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Adam is a production insurance broker at Wrapbook. Before getting into production insurance, he was an Assistant Director on non-union films, as well as, a nonprofit director in Baton Rouge. He is also an avid creative writer, home brewer, and fan of his hometown Jacksonville Jaguars.
At Wrapbook, we pride ourselves on providing outstanding free resources to producers and their crews, but this post is for informational purposes only as of the date above. The content on our website is not intended to provide and should not be relied on for legal, accounting, or tax advice. You should consult with your own legal, accounting, or tax advisors to determine how this general information may apply to your specific circumstances.
Welcome back for part two of our series on budgeting for production insurance. Last time, we covered some of the most common mistakes made when considering production insurance, as well as what filmmakers can expect market-wise depending on their production budgets.
Now we’re breaking down what underwriters evaluate when it comes to potentially offering production insurance and how to find the right insurance broker for your needs.
Let’s dive in!
Underwriters assess a range of factors to determine the level of risk associated with insuring your production. Understanding these considerations can help you better prepare and potentially reduce your insurance costs.
Filmmaking is full of surprises, and an underwriter wants to make sure that you will have enough money in your budget to finish the production. They will usually want to see 10% budgeted as “contingency” in order to deal with those surprises. If you show that your investors are very experienced with film, or that the money is fully in the bank, it’s possible they’ll lower their contingency requirement.
How experienced are your producers? Director? Stunt coordinator? Hiring experienced personnel is one of the first risk management steps a filmmaker will take, and will go a long way to helping an underwriter feel comfortable writing the policy.
Unless you bind a short term policy, you likely expect your insurance to cover post-production. An underwriter will want to know how you are storing your data, how long you will be storing it before handing it over to your client or distributor, as well as have contracts on file with any post-production or animation houses that you work with.
“Cast coverage” protects the production if it is delayed or exposed to other losses due to injury, illness, or bereavement of a covered cast member (again, the cast member’s health and wellness is covered by Workers’ Comp).
Cast coverage is an extra cost, and some providers won’t write it depending on the budget. Fun fact: if you have a key prop, puppet, or other item that might cause a production delay if damaged, we can schedule that here similar to a cast member.
Will you be renting any sports cars, or equipment that is valued over $100k? If so, we’ll need to schedule it on the policy. It might increase the premium, it might not, but a higher deductible will apply.
Will you be filming in mansions, museums, or other expensive locations? If so, we’ll likely need to know your protection plan for these locations. Sometimes an insurance carrier will write a special property damage floater to cover these activities, other times they just raise your property damage deductible. Either way, we would need to list it on this policy, because not only is there more expensive and breakable stuff in these places, but the owners also tend to be more litigious.
Every filming location has some environmental risk. If you’re filming in the Gulf South during hurricane season, or in California during fire season, the insurance carrier may release their quote with exclusions for losses due to fire or hurricane. If you submit a detailed safety and/or evacuation plan, the underwriter may be willing to remove that exclusion.
Every set will have visitors: studio reps, local legislators, representatives from the location, etc. However, an underwriter is going to assume these set visitors will be related to the production in some way.
If the general public is involved, or if there is a live audience, the underwriter will need to know who is responsible for the spectator liability—the production, the location, or something else. If an actor is known for bringing a large entourage to set that are unrelated to the film, the liability exposure increases, and an insurance provider may decline to quote because of it.
If you’re renting a house for the production, or for crew housing, we’ll need to have those contracts on file. Additionally, if you’re bringing in contractors to provide special effects, catering, or other kinds of contract work, we’ll need to have those contracts on file.
The contracts show what your responsibilities are (and, by extension, what your insurance carrier’s responsibilities are), and what the contractor is responsible for. Note: This refers to proper contractors with their own insurance coverage; if a contractor does not have their own insurance the production will be responsible for covering them.
In addition to basic production insurance, there are specialized coverages you may need depending on the specifics of your project. These cover the unique risks associated with certain activities or locations involved in your production:
If you’re using a drone, going out on the water, or going outside of the US and Canada to shoot, the underwriter may require you to have a specialized policy to cover that exposure that their insurance provider doesn’t offer.
A broker you trust can help you find these coverages elsewhere in the market. And if your broker doesn’t offer them, we offer all of these at Wrapbook and are glad to get them for you, even if your main policy is elsewhere.
