Agent maestro conducts instrument insurance program

The string bass with vintage 1860 wood that was purchased in London began to fall apart a month after it was relocated to New England. Another casualty of climate change?

Sort of. According to Peter Anderson, an insurance agent who specializes in musical instruments, fine instruments need time to adjust to the changes in temperature, aridity and humidity after they are transferred to new locations.

The 1860 string bass claim story had a happy ending after a restoration that included putting it in cold storage for six months and then letting it breathe in the new climate for a few seasons before the $3,000 in repairs were even begun. It is still making beautiful music.

Music lover Anderson is conducting business as chief executive officer of Anderson Insurance Services Inc. in Marshfield, Mass., a personal and commercial lines agency with a specialty in insurance for harps, string, jazz and other musical instruments. He began Anderson Insurance in 1983 after acquiring Winchester & Drury Insurance. Today the agency is nearing $1.5 million in revenues and has eight full time employees.

Anderson played multiple instruments throughout high school and college before concentrating on vocals. He has been a member of the Boston Symphony Orchestra chorus for more than 25 years.

He has been selling insurance to musicians since 1991. He began the program with Kemper but now his partner is OneBeacon Insurance. He also gets a little help from Lloyd’s for earthquake prone (San Francisco) locations.

His musical program represents close to 40 percent of his business and he sees the day not far down the road when it “will eclipse the 50 percent mark.” He is mulling adding representation in several foreign countries.

Musicians, even those playing in orchestras, own their own instruments and are responsible for the insurance, although for some the insurance is provided as part of collective bargaining. Anderson’s agency insures the musicians of the Boston Symphony Orchestra, the National Symphony in D.C. and the San Francisco Symphony in addition to lesser-known orchestras and thousands of freelance musicians.

Anderson reaches the musicians — or they reach him — either directly or through his partnerships with the American Harp Society (AHS), the World Harp Congress (WHC) and International Society of Folk Harpers and Craftsmen (ISFHC).

Anderson personally deals with the underwriters. “I am guiding my loss ratio,” he admits — a loss ratio that had been “phenomenal” until Hurricane Katrina flooded the instrument room of the Louisiana Philharmonic and encased its concert hall in mud.

“We had people floating instruments on air mattresses out of their second floor windows … [I]t was quite a story of what people did to protect their instruments at the expense of all of their other things frankly,” he recalls.

Anderson’s responsibilities include assigning value to instruments, both initially and after any claim. A typical concert harp might sell for $25,000 and special models can cost as much as $200,000. Other fine string instruments can run to millions of dollars. The bows for stringed instruments alone can average $30,000 to $40,000 a piece.

Harps — a subspecialty for Anderson — are among the most challenging to insure because they are “like an over-strung time bomb” that can be set off by a bump. If a harp breaks a neck or base, the repair can be $3,000 to $6,000.

String basses also are a challenge because they are big and bulky. They are especially vulnerable when being transported. In fact, any instrument that is “getting legs” — meaning on tour — is closely scrutinized by underwriters.

Smaller instruments can be a challenge as well but for different reasons.

“To the other spectrum, flutes are a huge problem because they are little. They can get stepped on or picked up and walked away with. I can tell you any number of claims where a flute was left on a ticket counter at Amtrak or McDonald’s or wherever and some are worth $10,000 to $15,000 to $20,000 a pop,” Andersons says.

The insurance is rather inexpensive: just $.50/$100 of valuation. A typical premium is about $250. The low premiums present another challenge for the maestro. “Dunkin’ Donuts needs to sell a lot of coffee to make money. But they’re doing very well. We are doing the same. It’s more of a volume businesses,” Anderson explains.

Despite the talk of claims and high values, Anderson believes music underwriters have it relatively easy. Losses occur because an instrument is stolen or falls but not because musicians are bad risks.

“Musicians take far better care of their instruments than they do themselves or their family or their children,” he quips. “So from that standpoint, there really is not that much to worry about.”

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