CINE Articles

Opening Credits: A Guide to Film Package Insurance

Chubb

By Gene Williams
The Chubb Group of Insurance Companies
July 2008

Most film package insurance policies available from specialized global insurers provide the same basic set of insurance protection for a film or video production, but not all policies or insurance carriers are created equal.

A production could be a short subject or feature film, a commercial or music video, a television series or special, or an educational or industrial video. The medium may be any film or video format or any combination of recording and output media.

In this article, I will pinpoint some of the different exposures faced by select aspects of film productions and how a film producers package insurance policy might respond to each situation

Production Media

Film, videotape and other video or audio media can be easily damaged or ruined by faulty camera equipment or film stock, improper handling or developing, X-ray damage or accidental exposure to light. It can also be lost in transit to the lab or the editing facility.

Production media insurance, traditionally called "negative film and videotape" insurance, responds to the cost to recreate lost or damaged shots or scenes. If it is not possible to reshoot the film, and the production is abandoned, production media insurance may reimburse all insured expenses incurred on the production.

Cast

The completion of a project often depends on the particular skills of individuals, whether they be stars, supporting actors, the director or cinematographer. What would happen to the project if the talent is unavailable, either temporarily or permanently? If the star of a film is injured and hospitalized, for example, a director will work around the absence for as long as possible. But if the production must be shut down temporarily, cast insurance protects against extra expenses - such as salaries and equipment rentals - until production can resume. And if the loss of a cast member results in the abandonment of a project, cast insurance may reimburse all insured expenses incurred on the production.

Props, Sets and Wardrobe

Today's lavish films feature increasingly expensive accoutrements, such as multimillion-dollar sets, high-value cars, boats, airplanes and meticulously constructed costumes. Props, sets and wardrobe insurance helps protect against the costs required to repair or replace these often unique items.

Production Equipment

Much of the costly, sometimes fragile equipment used in filmmaking today is rented for the duration of a specific project. The production company is responsible for anything that happens to the equipment during that time period.

Production equipment insurance, traditionally referred to as "miscellaneous equipment" insurance, helps protect against loss or damage.

Care, Custody or Control Legal Liability

When movies are shot on location, rented or borrowed buildings and other property may be easily damaged. Whether in a mansion full of fine-art objects, on an aircraft or adjacent to landscaped gardens, protection for the real and personal property of others is critical and often required.

Care, custody or control legal liability insurance, traditionally known as "third-party property damage" insurance, provides this protection.

Damage to Property

Despite being insured for its equipment, film and people, a project can still incur large extra expenses following a loss or damage to property used in the production. If a production is interrupted because of damage to property or facilities, damage to property insurance may pay the additional costs to complete the production. This was previously called "extra expense" insurance.

Other Exposures

In addition to these basic exposures, insurance may be available to help protect against extra production costs when shooting is interrupted by a variety of other causes. Examples include order of civil or military authority, imminent peril, prevention of ingress or egress, mechanical breakdown of equipment, loss of utilities or other services, seizure or quarantine, and civil protest.

Optional property insurance may be available to help protect against loss or damage to office contents, animals, library stock and money and securities.

Selecting an Insurer

The movie business has changed dramatically in the past century. The $4 million that funded the extravagantly produced Gone with the Wind in 1939 would not be enough to produce some of today's commercials or music videos. Additionally, Hollywood is no longer the only home to the film and television production industry, which now extends from Argentina to New Zealand. And digital technology is rapidly changing the landscape of cinematography, postproduction and distribution.

With escalating production costs, global filmmaking and changing technology, the film production business is more complex and challenging than ever before. Film producers need a global insurer with a reputation for properly handling claims that understands the risks of the film industry and is able to meet their needs. Film producers should look for a package policy that extends protection through post production, not just through principal photography.

Gene Williams is a vice president of Chubb & Son and worldwide entertainment manager for Chubb Commercial Insurance, based in Whitehouse Station, NJ.

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