MOVIN' TO THE MUSIC

Rough Notes, Mar 2004 by Zinkewicz, Phil

Dance studios provide stable, easy-to-place market

It happens eight times a week, fifty-two weeks a year, plus extra performances for special holidays. A group of about twenty-five young people stands on an elaborate, multi-level stage, waiting for the orchestra to signal the rise of the proscenium curtain. But the curtain doesn't rise all the way. It stops at a point high enough to show the feet of some of the young people at the stage floor level-talented feet; dancing feet. These feet are doing time steps, shuffles and breaks, until the curtain rises completely and we are transported back in time to a different 42nd Street than we're used to today. No Disney and Warner Brothers characters dominate the landscape. Instead, there is the glitz and glamour, the grime and the granite that we remember from the old Dick Powell-Ruby Keeler film that was the genesis for this Broadway production.

In some ways, this is really a play within a play. On stage dance a group of "hopefuls," characters in a play about dancers anxious to make it big in a Broadway musical. But in real life, the dancers are "hopefuls" themselves, praying to Terpsichore that this show, "42nd St." now playing at Broadway's Ford Center for Performing Arts, will lead to others, which will lead to careers. Hopefuls playing hopefuls, if you will.

But the hope doesn't begin there. For many, the hope of a career in dance begins in small dance studios-mom and pop operations just down the block and around the corner, right next to that Chinese restaurant in Main Street America. Next time you drive through your local community, take a look around and you'll probably see dozens of dance studios dedicated to training the young-the hopefuls-in the art of dance. Right now, these hopefuls may be studying in a studio in Macon, Georgia or Scranton, Pennsylvania or Brooklyn, New York. But someday some of the luckier and more talented participants will be working professionally, if not on Broadway, then in some regional theater in the United States or on a national tour. And, they will probably look back fondly on the local teacher who taught them how to do that old soft shoe.

For insurance agents, providing insurance coverages for dance studios may not represent a burgeoning market. Some insurance agencies that write dance studios are quick to point out that dance studios represent a stable market-not too much exposure to loss and companies in the excess and surplus lines market that are willing to write the business.

"Dance studios are not what we consider a 'distressed market,' " says Sydney Croxdale, partner in the Springfield, Missouri-based insurance agency, Bohrer, Croxdale & McAdoo, Inc. "Most of our markets have no problems with this particular class of business. The primary exposure in writing dance studios is liability coverage for students. Some companies won't write coverage for dance studio participants. Others will, but usually at an increased premium. Some companies will offer accident insurance coverage if students are not covered under the general liability portion of the policy."

Merrilee Gale, an underwriter with the Phoenix, Arizona-based Alien Financial Insurance Group, says the agency has been writing dance studios for about 21 years. "You find dance studios usually in mid-sized cities, and they're usually family-owned businesses," she says. "They're usually not difficult risks to place, even in today's hard market. Coverages include the normal property exposures-building, contents, computers, etc. General liability is available depending on the number of students per teacher. And, if the usual risk management techniques are employed-keeping the place swept and clean, making sure the mirrors are clean, doing background checks on employees-then the exposure to loss is not all that great."

However, Fort Wayne, Indiana-based K&K Insurance has taken dance studio insurance coverage to a new level. The firm has been a specialist in providing insurance coverage for dance studios and schools for the past six years. In fact, K&K, well known for underwriting unusual risks in the entertainment and sports fields, as well as other exposures, put together a program just about that time specifically for dance studios. The program is accessible to independent agents who might have an opportunity to write some of this business, but not the expertise.

Kevin Kurtz, marketing representative for K&K, says the program is underwritten by Nationwide on an admitted basis and is available in all 50 states.

"Our insurance program has been specifically designed to meet the needs of dance schools and other organizations specializing in the instruction of dance. Our program includes coverage for participants of all ages as well as for off-site recitals and performances. A studio or school may also elect to purchase optional coverages, such as sexual abuse and molestation defense coverage (up to $100,000) for an additional premium. Coverages apply to the school, its officers, directors, volunteer workers, and employees, while acting within the scope of their duties on behalf of the school."