Friday, November 20, 2009

Should Rock Stars Get Professional Indemnity Insurance?

As our contemporary society gets more and more litigious, should Rock Stars – scapegoats du jour since Ronald Reagan ruled the free world – have professional indemnity insurance?

By: Ringo Bones

For those of us old enough to remember the PMRC Rock Music censorship debacle and the “frivolous” wrongful death lawsuit against Judas Priest, We – the music loving public - managed to reach a consensus back then that Tipper Gore’s PMRC is nothing more than a US Government scheme to misdirect the American public’s ire against Sen. John McCain, Charles Keating and the rest of the folks that brought us the Lincoln Savings & Loan Scandal of 1989. But does the “Parental Advisory Explicit Lyrics” warning label still hold enough political clout to protect Rock Stars against any liability pertaining to professional indemnity related lawsuits? After all, as professional singers / musicians they do fall under the legalese purview of professional indemnity, right?

Professional indemnity insurance is usually used to protect you – the practitioner of your chosen profession – from legal action taken for losses incurred as a result of your professional advice – i.e. what you say regardless of whether it is based on opinion or fact. Under existing law, professional indemnity insurance provides indemnity cover if your client (do fans and audience members count?) suffers a loss - either - material, financial or physical – directly attributed to negligent acts. Frivolous lawsuit or not, does this mean that Rock stars should be held accountable for what they say / preach?

But this does raise problems – especially when it comes to the fidelity of the playback medium that the artistic works of these so-called Rock Stars are delivered. Did Lady Gaga really said “F-F-F_ Her Face” when heard through a lo-fi audio playback system – especially when the medium is a highly compressed and somewhat not-so-pristine MP3 download? This is probably the reason why an overwhelming majority of record label executives are not so gaga when it comes to sound quality. Maybe it is all down to liability? – enough said.

Should Audio Gear Manufacturers Get Product Liability Insurance?

Given everyone’s much greater awareness of the health of our hearing, should audio gear manufacturers avail themselves of product liability insurance in case of future class action lawsuits?

By: Ringo Bones

For some years now, the tobacco industry had been experiencing it first hand after a series of class action lawsuits put forth by cigarette smokers now suffering from lung cancer and other related diseases. Suing them for failing to fully warn against the full extent of the dangers of tobacco use. Given the relative ”success” of these lawsuits from the standpoint of the plaintiffs, will similar class action lawsuits will soon be besetting audio gear manufacturers after legions of Generation X-ers figure out why they can’t hear anymore?

If you happen to sell, supply or deliver goods – even in the form of repair service – you may need coverage against claims of goods causing injury, death or damage. Product liability insurance covers you if any of these events happen to another business or person by the failure of your product or the product you are selling. From a legalese standpoint, product liability is the area of the law in which manufacturers, distributors, suppliers, retailers, and the rest who make products available to the public are held responsible for the injuries those products cause. Usually, there are three major types of product liability claims: manufacturing defect, design defect, and the failure to warn – also known as marketing defect.

While the tobacco industry – more often than not – had always resorted to that legal gray area of knowing only the harmful effects - i.e. health risks - of their product only several centuries after they started selling tobacco products to their customers, the warning signs of hearing loss usually manifest itself in very obvious ways. As in pain - hence the threshold of pain part of our hearing. But is this self-evident truth be enough to protect hi-fi and public-address systems manufacturers against future class-action lawsuits pertaining to hearing loss?

Warning signs and legal disclaimers are seldom – if ever – banded about by audio gear manufacturers in their adverts. The only audio gear manufacturer that I know of that warns their potential customers of the dangers of using their products at very high decibel levels is Polk Audio. On the advert of their SRT System, Polk Audio clearly warned that this audio system is capable of extreme sound pressure levels. The said advert even states that SRT Systems are supplied with a sound pressure level meter to help you – their prized client – determine safe listening levels. In my opinion, this is like a cigarette manufacturer providing their loyal customers with a great healthcare package.

As an avid Rock concert patron and sometimes performer, it is probably the sound reinforcement / public-address system side of audio gear manufacturing that should be availing themselves of product liability insurance. Given that contemporary Rock concert sound reinforcement systems can easily deliver clean and continuous 120 to 130-dB sound pressure levels to a relatively large number of people is a recipe for a large-scale hearing loss – not to mention the health-related class action lawsuit.

