Paul Cable of Media & Entertainment Insurance Services has been operating in the Media Sector for nearly 20 years. Here he explains some of the potential pitfalls with Production Insurance and the types of cover available.
As with any insurance no one really wants to buy it but clearly there are both financial concerns and legal requirements which producers should be aware of.
In this country, there are two areas of compulsory insurance. Employers Liability and Motor Insurance.
This is a statutory requirement. In accordance with the 1969 Act all companies must have Employers Liability Insurance with a limit of not less than £10,000,000. This cover can be purchased in two ways, either on a short period basis for a particular production or more cost-effectively on an annual basis.
Also, as with any motor vehicle owned privately, a statutory requirement. Cover can also be purchased on a short on long term basis, with the obvious cost benefits for a long-term policy. Most hire car companies offer insurance with vehicles, it is often more cost-effective to take insurance on unit vehicles through the Hire Company. Please, however, bear in mind that there are often problems with Hire Companies in employing drivers under 25 years of age.
Crewmembers and Production Personnel should have their own motor insurance for usage on the production. If there are additional costs to them for this the mileage allowance should cover it.
However, for action vehicles, whilst being filmed, normally you would be responsible for the insurance and this should be discussed with your broker once you have a shooting script.
NON COMPULSORY INSURANCE
Depending on the size and subject of the production there are other key insurances that should be considered.
Public Liability protects the Producer/Production Company for their legal liability for injury to third parties and damage to property. Limits of cover should be a minimum of £1,000,000, on average though the cover is £5,000,000. Often locations (e.g. The Mayors Office in New York, other public buildings) will require evidence of insurance in the form of a certificate, which the broker can issue. They may also ask to be named as an "additional insured" on the policy. Again the broker can arrange this for you.
This can also be purchased on either a short or long term basis Many companies now purchase this annually. The cost is based on turnover, for example a £250 annual premium for cover of £100,000. Its important to be aware that this does not cover the Producer or indemnify him from legal action if Health and Safety regulations are broken
One stumbling block relates to hire of Equipment. There are occasions where equipment is provided to production companies "free of charge". This is normally on the proviso that equipment is insured on a replacement basis and in addition, loss of use or loss of rental cover is included. Many facilities companies may request them being noted as a loss payee so that any claims monies are paid directly to them. The "free" equipment therefore does attract costs and its worth contacting your broker with a values list so that you are aware of the costs involved. The Facilities Company will normally ask to see Certificates of Insurance before they release the gear. This cover can also be purchased either on a short-term or annual basis.
Negative or Videotape Insurance
In simple terms, this protects the material itself and meets the cost of any re-shoots that may be necessary. Again, producers should consider whether or not this is really necessary in terms of the financial exposure, as on occasion it may be more cost effective to go out and re-shoot the damaged material and absorb the additional costs. Policies are also available on a short-term or annual basis subject to production turnover.
Props, Sets and Wardrobe
Again, Producers should consider the values involved versus the cost of such cover.
This protects the production for additional production costs incurred as a result of physical loss or damage to key facilities or equipment. Frequently, if equipment is damaged, it can be replaced at short notice without incurring costs. More of a problem would be if you were filming at a key location for a number of days and a fire at the premises created continuity problems. Obviously, if you have a key set, extra expense should be purchased as any thefts/damage may involve serious financial delay.
This should be purchased on an annual basis. It is worth reviewing the values involved each time this renewal takes place, as you would with your own household contents insurance.
Production Money Cover
Is available but if producers are able to keep their cash levels to a minimum, this may be unnecessary.
Cast Insurance or Key Person Insurance
This protects the production for additional costs as a result of illness/accident to key personnel. Again, the producer should investigate their financial exposure but also be mindful of any policy excesses or deductibles (You have to pay this amount first in the event of a claim) and on many occasions this may be unnecessary. This cover is predominantly for the cast of drama productions (where obvious continuity problems arise) but it is also worth bearing in mind for other types of programming such as factual programs where you have key staff, for example the Producer may also be the Director and Presenter.
Travel Insurance will be necessary if sending crews overseas or Personal Accident only if filming in hazardous situations such as aerial photography here in the UK. Usual Cover is £50,000 Personal Accident per person.
Health & Safety
Health and Safety has become a particularly key area over the last 5 to 10 years and again producers should be mindful of their legal obligations. There are many bodies who can assist in this area.
There is always a duty of disclosure, by the producer to the broker, and you should provide all information requested. Particular emphasis should be placed on aspects of hazardous filming, stunts, etc. Failure to disclose any information to the broker may involve insurers declining the claim.
Please also bear in mind that all figures quoted will be plus insurance tax, this is currently 5%.
It is important to realize at the end of the day your broker is working for you and is paid a commission by the insurance company. The relationship you have with the broker and a 24-hour service is of paramount importance, normally you will be supplied with details of who to contact out of hours, obviously it is vital that your broker understands the business.
In the event of a claim the use of Specialist Loss Adjusters is also very important, and where appropriate, contact numbers will be provided.
As a Specialist Broker, operating in this sector, I trust my comments are of use to producers. Most of the other brokers have Insurance Guides, which may provide more information. Of course the information provided here is very general and Im sure you will have specific questions relating to your own Production. I would be very happy to discuss these with you; you can contact me on the following numbers;
Media & Entertainment Insurance Services LTD
Tel. No. (+44) 020 8460 4498
Fax No: (+44) 020 8460 6064
Mobile: (+44) 07977 409520