To insure or not -- that is the Lohan question

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"To insure or not to insure?" It isn't Shakespeare, but it is the dramatic question Hollywood filmmakers are asking about Lindsay Lohan following her legal troubles this week.

It is an important question, too, because whether companies insure Lohan's future movies may determine whether she will quickly fall off Hollywood's A-list.

But Lohan fans have little to fear because no actor is uninsurable, say underwriting experts. While some producers may balk at conditions for hiring problematic stars, experts say that unless an actor is serving time in prison, even the most volatile can be covered -- albeit at a high cost.

"For a price, anything can be done, although an insurance carrier can make things so unpalatable that at times the makers of the film just won't be interested," said Ross Miller, partner with insurance brokerage D.R. Reiff & Associates Inc.

Lohan's arrest this week in Los Angeles on suspicion of drunken driving and cocaine possession has left Hollywood wondering if the actress, who shot to fame as a child in Disney films like "The Parent Trap," is too risky to cast in a film.

It remains to be seen whether her latest relapse and brush with the law will cost her a role in "Poor Things," a film produced by and starring Oscar-winner Shirley MacLaine.

A statement was expected early next week on whether the movie, already delayed this spring due to an earlier rehab stint by Lohan, will proceed with or without her.

Insurance experts say the industry has long dealt with similar situations, although they may seem more frequent with the recent heavy media scrutiny of Lohan and fellow troubled party girls Paris Hilton and Britney Spears.

"I don't think it (a problematic artist) is any more of an issue," said Wendy Diaz, entertainment underwriting director at Fireman's Fund Insurance Co., the leading film underwriter. "It's pretty standard year to year."

But Diaz did say the terms for covering Lohan would likely be "serious at this point."

She said Fireman's Fund, in such a case, would likely put in higher deductibles, or ask the star to put their salary into escrow to pay for any losses if production was disrupted.

Last July, a producer on Lohan's last film, "Georgia Rule," scolded her publicly for repeatedly showing up late on the set, costing the movie's makers hundreds of thousands of dollars.

Brian Kingman, a managing director with entertainment insurance broker Aon/Albert G. Ruben said covering situations like Lohan's required a lot of calculation and risk management.

Insurance rates for errant actors can range anywhere from 1% to 3% of a movie's production budget, which can range from $5 million to $100 million or more, he said.

"Filmmakers fall in love with certain actors for certain roles and my job is to find risk-takers to take on the risk," Kingman said.

He said actors were always required to undergo a medical exam before getting insurance. In certain circumstances, drug screening is conducted and actors are required to provide blood and urine samples. In cases of known drug abuse, "minders" are sometimes required on set to keep an eye on the actor.

Kingman said he had even helped craft policies for actors in the event they risked the possibility of incarceration.

"I have been successful in finding and creating incarceration coverage for certain actors on probation which can be revoked if they break certain rules," he said, citing the case of Robert Downey Jr., another high-profile star with a history of legal, drug and alcohol problems.
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