Beyond the Lenses - Insurance Planning for the Filming Industry
- Claude Machiha
- Sep 23, 2022
- 2 min read
Filmmakers, producers, broadcasters, and other entertainment professionals, all seek quick risk transfer solutions for faulty cameras, torn costumes, and even comprehensive motor insurance for those sexy fast car chase scenes, which funnily enough, are approx. 80% real.
Film production insurance is a type of specialty insurance that covers the equipment, sets, and props as well as liability exposures for film producers. The cost of filming an entire feature film can range from $250K to $500K per day
There are three common types of production insurance out there:
comprehensive (covering everything)
specialized (covering specific items)
or named peril (covering certain risks)
FILM PRODUCERS' INDEMNITY
If ever Tom Cruise truly did fall off the Burj Khalifa, Paramount Pictures would have been sued in the hundreds of millions for his injuries, or quite frankly, for his death. The first thing any executive producer seeks out is to obtain a certificate of insurance (COI); a document that proves sufficient insurance coverage for the worst to happen.
Most film equipment rental agencies (as it's cheaper to rent out film equipment for a 6-month production timeline than to buy), require a COI in order to lease out any film equipment. This document has other numerous ripple effects as the whole industry sees it as an essential element to the start of a filmmaking process.
FILM CANCELLATION AND ABANDONMENT
Much like a life insurance policy, the 'death' of a filmmaking venture will need a hefty lumpsum or large recurring payout in order to cater for certain non-recoverable costs, such as venue/scene hire, equipment hire and the casting cost.
Most film cancellation and abandonment provisions within a film liability insurance contract have strict conditions for the exact time period that the indemnity will last for, e.g., for the 6 months it would take to shoot the feature film. Moreover, a key man provision can also be factored in, if say, a particular Henry Cavill to play Superman, becomes horribly sick with COVID, and needs the most expensive medicine in the world to be paid for, in order to quickly recover, and get back on set.
EVENT LIABILITY AND CANCELLATION
Event liability covers the damages that an event organiser would become liable to pay, should any of the cast and crew suffer injury due to the conditions of the event, e.g., a truss from the ceiling falls on one of the crew, or an actress's caravan gas tank leaks and catches fire.
Event organisers are probably one of the most cash liquid entertainment professionals, with not just filmmakers, but music video producers, film students, etc., all seeking out to shoot on their premises. Such a blessing of too much business, however, comes with the cost of being highly organised and super attentive to legislative detail.
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