Insurance Overview For Filmmakers
The film and television industry boasts a myriad of insurance options for just about every conceivable contingency. Some, like errors and omission insurance, are a must have, while others are dependent upon your particular circumstances. From equipment floaters to adverse weather conditions, there are insurance coverage options for every type of production (big or small, doc or narrative, short or feature).
General Liability (Film Production) Insurance:
General liability insurance protects the production company against all aspects of film production, including claims of property damage. If you plan to shoot on location, property owners (both private and municipal/governmental) will require you to obtain general liability coverage. General liability insurance also protects against claims of bodily injury that can arise as a result of your filming activities.
If you own equipment and plan to move it from location to location, you may consider an equipment rider to protect against damage, loss or theft. In addition, if you plan to rent equipment for use during filming, the owner of the equipment may require that you provide insurance to cover the equipment during your term of use.
Errors and Omissions:
Errors and Omissions insurance, commonly referred to as E&O insurance, protects filmmakers against claims and lawsuits arising from acts and omissions of the production company relating to the film. E&O covers defamation, invasion of privacy, misappropriation and trademark and copyright infringement claims among other claims. E&O will not protect against intentional conduct or breach of contract claims by the production company.
Traditionally, E&O insurance is secured at the end of production and is a requirement for securing distribution. Sometimes, however, E&O insurance is obtained at the beginning of the production process to prevent exclusions. Other times, placement is required by financiers prior to the release of funds.
Securing E&O insurance can be a time-consuming process. The application is often lengthy (running 10+ pages) and there are many clearance procedures to work through. For more information on film clearance, see my Clearance of Rights summary post: http://staceydavislaw.com/uncategorized/clearance-of-rights/
The standard E&O term is 3-5 years and can range in cost from $2,500 to several thousand dollars.
Like most businesses with employees, worker’s compensation is a necessity (as dictated by state law). Workers comp provides replacement income and covers the medical expenses of the cast and crew (employees) who are injured on the job.
There are several payroll assistance companies who provide this type of insurance for the film’s employees (as technically they are employees of the payroll company).
Negative/Video Film Insurance:
As the name implies, negative film insurance insures the production company against any loss, damage or destruction that may occur to the film negative or video during shooting. Coverage examples include loss or destruction of the film during transportation. This insurance covers the cost of the reshooting. Sometimes loss or destruction of a negative due to a camera malfunction or faulty stock is included in this coverage; other times, such coverage is only provided through a separate faulty stock and processing rider that is combined with the negative and videotape coverage.
Negative film insurance can run around $750-$1000.
A completion bond guarantees the financing to complete the film in the event the production company exceeds the production budget. For example, if the production company goes over budget, the completion bond is invoked and the completion bond company has the right to take over the production. Sometimes, a completion bond company will do a “soft takeover” and look over the producer’s shoulder rather than actively assume production responsibilities. Once the bond is invoked, the completion guarantor has priority over other investors on the project.
Sometimes outside investors will require a completion bond in order to secure their financing funds. A completion bond can cost around 3-6% of the negative cost, however, 50% of that generally is refundable after delivery of the film.
For more information about insurance available to film productions, or for a list of brokers and insurance providers available to assist you with your coverage needs, please contact Stacey Davis at The Law Firm of Stacey A. Davis, LLC, 205.777.9906 or email@example.com.