CALL SECURITY
May 1, 2007 12:00 PM, By Darius Carter
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Below is the extended online-only version of Remix Magazine's Call Security article.
No doubt you’ve invested a lot of dough in your home studio. In fact, it’s probably worth more than the rest of your stuff put together, especially when you figure in any income generated from it. Unfortunately, there are far too many scumbags out there looking to jack your gear. Everyone in music has either had things stolen or knows someone who has. So if you haven’t done it yet, feel the paranoia now and develop a full-protection plan against theft, as well as accidental damage. This includes insurance, security and some preventive measures.
The following information is for guidance only, and is not intended as legal or insurance advice on your specific policy. All insurance policies terms and conditions must be followed, or claims may be rejected. Always contact your insurance broker to confirm questions about your policy.
STUDIO INSURANCE
Most homeowners/tenants policies offer $1,000 to $2,000 worth of coverage for “business tools,” and only while the equipment is located at the principal residence. Musical instruments and related computer gear are the business tools of professional musicians, and most musicians travel. Whether or not you consider yourself a professional is up to you, but most insurance companies wouldn’t view a room full of pro toys and you churning out CDs for sale as much of a hobby.
You can schedule specific instruments (that is, those of very high value or collector status) for a valued amount within your policy, in which case the item will be covered for all risks (theft or damage) and subject to no deductible, no matter where it travels. Not surprisingly, costs for this added service run in the $2 to $3 per $100 worth of coverage annually.
“Under a homeowners/tenants policy, there is typically no coverage for business tools while in transit or at temporary locations,” says Andrew Lloyd, a personal lines and commercial broker with Instar Insurance. “These coverages could be sought under a commercial policy, which is an entirely different product.”
Quite often, the language of an insurance policy can leave the reader wondering exactly what is and what is not covered, depending on the semantics. For example, one policy may refer to “electronics” generally, while another talks of “computers and peripherals” more specifically. Even basic home studio setups have dozens of hardware components that bridge the gap between computers and what’s conventionally thought of as home electronics, so you’ll want to make sure that a potential insurance adjuster would value these items and apply them within the policy you take out. Once again, Lloyd suggests the best way to do this is through scheduling the specialized items for a valued amount.
“Should the reader choose not to schedule these items, at least ensure that the policy limits will cover the replacement cost of these items, and all other contents in the residence,” says Lloyd.
Maintaining accurate policy limits and replacement costs is important, and underinsuring is a bad idea. Most policies are co-insured, which is simply an agreement between you and the insurance company whereby you agree to maintain insurance up to a stated percentage (80, 90 or 100 percent) of the actual value. In return, the insurer will pay a loss, in full, up to your policy limits. If you don’t carry the required amount of insurance, you will have to pay a part of the loss yourself, and that can easily be in the thousands of dollars for a home studio full of instruments and electronics.
One way you can try to save on your premium is by insuring your hardware items only, and storing original software discs with their authorization codes offsite. For software requiring USB dongles, keep these keys in a fire-safe deposit box, hidden within the house, when not in use. This way, should your system be stolen, your dongles won’t be, and your current software may be easily re-installed on another system, without inflating your monthly insurance payments.
Due to the economies of scale, it’s advantageous for bands to purchase property insurance as a whole, rather than it being incumbent upon individual members to buy their own. That could be as simple as a policy to cover property housed at a common rehearsal/recording space (even if it’s one member’s house), or as elaborate as a policy purchased under the group’s legal entity. Several insurance companies, such as Chubb (www.chubb.com), specialize in professional entertainment and touring.
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