Insurance is not a word usually associated with the power and glory of Hollywood—at least not to outsiders. To insiders, especially those involved in the behind-the-scenes decisions of who will be the stars and what movies will be made, it connotes a sine qua non reality of the entertainment universe. After all, once the media dressing is stripped away, what is the New Hollywood about other than minimizing risk? The stars are no exception to this rule. Sure, it may help a career to have talent, a well-connected agency, and a hot media image, but unless an actor can get insurance, he or she can't play a part in a major movie.
To begin with, movies that receive outside financing from banks or other sources—which nowadays are most movies—need a completion bond. This bond guarantees the financiers that they will be repaid the entire cost of the production (including script development, finance charges, and bank interest) if for any reason a movie loses one of its "essential elements." These elements, which often include the star and the director, are defined by the guarantor that sells the bond. In the case of Terminator 3,the producers bought a completion bond from International Film Guarantors for $2.54 million that named Arnold Schwarzenegger as an essential element. If Schwarzenegger had been disabled during shooting or had abandoned the film for any reason, IFG would have repaid the bonded cost, which was $181.6 million.
As it turned out, IFG won the bet and walked away with $2.54 million. Before a bond company will assume such a gigantic risk, however, it also requires the production to purchase cast insurance from another insurer, such as Fireman's Fund, AIG, or Berkshire Hathaway. These entities will reimburse the production if anything happens to the star. With Terminator 3, Fireman's Fund provided the cast insurance, bringing the entire insurance bill to $4.54 million. The completion bond company still has the risk that the production budget will spiral out of control—in which case it has the right to take over the production—but it transfers the risk of the star to the cast insurer.
Even if a studio uses no outside financing for a film—and therefore does not need to buy a completion bond—cast insurance is a requirement for a Hollywood movie. (This has been the case ever since the '20s, when Harold Lloyd nearly lost two fingers during filming and almost derailed a production.) Since both independently financed and studio-financed movies require insurable stars, the companies that provide this coverage have immense power. By setting the premiums prohibitively high for a star who has made past claims, they can relegate a star to Hollywood's near-dead status: the uninsurables.
Nicole Kidman is a case in point. Kidman injured her right knee during the filming of Moulin Rouge in Australia in 2000, which resulted in two claims for delays and a $3 million insurance loss. In 2001, she quit Panic Room after three weeks of shooting because of her knee, a decision that almost resulted in the entire production being canceled and a $54 million insurance claim. Fortunately for the insurer, the producers decided to continue with a replacement actress, Jodie Foster. Still, they had to pay $7 million for the delay and additional expenses. As a result of all these claims, Kidman's acting career was in limbo. When she was proposed as the star of Miramax's Cold Mountain, Lloyd's of London effectively turned her down by asking a 20 percent premium, which no movie could afford, while Fireman's Fund, after noting "we have really bent over backwards and taken risks on this that no one in the marketplace was willing to take," turned down coverage on the grounds that "the major fact that can't be changed is our paying three claims for this actress's knees over the years."
At this point, executive Michael Segal, who was a 50-50 partner with Fireman's Fund in the completion bond company IFG, engineered a solution. Kidman put a substantial part of her salary in an escrow account, which would go to the insurer if she caused any delay, and she agreed to wear a support bandage on her knee during the preproduction and filming of Cold Mountain (leading to false reports in the press that she had cosmetic knee surgery). For their part, the producers agreed to substitute a double for any activity, even bending down, that might stress her knee. With this deal, she got out of her insurance hell.
Providing coverage, however, is only the beginning of the insurance regimen. Insurers may require periodic medical examinations during shooting, including testing for illegal drugs, or even continuous medical treatment for some actors. (Kidman, for example, was required to take daily doses of medicine for her thyroid gland.) They also place stringent restrictions on what actors can do off the set—no motorcycles, surfing, or flying planes. As for what happens on set, the insurer analyzes every shot in the script for potential risks. Once the production starts, they also station hawk-eyed agents, called loss-control reps, on location to make sure that the stars are not put in harm's way. If a shot presents the slightest danger of causing an injury that might delay shooting, the reps bar actors from participating in them. Either a stunt person substitutes for the actor or the shot is changed to eliminate the danger.
Even when studios base their marketing campaign on stars performing the perilous stunts of their action-hero characters, the loss-control reps make sure these claims remain wholly in the realm of media make-believe. Consider, for example, the video game-inspired movie, Lara Croft: Tomb Raider—The Cradle of Life, starring Angelina Jolie outfitted in skin-tight action-toy garb. The hype of this sequel was that Jolie did "most of her own stunts" out of her own "edgy quest for danger." In reality, the insurer, AIG, was so strict that it did not even allow director Jan de Bont to be at the Luna Temple set during shooting because he had a prior leg injury. To avoid the possibility that he might slip on the set's wet floors, the loss-control rep had him direct the entire seven-day sequence via closed circuit TV from a remote location. The insurer took even more precautions with Jolie, the only cast member insured by AIG as an essential element, since even a broken toe could cost the insurer a cool $134 million. Her "edgy quest for danger" notwithstanding, no fewer than three stunt doubles substituted for Jolie, bringing the stunt-person budget to a near-record $1,894,662. (Click here to see the film's entire budget.)
Almost all the stunts were done by a second unit, which shot for 60 days while Jolie and the other actors in the principal unit were elsewhere. If a scene could injure Jolie, the loss-control representative watched to see that she was trussed up in a double-wired safety rig or hand-held by safety men in green spandex suits. The scenes were then scanned into a computer and the harnesses, wires, and safety men were digitally removed. Visual effects were also used to allow Jolie to safely battle a giant shark (she would punch away at a bag in a dry, empty studio and later a digital shark would be substituted). Such visual effects cost $13 million (which was just slightly less than the $13.5 million Jolie got for acting in the movie).
None of these insurance realities interfere with Hollywood's culture of deception as long as everyone on the set, including the stunt people, technicians, and loss-control rep, is "NDA-ed." Nondisclosure agreements prevent anyone involved in a movie from contradicting the PR claims used in media campaigns that fuse the celebrity stars with their heroic characters, such as the stories of death-defying feats they performed. Fortunately for the studios, such stretches—unlike the kinds of stretches that might result in a pulled tendon on the set—go largely unchallenged by TV interviewers.