There are several coverages that a producer needs when insuring a film project (by film , I also mean HD and video). In the first of a four part post, I will explain the main coverages.
- Covers against extra expenditures caused by death, sickness, disability or kidnapping of insured cast members, director, DOP, or anyone else designated under cast coverage
NEGATIVE FILM & VIDEOTAPE INSURANCE
- Covers against extra expenditures caused by loss of, damage to, or destruction of Negative or Tape or Hard Drive on an "all risk" basis, excluding coverages outlined under the Faulty Stock, Camera & Processing coverages.
FAULTY STOCK CAMERA & PROCESSING INSURANCE
- Covers against extra expenditures caused by damage to, or destruction of negative or tape caused by faulty stock, faulty camera, faulty processing and accidental erasure or exposure to light
PROPS, SETS & WARDROBE INSURANCE
- Covers props, sets, scenery, costumes, wardrobe and similar theatrical property on an "all risk" basis against direct physical loss or damage to the rented property.
MISCELLANEOUS EQUIPMENT INSURANCE
- Covers cameras, camera equipment, sound and lighting equipment, grip equipment and similar miscellaneous equipment on an "all risk" basis against direct physical loss or damage .
PROPERTY DAMAGE LIABILITY INSURANCE
- Covers against all sums the insured shall become legally obligated to pay because of loss of, injury to, or destruction of property of others in the care, custody or control of the insured
- Excludes property covered under miscellaneous equipment and props, sets and wardrobe coverage
I will explain more coverages in a future post.
Production Insurance is expensive: hold your broker accountable
- Ask your broker if they have a sufficient volume with Entertainment Underwriters to be able to negotiate the best insurance premium for your project.
- A broker works for you to advise and obtain the coverage you need from underwriters (the insurance company). Make sure they have the experience to properly advise you. Due to the specialized nature of film production insurance, it should be the focus of your broker's practice - not a sideline.
- An Entertainment Broker needs to be familiar with the production process to be able to represent you during a claim so that you receive the maximum money that you are due from the Insurance Company.
Some foreign countries may require that you purchase mandatory insurance from locally licensed (admitted) insurance companies. I have a database of the insurance requirements for each country throughout the world. I would be happy to share this information to ensure that you do not inadvertently neglect buy local mandatory insurance, as penalties can be severe.
For instance, if you do not buy local Workers Compensation and Auto Liability in the Czech republic, the fine can be U.S. $240,000.
Limits, deductibles and policy conditions vary from country to country. I can arrange a Foreign Difference In Conditions policy to fill the coverage gaps for mandatory foreign policies that may be inadequate. Ask me how.
Underwriter charge for discomfort. Too little information makes an underwriter unsure of the risk.
Endeavour to provide enough information to your Entertainment Broker so that they can present the risk of insuring your gear clearly.
Good answers to the following questions will result in the lowest possible premium:
- Address where the gear is housed and the construction of the building.
- Does the building or storage space have an alarm? Is it monitored?
- Are dead-bolts on the doors?
- Are there bars on the windows?
- Is there a security guard?
Include a resume of the owner - Experience pays.
Film producers often ask me who is protected under the Film Package Policies. The following are all covered by Policies that I arrange.
If you are:
- An individual producer, you and your spouse are Insureds, but only with respect to the conduct of a business of which you are the sole owner.
- A partnership or a joint venture, you are an insured. Your members, your partners, and their spouses are also Insureds, but only with respect to the conduct of your business.
- An organisation, other than a partnership or joint venture, you are an insured, your executive officers and directors are Insureds, but only with respect to their duties as your officers and directors. Your stockholders are also Insureds, but only with respect to their liability as stockholders.
- An employee on the film production payroll you are an Insured, but only for acts within the scope of your employment whilst working on the film production. This means the actors, director, DOP, art director, production manager and so on down the crew list are all covered and protected by the production package and liability policies.
There is no need to request insurance certificates adding the producer, production manager, DOP etc., to the policy. All persons on the payroll of a production that I have arranged coverage for are protected
However, I will always provide certificates when requested.
The fall flu season is here and no one has any idea how bad the H1N1 Virus will affect film production sets, special event planners and operators of Fairs and Festivals. Transferring the risk to insurance is one solution but it will not solve all the potential H1N1 scenarios.
Potential impacts are as follows:
1. Film/Television production companies could have cast/crew get sick or be quarantined. If an individual is insured under Cast coverage with no exclusion then coverage would be afforded if they get sick. However, if they (or the crew) are quarantined without illness there would be no coverage.
2. If a production company are filming an event and the event gets cancelled due to H1N1, there would be no coverage unless cancellation of event coverage is arranged the event cancellation coverage included cancellation due to H1N1.
3. If crew members or production company personal are scheduled to travel and they can't due to H1N1 there would be no coverage.
4. If the production company is hosting a special events and they have event cancellation coverage they need to look at the specific insurance policy wording to see whether coverage would be provided for an H1N1 outbreak, or a government cancellation of the public event due to H1N1.
5. If normal business operations ie post house, art gallery etc. can not operate due to staff sickness there is no coverage.
6. If fairs and festivals are cancelled due to H1N1 outbreak there is no coverage unless cancellation of event coverage is arranged that included cancellation due to H1N1.
I think you can get the picture that there are a lot of scenarios where: production companies, special event planners and operators of Fairs and Festivals could be affected that would not be insured.
Business Interruption Insurance
Over the last three years, a number of Canadian studios and post production facilities have used their Business Interruption and/or Extra Expense insurance to recover their losses from a fire or water damage incident.
Business Interruption Insurance protects against the loss of Normal net profits and operating expenses which will continue even though operations come to a complete standstill or are seriously impaired. If a fire, explosion or machinery breakdown is likely to cause a serious disruption of revenue, the need for business interruption insurance exists to protect against earnings loss.
Many companies go bankrupt in spite of having adequate insurance to rebuild their facilities after a major loss. Their revenue may be interrupted for as long as a year before they are back in business. During this time, the company will still be obligated to pay salaries for their key employees, for taxes, utilities, etc.
It is the lack of revenue and these ongoing costs that combine to force the company into bankruptcy. Business Interruption Insurance will pay these expenses including loss of profits during the rebuilding phase. The fundamental aim of all major business interruption policies is to provide coverage for: Loss of Net Income plus Necessary Continuing Operating Expense.