Film Production Management Instructor: Mary Walbridge The Complete Film Production Handbook By Eve Light Honthaner Chapter 7 Insurance • Securing insurance should be the first order of business at the start of any new production. • Coverage should be obtained from an insurance agency that specializes in insurance for the entertainment industry. • You may want to get bids from two or three different companies, or from one insurance broker with whom you have developed a good working relationship. Insurance Requirements Specialized Insurance Co’s • There are relatively few insurance agencies that are experts in film production insurance. • The major players have offices in Los Angeles, New York and London. Near North Insurance Brokerage is one such company, as is: • Aon/Albert G. Ruben Insurance Services, Inc. • DeWitt –Stern • Marsh USA • Arthur J Gallagher • As films continually become more complicated in terms of action, stunts, effects, technology and a • reliance on highly paid actors and directors to carry entire pictures on their names alone, • levels of financial exposures increase as well. • Insurance companies and the agencies who represent them are taking a much closer look than ever before at each picture, • investigating potential exposure and carefully assessing the risks. Risks Risk Management • In addition to budgets and schedules, insurance companies examine: 1. the track record of the production company, 2. the producer and director; 3. where the show is to be shot; 4. its financing source; distribution and bond company agreements; 5. cast; 6. story line; 7. all potential hazards; safety guidelines and protection methods to be utilized; 8. proposed travel; 9. crew specifications and anticipated pay-roll; 10. rare and expensive set dressing, 11. props or wardrobe to be used; 12. the use of animals, motorcycles, special vehicles and equipment, watercraft, aircraft or railroad cars and all proposed action, stunts and effects. • The information necessary to complete a risk management survey is now required when applying for production insurance. • Risk management personnel (i.e.. in-house risk managers, brokers, and underwriters) review all scripts, budgets, in addition to detailed break down of proposed stunts and effects. Stunts • The background and experience levels of stunt coordinator effects supervisors are scrutinized, • pyrotechnic licenses • On films containing action, loss control representatives might contact stunt coordinators and effects supervisors to discuss: • the concerns of underwriter: • how each stunt and effect is accomplished, • the anticipated use of personnel and the safety procedures to be implemented. • These reps are extremely knowledgeable in areas of stunts and effects and will offer and spend time on the set when action sequences are shot. • Their sole purpose is to minimize risks and to curb the escalating losses suffered by insurance companies on action pictures ERRORS & OMISSIONS • Errors and omissions (E&O) liability provides coverage for claims made for: • libel, • slander, • invasion of privacy, • infringement right, • defamation of character, • plagiarism, piracy or • unfair competition resulting from the alleged unauthorized use of: • titles, formats, • ideas • characters, • plots, • performances of artists or performers or other materials. • It includes coverage legal expenses incurred in the defense of any covered claim as well as indemnity. • Delivery requirements might dictate this is to be a one-year or a three-year policy. • A three-year policy is cost-effective, and should continue at least throughout the distribution period. Errors & Omissions • Obtain an errors and omissions liability insurance application from your insurance broker immediately upon starting pre-production. • This is the only insurance application that is completed by the production company and must be signed by an authorized member of the production company. • Submit the application and secure coverage as soon as possible. • It is extremely important to make sure that your E&O application has been approved by the underwriters prior to the start of principal photography. • Significant financial loss can be incurred if a part or all produced material is not approved ahead of time. • It is suggested that writ-confirmation from the underwriters be obtained before the cameras start to roll. E&O application • This coverage typically provides a combined single limit of $1,000,000 per occurrence and $2,000,000 in the aggregate for bodily injury and property damage liability. • The liability coverage includes: • blanket contractual liability, • products and completed operations, • Non ownership watercraft liability (usually restricted to vessels twenty-six feet in length), • personal injury endorsement and fire damage legal liability (smaller limits of coverage might apply). Comprehensive General Liability • Evidence of this coverage is given in the form of a Certificate of Insurance. • Certificates of Insurance are issued by the production office (or in some cases, the insurance agency) to a third party (e.g. a location owner) as evidence of coverage. Certificate of Insurance • Frequently, you will be requested to name a certificate holder as additional insured and/or loss payee. Additional Insured and Lost Payee • If a certificate holder is named as additional insured, the insurance coverage will protect the certificate holder for claims arising out of the activities of the production company. additional insured • A certificate is named loss payee is the owner of a vehicle or equipment being used on your film. • If there is a claim resulting from the loss or damage to this vehicle or equipment, reimbursement for the loss or damage would be paid to the loss payee. loss payee • Your Insurance agency may require that you call their office to request additional insured or lost payee certificates when a certificate holder requests 'additional coverage. Often, however, these certificates may be issued directly from the production office. certificate holder requests • On a rental vehicle or a picture vehicle, it is a good idea to include the make, model and I.D. number of the vehicle. • If the value of the vehicle exceeds the limits of the policy, additional coverage will be necessary. If you are doing a series, the episode and production number should be indicated on the certificate. • The top copy of the certificate (the original) goes to the owner of the vehicle, property or equipment. • Two copies are to be sent to your insurance representative. One copy should be given to your production executive, and one is to remain in the production files. If the certificate is for a vehicle, a copy should also be kept in the vehicle's glove compartment. Filling out a Certificate of Insurance • The top copy of the certificate (the original) goes to the owner of the vehicle, property or equipment. • Two copies are to be sent to your insurance representative. One copy should be given to your production executive, and one is to remain in the production files. If the certificate is for a vehicle, a copy should also be kept in the vehicle's glove compartment. copies HIRED, LOANED, DONATED OR NON-OWNED AUTO LIABILITY • This coverage provides liability insurance for: • all hired, • loaned, • donated • and non-owned motor vehicles. • Vehicles owned by or leased to the company must be scheduled separately, and a charge is incurred for each vehicle. • It is not generally intended to cover physical damage to employees' vehicles being used for production activities • If an employee should have an accident while driving his or her personal car for company business, his or her own insurance is primary. • The company's policy only insures the production company if the employee's coverage is insufficient. • Such coverage is provided under the non-owned automobile coverage. • A supply of auto accident forms (Automobile Loss Notice) should be on the set at all times. One should be filled out and submitted to the insurance agency immediately after an accident occurs. When crew insurance is primary • A supply of auto accident forms (Automobile Loss Notice) should be on the set at all times. • One should be filled out and submitted to the insurance agency immediately after an accident occurs. • If a vehicle is damaged as a result of more than one incident, • notation must be made as to the specific damage caused during each incident, • the date and time of each, • what the vehicle was being used for (was it a picture vehicle or a production vehicle?) and • how the accident occurred. • It treats each occurrence as a separate accident, and a separate deductible applies to each occurrence. • If you plan to use a picture vehicle for stunt work, include this information in your break-down. Be aware that physical damage to vehicles used in stunts is generally not covered. Automobile Loss Notice HIRED, LOANED OR DONATED AUTO PHYSICAL DAMAGE • This coverage insures against physical damage to: • hired, • loaned and • donated vehicles, • including the risks of loss, theft or damage and collision for certain vehicles the production company is contractually responsible for. • If coverage is required, there must be a written rental agreement between the production company and the employee. • The agreement must establish that the production company is respon- sible for the physical damage to the subject vehicle. • It is strongly suggested that the insurance agency be contacted to confirm coverage for employees' cars. Your agent must review the contract.