. The van is usually registered to one of the band members. If they have an accident with minimal insurance and (the policy is) in one of their names, the claim (against them) is going to be bigger than the insurance policy. And the band member will get a lien against his future income. What’s he going to do? File for bankruptcy and try to get out of it? If the band makes it, and starts getting assets, the members are going to be nailed.
What coverage do bands need by law?
Every state in America has minimal insurance requirements, and that is only for liability. I think the minimal insurance you can carry is 15/30. That’s $15,000 per individual with a $30,000 max. So if the band is driving down the road and they hit another vehicle and there are three people in that vehicle, the most the insurance company will pay for that claim is $30,000. So if three people get injured the same way, they each are going to get $10,000. If they sue for $100,000, the band has to come up with $70,000 or the individual who owns the vehicle might have to.
Then there’s workers compensation (also known as workman’s or workers' comp). Insurance that provides compensation medical care for employees injured in the course of employment.
The one policy required by law for any employer is workman’s compensation. The game a lot of people in the industry used to play—and it’s not as prevalent today as it was years ago—is (hiring on as an) independent contractor. “Oh, he’s an independent contractor; I don’t have to cover him for workman’s comp.” And often people want to get paid gross, not net, (like an independent contractor) because they are going to play games with taxes.
The problem is (roadies, production and road managers etc.) are an independent contractor right up to the moment they are injured.
The minute they are at the hospital and they are asked “What happened?” they will say, “I was lifting a road case, I dropped it and it fell on my foot.” The hospital asks, “Who do you work for?” “I work for…” Fill in the name of the band. They aren’t going to thump their chest at that point and say “I’m an independent contractor. Let me just whip out my check book and write you a check, Mr. Hospital.”
How many young bands have incorporated to ensure that they have coverage as a band?
Once they start getting income, and if they are writing songs, then they should set up a partnership or something. Then, as we move up the food chain, we start talking about general liability (coverage).
You go into a club in Sheboygan and you see this new band nobody has heard of before. The lead guy throws his sunglasses into the audience and they cut someone. The band is unknown and the person got cut. Big deal, who cares? Two years later, when the band is headlining arenas, the person suddenly thinks “Two years ago this guy cut me with his glasses. They’ve got money. I’m going after them.”
Isn’t there a statute of limitations for such incidents?
Different states have different rules on statute of limitations. The rules are also different for minors. If you were 15 when you snuck into this club and got hit, your statute of limitations, depending on the state, doesn’t start running until you are 18. Then you might have two years at that point (to file). So you could sue up to the time you are 20 years old for an incident like that.
That seems far-fetched.
Over the years, America has become lot more litigious. Our society has become one where the sentiment is, “Somebody has to be responsible for what I do because I am not responsible for what I do.” When I was 16, and if I came home from school and I said, “Mom, my teacher yelled at me today.” First thing my mother would have done would have been to clock me upside the head. The second thing was she would have asked, “What did you do?” The next day, we’d be at the school to find out what I did wrong. That’s not true today. The feeling is that somebody has to pay.
What questions do you ask those bands seeking coverage?
We ask questions like, “Are you doing pyro? What size venues are you playing? What are you doing about this or that?” It’s a whole litany (of questions) we go through. There are other brokers out there who don’t ask as many questions. While I can’t tell you everything the bands we work are doing on every day of the week, I have a pretty good idea of what they are doing out on the road because of the questions that we ask. We also go on websites and check things out.
Do you have to consider if the venues the bands are playing are adequately covered?
The problem is that when bands are playing clubs for a $250 or $500 play, it is very hard for us to get the club owner to give us certain things. When bands get bigger, and they playing larger venues, we can get (insurance) certificates from the promoters.
Insurance for $1 million (by a club) 9 times out of 10 is adequate. The problem is when you have a catastrophe, there’s never enough insurance. When there’s a catastrophe like what happened in Rhode Island, there’s never enough insurance.
Conversely, I still write AC/DC and, in 1991, when we had that unfortunate event in Salt Lake City where three kids died there was adequate insurance for everybody there. It was, of course, a horrendous experience.
In 1991, three fans were crushed to death at an AC/DC show in Salt Lake City, Utah. Of the 13,294 fans present, more than 4,400 had obtained general admission or "festival style seating"—in essence, no seating at all. In late 1992, AC/DC paid the families of the three deceased teenagers an undisclosed sum, following an out-of-court settlement. Other parties to the settlement included The Salt Palace, the concert's promoter and the company in charge of security.
The Rhode Island nightclub fire occurred in 2003 at The Station, a nightclub in West Warwick. A hundred people were killed. The fire was caused when pyrotechnic sparks, set off by the tour manager of the headlining band Great White, ignited flammable sound insulation foam in the walls and ceilings around the stage, creating a flash fire that engulfed the club in under six minutes.
In essence, you are insuring bands that are going into venues where anything can happen.
Yeah. But if there is an incident at the club, and we find out that the club doesn’t have insurance or they are being a pain in the ass then it gets real simple. We are such a small knit community. If they do this to a band that is being booked by CAA, the word goes out among CAA agents very quickly.
Do a band’s insurance needs go up with success?
When a band is really touring and making, even okay money that’s when it should get five policies. They should have general liability; worker’s comp; a business automobile policy; equipment coverage; and they may have excess liability or “umbrella” (coverage) which is a higher (liability) limit. Then with bands who get really big, there’s non-appearance coverage.
Would bands 20 years ago have had such extensive insurance coverage or is this something that has evolved over time?
