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Taylor Davidson

For Production Liability Insurance, you can contact Taylor Davidson directly by phone or by email:

1(855)624-2787

taylor@neilbenton.com

 

Production Insurance Explained

3 CRITICAL POINTS

1) Your liability doesn't end when your insurance does.
2) Your insurance has NOTHING to do with whether a lawsuit can be brought against you or the outcome of any lawsuits. It simply protects
you in the case of a lawsuit.
3) In order to have coverage (generally) productions need to be produced/owned in the name of the insured and property owned/rented needs to be in the name of the insured.

THE BARE MINIMUM

Generally, the absolute minimum your company needs to comply with the insurance requirements of shooting locations is the following:
1) General Liability (including "City and Other Special Certificates")
2) Third Party Property Damage
3) These and other coverages are explained in the following sections.

LIABILITY INSURANCE

Liability policies cover the cost of legal defense and any settlements (up to the limits of the policy) arising from a claim against the company or individual for some type of damage or negligence.

*****Common Exclusions***** Stunts, Pyrotechnics, Aircraft, Watercraft, Animals, Fight Scenes, Blanks, Squibs, Guns, Live Gangster Rap Music,
Pornography ("Hard" or "Soft").

If your film will include any of the preceding you need to be sure to discuss it with your insurance broker as they may need to amend your policy or put you with a different carrier to ensure that you have coverage.

TYPES OF LIABILITY COVERAGES

I. General Liability

Definition: "Insures against third party bodily injury or property damage losses arising from normal business operations."

Many times referred to as "Slip and Fall" coverage.

Rate is determined by total budget and term.

Important Note: This insurance does NOT cover your crew, cast, or any equipment or property owned or in your control (rented cameras, dollies, etc)

Important Note: "City and Other Special Certificates Endorsement" Most cities, municipalities and some other entities require “special wording" on their certificates or have a special form they require be completed. This endorsement allows acceptable certificates to be issued to these groups.

II. Specialty Liability

A. Workers Compensation
Definition: "Benefits paid to a worker to compensate for losses caused by a work-related injury or illness."

Rate is determined based on gross payroll.

Important Note: Worker's Compensation Insurance is mandatory for all incorporated business with employees or independent contractors in their employ. This includes cast and crew. Nonincorporated individuals (sole-proprietors) are still suggested to purchase this coverage as protection against lawsuits.

Important Note: The business purpose of Worker's Compensation insurance is to protect against lawsuits. When a company has Worker's Compensation coverage an employee injured on the job may select to take benefits under the insurance policy (normally very easy to obtain and quickly paid out) or may sue for damages. If they select to take benefits under the insurance policy they are normally barred from suing.

B. Multimedia Production / Producer's E&O
(Related Phrases: "Errors and Omissions" and "Professional Liability")

Definition: "Policies available to the various professions that require protection for negligent acts and/or omissions resulting in bodily injury, personal injury, and/or property damage liability to a client. These policies cover claims arising from PROFESSIONAL as opposed to GENERAL errors and negligence."

Rate is determined by type of production and budget.

Coverage varies on E&O policies depending on the field it is written for.

Common coverages under a Production / Producer's E&O policy would be:

• Unauthorized use of names, trade names, service marks, titles, formats, ideas, characters, character names, characterizations, plots, musical compositions, performances, slogans, program material or any similar material.

• Breach of implied or implied-in-fact contract arising out of the alleged submission of any literary, dramatic, musical or other similar material, or breach of trust and confidence arising out of any such submissions.

• Invasion of privacy or publicity

• Libel, slander or other forms of defamation

• Infringement of copyright

Important Note: Unlike most liability policies, legal defense costs are normally listed as a separate limit on Producer's E&O.

C. Automobile / Watercraft ("Movie Boat") / Aircraft.
Definition: "Insures against third party bodily injury or property damage losses arising from the use or maintenance of vehicles."

Rate is determined by type of vehicle, driving history of authorized drivers.

Two types of coverages:

• Owned

• Hired and Non-Owned ("Rented")

Important Note: An employer's legal liability can extend to their employees any time they are within a designated work time, which can include breaks and commuting to and from work.

D. Excess Liability
(Though not exactly the same thing, "Umbrella Coverage" is sometimes used synonymously with "Excess Liability")

Definition: "Insurance coverage that is written in excess of primary insurance. It is designed to increase the limits of liability, thereby providing catastrophe coverage. Excess liability coverage does not respond to a loss until the amount of the loss exceeds (or exhausts) any existing primary policy limits."

Rate is determined by size of policy and type of productions being covered.

