According to the definition of film production in the Act on Cinematography, production of film consists of many activities, e.g.: artistic, economic, legal, and technical. Film production is a process dependent on many aspects, not always the ones depending on producer’s will. Each day on large, multi-million dollar, full-length productions insurance policies indemnify productions from innumerable unpredictable risks.
Currently on the insurance market there are many forms of indemnity designed for film producers covering, e.g. crew and cast member accidents, film schedule interruptions, as well as equipment loss or damage. Often conditions of coverage are limited to the locations of actual production. Insurance companies apply territory exclusions and coverage may exclude e.g. war or conflict zone countries and regions – prior to granting insurance – the underwriter will consider directives from the relevant government authorities regarding a country or region’s risk and safety when deciding about providing or excluding insurance protection.
Who or what can be protected on a film set.
First, we should start with the most popular form of insurance covering accidents – insurance for cast and crew members in the event of death and permanent or partial disability which cover the loss of life or medical treatment as the result of on set accidents. Unfortunately, not all accidents occurring on set are compensable. Incidents in which personal losses are covered will be specified in detailed in the General Conditions of Insurance (GTC) and described in the scope of insurance and the “insurance amount” payable by the insurance provider. It’s critical to obtain the appropriate GTC with regard to stuntmen as their work often places them at risk of bodily harm and even death.
Another insurable element of film production regards film location access and possible relocation in the event the set is unusable or destroyed. Such coverage could include the costs of relocation or reconstruction of the set, or replacement of stage elements or props in the event of theft. It’s important to underline the costs of such policy coverage will depend e.g., the film’s budget and any special and/or pyrotechnic effects used during filming. Keep in mind that not everything found on the set is insurable. Insurance policies can often exclude: animals, plants, trees, aircraft, ships, jewellery, and customized construction not intended for the film’s production. Cars created for film purposes can be insured. In addition to props and stage elements, the producer’s office contents (computers, furniture, etc.) where administrative and financial records are managed are insurable. During shooting, unexpected accidents resulting in damage to equipment may occur. Property insurance covers equipment such as cameras, sound and light (lamps and generators) equipment, trolleys, etc., in the event of accidental damage, breakage (with possible limitations in the GTC found in the exclusions such as equipment faults at the time of purchase, hidden faults, or use of an item inconsistent with the manufacturer’s instructions), as well as theft, and loss due to short circuits or voltage surges.
In the event of renting property or other objects used during film production, the renter will likely require a Certificate of Insurance including the renter’s name as an insured party to cover damages in case of damage or destruction to a given object. Often a reserve sum is required for real estate to be included within the scope of insurance. Property insurance can provide protection in case of fire, electrical, and water damage (flooding) or damage caused by broken glass or an explosion (especially in case of pyrotechnics).
Essential Elemements coverage
Obviously, the appearance of all members of the film’s cast and crew, on time and in place as prescribed by the producer is a necessary condition of making a film. It’s important that leading actors and actresses appear on the set because their presence can be a contingency of financing as their role may be the attraction for audiences to the cinema. The main character’s appearance might also be important to a film’s sequels or prequels. Good examples of this include Indiana Jones, Pirates of the Caribbean, Star Wars and Sex in the City. Damages related to a cast member’s absence can be covered by insurance. Policies for “Essential Elements” insurance can cover all financial consequences related to the interruption, postponement, or termination of filming due to death, illness, injury or even arrest of an essential cast member designated by the producer. This insurance can be extended to include incidents involving members of the essential actor’s family in case of death or other tragedy, but such coverage usually comes with strict time and situational limitations. Keep in mind that that coverage waivers can be attached concerning pregnancy, loss of voice (when risk is know prior to coverage), mental illness, and professional burnout.
Considering the film’s completion stages and post production elements it’s worth considering insuring the work product and subsequent materials created. Insurance is available covering damages related to the loss, theft, or damage to the master or working copies, as well as other media on which the material is recorded. It should be noted however that damages incurred as a result of bad equipment or unsatisfactory storage and handling conditions will be excluded.
Adverse weather insurance
Producers are at risk of unforeseen weather conditions. It can occur that filming could be cancelled due to inclement weather conditions, e.g., when a location’s administrator bans filming because of dangers associated with atmospheric conditions, storms, gales, or other natural disasters. Adverse conditions coverage can provide reimbursement of incurred production costs in case of cancellation or postponement of filming due to bad weather conditions (however such coverage is contingent upon meeting specified weather conditions as verified by a designated meteorological agency). This type of insurance is normally negotiated individually given the diversity of weather and locations.
At film’s distribution stage it’s prudent to purchase Errors & Omissions insurance, which provides protection in the eventof legal defects relating to the production. For example when the producer fails to properly hold copyright, related rights, permission to use images, sounds, etc., included and exploited in the film.
The last type of “insurance” or financial instrument, which protects not only the producer, but all entities investing in the film from the side of financial risk for the whole movie is the so-called Completion Bond. Many big Hollywood productions wouldn’t be produced if it wasn’t for this form of security, consisting of establishing a guarantee against the entity (guarantor), stating that the movie will be finalized according to the specified budget and conditions, as well as will be delivered within the time specified in the production schedule. Sometimes a Completion Bond is even required by entities contributing their resources to a movie. The process of concluding a guarantee contract starts by submitting to the bonding underwriter elements, such as: the script, budget, production schedule, and milestones of key contributors involved in production. It is worth noting some employees of Completion Bond underwriters are usually professionals in the film industry. They have extensive knowledge about the costs of each aspect of film production. Therefore, these companies are able to provide knowledgeable technical assistance during possible difficulties that the producer may encounter during production. The bond agreements between the guarantor and the producer will include the producer’s obligation to obtain other insurance, such as, Errors & Omissions, and Essential Elements coverage.
For Polish full-length audiovisual productions, all of the above mentioned policies and the Completion Bond guarantees are available. Therefore, when starting a film production, it is worth considering the risks that producers and creators can face while creating a film, and to consider whether the insurance policy will provide peace of mind. This way the creators can focus on the artistic aspects of movie production.