Why Don't Record Labels Offer Their Artists Health Insurance?


Friday night, I was talking with a friend of mine. She's the owner of a new small business here in Seattle and was stoked that night because she was going to be able to offer her employees health insurance. She'll be paying $217 per month to insure her employees, which, according to her, is less than it costs to keep her cash register on for one hour.

As we talked about the importance of insuring employees and how there are relatively few small businesses that do, she brought up a good question: Why don't record labels insure their artists?

Think about labels like Sub Pop or Barsuk: They each had bands like The Shins and Death Cab for Cutie making a fair amount of money. You'd think it would be in the label's best interest to insure the folks who are spending several months a year on highways and in airplanes, all in the name of selling more records. Of course, the guys in DCFC and The Shins probably don't have as much trouble now paying for their own insurance...but they likely did when they were first signed to the label.

Labels insuring their artists was something I never considered. I asked a friend of mine, a former employee of Sub Pop, why labels don't do this. She explained that she remembers Sub Pop looking into offering insurance to their artists, but that legally it was impossible. Apparently, the artists are considered "independent contractors" and insurance companies won't cover them.

This seemed like a reasonable explanation to me. But I'd like to know if there are any lawyers, insurance folks, label folks, or musicians themselves out there that might shed a little more light on this. I mean, are there insurance companies that might cover independent contractors? Or is there a legal loophole somewhere to be found? Maybe you own a label and have tried doing this to no avail, or perhaps you're a musician and would prefer, for the sake of your own independence, not to be insured by your label?

As Tavis Smiley would say: Let's talk about it...

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