PROPERTY INSURANCE

Property policies cover the cost of replacement or the increased cost of doing business (up to the limits of the policy) which arise from the loss, damage or destruction of physical assets. All property policies are rated based on the value of the property/expense covered and the probability of loss.

Types of Property Coverages:

I. Equipment, Props, Sets and Wardrobe, camera, sound, lighting and miscellaneous rented equipment. (Owned equipment can be covered separately by a Floater). Props, sets, and wardrobe are covered.

II. Negative Film or Videotape & Faulty Stock, Camera & Processing
Damage or destruction of raw film or tape stock, exposed film or videotape, faulty stock, faulty cameras or lenses.

III. Extra Expense
Extra expense reimburses the insured for the out-of-pocket expenses in the event of the interruption, postponement or cancellation of the declared production, as a result of loss, damage or destruction of property or facilities contracted for use by the insured.

IV. Third Party Property Damage
Covers damages to locations while it is in the care, custody and control of the insured (i.e. damage to a house that you are shooting in).

V. Equipment Floater
All risk, worldwide coverage for scheduled entertainment related equipment including Cameras, Production, Editing, Musical, Theatrical and miscellaneous items. These policies are written on an annual basis and provide protection for equipment owned by an individual or production company.

Examples of coverages under an equipment floater include:
• Editing/Post-Production Equipment
• Recording/Studio Equipment
• Sound/Location Recording Equipment
• Musical Instruments/Band Equipment
• Camera/Production Equipment
• P.A./Sound Reinforcement Equipment
• Rented Equipment to replace lost/damaged owned equipment
• Office Contents
• Theatrical Equipment
• Miscellaneous Unscheduled Equipment
• Negative Film/Faulty stock
• Extra Expense arising from the loss of owned equipment

Important Note: Generally items would be specified by type, make, model, serial number etc, however many small low value items may be covered under a "blanket".

VI. Cast
Definition: "Provides coverage for additional or extra costs incurred in the completion of the film over and above the normal budgeted costs, occasioned by the death or disability (accident or sickness) of any specifically scheduled person."

This is highly specialized insurance specific to the entertainment industry though it is similar to"Key Person" insurance in the business world. This coverage is normally REQUIRED for any films/productions that are receiving financing from a public source (banks, investment firms, private equity groups, etc). It is a pre-requisite for obtaining a "Completion Bond".

There can be very specific behavioral and activity restrictions placed on an individual covered by a Cast Insurance policy. These restrictions are normally written into an actor's contract and cover such activities as extreme sports, alcohol & drug usage, travel and other possibly risky activities.

SURETY

"Surety" is another word for bonds or bonding. A surety bond is used to guarantee some financial arrangement is satisfied. Unlike insurance, where the insured's responsibility ends with the payment of their premiums, a bonded individual, if the bond is paid out, is responsible for the repayment of the bond.

A common example of a surety bond is a "Bail Bond". Many individuals accused of a crime are given the option of awaiting their trial in custody or be released for the time in exchange for a payment of some amount of money.

This money is held by the court and then returned to the individual or their family when the person returns as agreed. However, many if not most individuals cannot pay the court imposed amount and so instead they pay a lesser amount and agree to have a "Bail Bond" issued on their compliance with the court order. In exchange the bail bonds company agrees to pay the court if the individual does not comply, does not show for their court date. This is when you get bail bondsmen knocking down people's doors to recapture and bring in their client in order to not lose the bond money.

Surety relates to the production industry in terms of "Completion Bonds". A "Completion Bond" guarantees payment in order to finish a started project or satisfy any loans taken to finance a project in the case it cannot be completed. The best example of this would be the loss of a critical actor without which the project cannot be finished.

As stated above, these bonds are normally only required when third parties (banks, studios, other financiers) have a financial interest in a production.

PACKAGE POLICIES

Packages combine a number of coverages (liability, property, extra expense, etc) into one policy. These policies provide convenience and many time cost savings over purchasing coverages individually.

Types of Package Policies:

I. Short Term / One-Shot Productions
Provides a spectrum of insurance coverages at competitive premiums for short term productions ranging from 60 to 180 days, and for longer more complicated productions being insured by themselves.

II. DICE/Annual Productions
(DICE: Documentary, Industrial, Commercial & Educational)
Provides a spectrum of insurance coverages at competitive premiums on an annual basis to production companies engaged in multiple productions during one year. These policies are normally significantly less expensive but require prior insurance experience (at least 2 or 3 previous insured projects by the producer) before most carriers will allow them to be written.

III. Foreign Productions
Similar to the above packages but provides coverages for international productions.