The insurance has always been there. A lot of bands had it. A lot of smaller bands weren’t taking it. Now we are seeing more of these smaller bands taking it.
Would a big band 20 years ago have had insurance that was adequate?
Would they have had more than $1 million worth of coverage? Maybe yes; maybe not.
A lot of bands 20 years ago were just starting to understand non-appearance (coverage). Usually, they told the promoter they’d come back and play the next go-around for them. The promoter would bitch and moan and then he’d say, “Okay, fine.” Today, who knows if the band is going to come back and play? Promoters argue that they built up the band in the clubs and now that the band is big, there’s no loyalty. I hear these arguments all of the time.
Have you seen much of a change with corporations entering the concert promotion field?
It has changed. I don’t think I want to use the word radically. There are benefits and there are non-benefits from the changes. The benefits are that you have a promoter that comes in and says, “I want to play a band in these 40 cities. Let’s do one contract.” It’s easier (doing a tour). It is also easier if you know you have a point person at that one company. If I have a band and their tour is bought by Live Nation or AEG, we get one certificate of insurance for the whole tour.
Do you insure promoters?
I have several clients that are promoters --obviously, not AEG or Live Nation although I deal with a lot of people in those two companies.
Do the varied parties try to minimize their own coverage as much as possible?
No because the way that additional insurance works—which is the insurance we are looking for—is if the band gets sued for something that is a promoter’s responsibility, we want the promoter’s policy to defend the band. If the band does something—if the drummer throws a drum stick—I don’t want the promoter’s policy to pick that up. But if someone is walking to their seat and they slip and fall, that’s the promoter’s responsibly. So when the band gets sued I want the promoter’s policy to defend them.
With lawsuits often the venue, the promoter and the band are all sued.
That’s called the shotgun theory. (The strategy is) to sue everybody; somebody’s going to pay off. Rarely is a band libel under those conditions unless a member does something like throw a drumstick out or says “I’m lonely. Come on down and be onstage with me.” Nine times out of ten, with trip-and-fall type things, it’s the promoter’s responsibility.
When you insure festivals, are you working for the promoter?
With Bonnaroo, yes. We are working for the festival so it’s the promoter. On The Warped Tour, while it’s a festival, our client is the tour. That’s how it operates and how it is contracted. On The Warped Tour, there are several promoters that are clients and there are bands on that tour that are clients.
Is a festival complicated to insure?
For us to (insure) a festival, it’s fairly simple because we know how to do it. We know what to look for. Last year, three of us lived at Bonnaroo (in Manchester, Tennessee) for five days. We were there so we know what goes on.
What’s the importance of being on site?
We are an extra set of eyes and, if something happens, we are there. Is it good visibility and good PR for us, yes. More importantly, we are there if something happens.
What are the questions that you’d ask?
I break it down to 5th grade English. Who? What? Where? When? Why? And how? Then I ask about security and about medical. Once you fill in those blanks, I have a pretty good picture (of the event).
What insurance would a festival need?
It still breaks down to the basic 5 or 6 policies. General liability. Usually when you are doing a festival, you want excess limits. You need worker’s comp. You need a business auto policy. You need property coverage. You probably get into having crime coverage because there’s a fair amount of cash floating around. You may have event cancellation coverage.
How much would insurance coverage be for 3 day festival with 70,000 people expected per day?
There are a lot of factors. It would depend on what limit of liability you want and what type of music. Is there camping? There are some festivals that don’t have camping on site. So people camp off site and then it’s not the festival’s responsibility.
Music is a factor for determining coverage?
If you are doing a pop festival, it is going to be a lot cheaper than if you were doing a three day rap festival.
Rappers have complained of the difficulty getting coverage for events. Is that a fair assessment?
It will depend on who the artists are. It will depend on the venue and how they are going to run security. If you are worried about people bringing weapons in then you arrange, and tell everybody ahead of time, that everybody walking into this venue—front, back, side door whatever—is going to go through a metal detector. Everybody. No exceptions.
Is it more difficult to insure some acts if their lyrics espouse violence, or if their reputation scares authorities like Marilyn Manson?
I have worked with Manson in the past. I have no problem working with someone like Marilyn Manson. Because I know all of the players involved with Manson and I know what is real and what is not real,
A lot of times, for me, it comes down to the team around the act. I may not know Joe and the Bananas but I know his manager, his business manager, his production manager and his attorney. I know what they look for in people. So a lot of times I go in knowing the team around an act.
There seem to be less screwed up artists today…maybe Amy Winehouse.
We’ve done some work for Amy Winehouse. I’m not worried about what she does. I am doing liability and worker’s comp. Her issues are neither.
Most bands operate websites that also need to be insured.
You are talking about cyber liability which is something that we are starting to work on with a lot of our clients on. There are nasty people out there who will try to screw with an artist’s website.
What are some of the other issues with websites that need to be covered?
If the band is posting things, they could disparage someone. If they are selling things, there’s the issue of credit card protection. A band could post a picture without permission. There’s a whole slew of things still being considered as things evolve. Fifteen years ago, you were cutting edge if you had a fax machine.
Peter Tempkins can be reached at: email@example.com
Larry LeBlanc is widely recognized as one of the leading music industry journalists in the world. Before joining CelebrityAccess in 2008, Larry was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-89. He was also a co-founder of the late Canadian music trade, The Record. He has been quoted on music industry issues in hundreds of publications including Time, Forbes, the London Times and the New York Times.