Film Insurance

By Peter Brown

The Wikipedia definition of Insurance reads as follows:

Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment.  It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

In our daily lives we are well used to handling the full range of claims for property damage, in particular Contract Works and general liability including Public and Products and Professional Indemnity.

However, there is one area of specialised insurance in which Peter Brown and Bill Matthews from the Brisbane Office of Technical Assessing have developed a niche and that is Film Insurance.

Film Insurance provides insurance on films, television productions and commercials from short productions to full-length features.  The underwriting of Film Insurance is normally the domain of specialist underwriters in this field both locally, in the UK and USA.  There are a number of types of cover available, the main ones of which are as follows:

Film Producers’ Indemnity

This cover, also known as Cast Insurance, provides for the increased costs incurred due to the death, injury or illness of nominated personnel who are considered essential to the continuation of the Production.  Typical people insured are the Director, Producer, Director of Photography and Principal Actors.  Cover is normally taken out for pre-production and shoot, however, in some instances cover may also be taken out for the post-production period.

Negative Film Risk

Cover is provided for the increased costs incurred due to the loss of, or damage to, negatives and video tape and other forms of content media.  This Policy also normally provides cover for the risks of faulty stock, faulty cameras and faulty processing.

Multi-Risks

This particular cover is normally split into three sections:

• Props, set and wardrobe;
• Office contents;
• Cameras, lighting and electrical equipment.

It should be noted that a lot of the equipment used in a production is hired in from specialist hire companies and it is important that responsibility for insurance is clarified at the commencement of hire.

Extra Expense

This section of the Policy protects the Production Company for increased costs incurred following damage to props, sets, cameras, equipment or facilities –it provides protection to cover the costs of delays caused by material damage to property.

Public Liability

This Policy covers the Production Company for claims made for death, bodily injury or property damage to third parties other than employees of the Production Company.

Errors and Omissions

This Policy protects the Production Company and distributors for claims for libel, slander, defamation, plagiarism, breach of copyright, invasion of privacy and theft of rights and includes the legal fees incurred in the defence of the claim.

This class of business can lead to the handling of some extremely varied and interesting claims as illustrated in a cross section of claims handled by Peter and Bill over the last few years.

(i)             Loss of 5 minute scene during filming of “Scorched”, a made-for-tv movie shot in Sydney;

(ii)            Loss of day’s shooting of 40 second commercial entitled “Bush Tucker Man” for Electrolux due to poor weather conditions in Broken Hill.  Filming extended leading to increased production salaries and extended hire costs for equipment;

(iii)           Hirer failed to return hired camera equipment from renter of broadcast and professional video equipment.  Equipment located in Lebanon and most of it successfully recovered;

(iv)          Disruption to filming of “Farscape 2” production due to illness of leading actress.  Major cost to extend and change film production program;

(v)           Substantial claim for additional expenses incurred due to the delay in commencement of Principal Photography due to health issues suffered by leading cast member;

(vi)          Contamination of electronic event screens by foreign matter generated during filming resulting in claim for reinstatement of damage;

(vii)         Fire in sound stage destroyed building, cameras and equipment owned by third party suppliers.  Sound stage building required reinstatement and a substantial claim eventuated for disruption to rental income during the period of the construction.

The writer will discuss Contingency Insurance in an article later this year.