Will audio gear manufacturers do a Winchester House-like descent into superstition in the face of an impending class action lawsuit? I hope not. After all, the 19th Century firearm magnate William Wirth Winchester managed to ply his wares long before the American society became the litigious entity that it is today. With the use of contemporary American Rock music as a torture device in Guantànamo Bay Prison – i.e. playing American Rock music to terror suspect detainees, I think audio gear manufacturers must now have product liability insurance or get one as soon as possible. Thanks to the malfeasant way that the Bush-Cheney consortium conducted America’s “War on Terror”.

Tuesday, November 10, 2009

Hi-Fi and Audio Video Equipment Insurance Anyone?

Given the recent rise of insurance providers offering coverage of your precious hi-fi, AV, and even Internet-connected computer equipment, is it wise to avail yourself of this type of insurance?

By: Ringo Bones

In my neck of the woods, the electric power, cable and telephone utility companies are recently diversifying their business by offering very reasonably-priced insurance policies that cover hi-fi, audio-video, and even Internet-connected computers against fire, lightning, and damage via electrical surges. With premiums that average at just pennies-per-day, is it wise to get hold of such insurance policies?

Given that most homeowner’s insurance policies – even though they provide coverage against fires – these seldom, if ever, provide coverage against destruction by fire of your irreplaceable high-end hi-fi and other electronic equipment. So it is definitely wise to obtain a separate insurance policy for your hi-fi and other electronic equipment - especially if they are very hard to replace like vintage vacuum tube-based audio gear. Obtaining a separate coverage is far from easy, which is the reason why most people opt not to get one. But for those who decides that their audio-video gear are important enough to warrant insurance coverage, there are tips to follow to allow one smooth processing of their application for them to insure their AV gear.

The problem of proper insurance coverage for high-end hard-to-replace hi-fi, AV, Internet-connected computer and other electronic equipment is rather easily solved. Specifically:
1. Keep a file with all your purchases of the hi-fi, AV, and other electronic gear that you’ve acquired over the years. One usually assumes such a file exists for tax write off purposes, but it is never safe to say never and probably equally unsafe to assume anything!
2. Using a film and / or digital camera (preferably both types of camera), photograph everything you intend to be insured. This serves as a photo documentation of all the hi-fi and other electronic equipment that you own and intend to be covered by insurance.
3. Using a high-quality copier, copy all your receipts and color copy all your photos – especially your digital photos - and keep them in a bank safe deposit box. That way you’ll have records and documentation that will survive any untoward occurrence. I mean what is the point in keeping records in your house - especially if it gets burned together with those items you intend to insure in case of fire. And if possible, have these items notarized by a qualified attorney.
4. Bring in a qualified estimator who will identify the replacement value of your hi-fi and other equipment you intend to insure if the amount and / or scale of your investment demand’s it.
5. You can now safely go to your insurance underwriter armed will all of the information collected above safe in the knowledge of a smooth and speedy processing.
6. Always insure your equipment for “full replacement value” rather than settle for a depreciated figure. Usually the insurance company will tell you that depreciation coverage allows them to sell you a less expensive policy and that you are taking a form of tax write off anyway. However, individual owners of up-market vintage hi-fi gear or other AV equipment seldom, if ever, employ chartered Certified Public Accountants from their local top accounting firms and "bank" their depreciation funds for future replacement. It makes more sense to try and obtain the most complete replacement coverage available to you.

Of all the tips cited above, proper documentation of all the gear that you own that’s intended to be insured is probably the most important. Especially now that insurance adjusters no longer respond as if they are born yesterday concerning privately-owned hi-fi, AV and other electronic equipment. But let us not forget that loss adjustment is still a very difficult matter and requires technical training in which a special group of persons known as loss adjusters perform this work. Loss adjusters typically work for the insured or for the insurance company. Also, if several insurance companies are involved in one loss, it is advantageous to have a single adjustment bureau handle the entire matter.

While many fire insurance policies also have endorsement for extended coverage like vandalism and malicious mischief, nevertheless the properties are only protected for specific perils. Like damage due to lightning strikes and / or the resulting electrical surge / damaging electrical spikes.

There are after all millions of up-marked high-end hi-fi gear around the world that had suffered some kind of calamity. Fortunately, no one I know was unlucky enough to have lost his or her vintage 1950s era Quad II amplifier with the oft-partnered Quad ESL 57 in a fire, flood or a freak electrical surge caused by a lightning strike. If the worst ever comes, it’s nice to know that we can insure our really expensive and hard-to-replace hi-fi, AV and other electronic gear. Especially if they cost on average 10,000 US dollars or more.