Coverage Is Essential To Independent Production

This year’s Academy Award winners will thank parents, producers and even hairdressers in their acceptance speeches.

They may want to include their insurers.

With independent film production taking the spotlight in this year’s Oscar race, insurance has become a major factor in bringing these movies to the big screen.

Insurance policies can cover unique location exposures (Hotel Rwanda), dangerous stunts (The Aviator) and even the loss of key cast or production personnel. Without insurance, film financiers might not gamble on indepe ndent films.

The cost of moviemaking has climbed steadily, and so have the risks. A typical production can cost more than $300,000 a day, involving hundreds of cast and production personnel, stunts and special effects. Confined to tighter budgets, independent producers cannot afford to lose a star cast member or delay shooting due to bad weather.

Although there are numerous risks associated with film production, there are four basic film insurance products:

• Cast Insurance covers any additional costs that can arise if a production loses a cast member, director or any personnel.

• Errors and Omissions policies protect production companies from lawsuits involving violation of personal rights, libel, slander and copyright infringement. Because of the potential for severe losses, especially in cases of copyright infringement, these policies often require filmmakers to consult with attorneys prior to a film’s release.

• General production insurance packages provide the standard insurance needed by any business, such as worker’s compensation, general liability and commercial auto, watercraft or aircraft insurance. It also includes costs for delays and re-shooting due to inclement weather, equipment failure and set or equipment damage.

• Completion bonding simply guarantees that a film will be finished. Without the backing of a major studio, independent producers need the guarantee that they will have the financial means to complete a film if some unforeseen event should hinder production. Without completion bonds, non-studio-backed films might never get produced.
  

IINC is a non-profit, non-lobbying insurance trade association, dedicated to helping consumers understand insurance and safety issues.