If your production is a podcast or a live broadcast, you may be required to have Errors & Omissions (“E&O”) in place before the underwriter will bind your production insurance. This may also be the case if you are making an animated film (due to potential copyright claims regarding the animation) or if your production deals with very sensitive subject matter.
Regardless, you will eventually need E&O for distribution anyway, and its policy term for features and TV is three years. So even if it’s not required up front, it’s a good idea to get E&O early to protect against any script claims, etc., and it will still cover you for what you need afterward.
The content of your production and the regulatory environment of the state where you're filming can significantly impact your insurance options. Here's how these factors may influence the availability and terms of your production insurance:
Just like different insurance carriers have different risk appetites for budget, types of production, etc., many also have restrictions on the content they will insure. This is because certain carriers want to stay away from certain material for reputational reasons. If your production could be perceived as utilizing hard- or soft-core pornography, or if the content could be perceived as promoting the commercial cannabis industry, it may not be a good fit for certain insurance providers.
Every state has to approve that long list of forms that go into your insurance policy, and an even longer list that are just referred to. A form that isn’t approved by the state is considered a “Non-admitted” form and subject to a “Surplus Lines” tax.
If the form might affect your coverage—like if the form removed wind coverage during hurricane season—the underwriter will ask your broker, and your broker will make sure you are aware. Your answer may impact whether an insurance company will write insurance in your state. In some cases, like the State of Washington, state regulations and the use of non-admitted forms—and associated Surplus Lines taxes—drives premium prices higher than in other states.
Choose your production insurance based on the provider that gives you the best combination of cost, coverage, and convenience.
Of the three, coverage is the most important, because this is what protects you in the event of a claim that could sink your film. However, due to the limitations of budgets and time on production, cost and convenience are practicalities that can’t be ignored.
Choosing the right production insurance involves asking your broker the right questions. These inquiries will help you understand the cost, coverage, and whether the insurance fits your production's specific needs:
Cost is the first consideration for most filmmakers. It’s an important one, but shouldn’t be your only consideration. Buying cheap usually leads to more costs down the line, or exposure to something you assumed would be covered.
Most of the production insurance providers’ coverage is going to be very circumspect and competitive in pricing; just make sure your stunts and other concerning items are accounted for. If you’re quoting with Abacus, then you, the filmmaker, will need to be your own risk manager and make sure everything is quoted correctly.
Your broker will match whatever requirements you need, but they won’t know about them unless you tell them first. Think about the permits you will need to pull, the requirements from your various rental houses, and any location requirements, and make sure your broker is aware. That way they can bake those requirements into the quote to avoid having to increase the coverage—if necessary—later.
Check out the “What are underwriters looking for?” section above. Have you accounted for all of these things that the underwriter is looking for? If not, then the quote doesn’t yet represent your production, and it’s possible a claim related to a stunt scene, boat scene, or production delay due to your protagonist’s illness might not be covered. If you have accounted for all of what the underwriter is looking for, then you’ll be very confident about what is covered on the policy, and what isn’t.
Depending on the location or the parties involved, the insurance provider may apply certain terms and conditions.
For example, if a production is shooting out of the country, the insurance provider may require certain details about how equipment is stored. Or if a pyrotechnic device is being used, the provider may require the public to be a certain distance from the blast. Some hazards will not be allowed—Abacus won’t cover pit bull dogs or car skidding scenes, for example.
You will need to decide if the terms and conditions are acceptable, whether you need to change your plans in order to make them acceptable, or if you need to ask your broker to go with a different insurance provider.
Working with an experienced production insurance broker that you trust goes a long way. Surprises occur on every production, and a broker you trust can help you weather those surprises with minimal impact on your schedule.
They can also anticipate issues you may run into in the future, saving you time and energy. If your trusted broker hasn’t offered you the best combination of coverage and price, consider signing a “broker of record” (BOR) letter to move that quote over to your broker. Or, if that isn’t in the cards, it might be worth it to you to pay a little more in order to work with the broker you trust, so long as the policy fits your needs.
Production is busy, and sometimes you need a certificate of insurance (COI) at midnight. Your broker is likely in bed at that time, but if your broker has a COI portal, you and your team can log in and create basic COIs on your own.
You’ll still have to contact your broker for COIs with specialized language, but a portal means you can meet the vast number of COI needs on your own time. Note: Abacus has its own portal; other carriers don’t and you’d need to issue COIs through your broker’s own portal, if they have one.
Production insurance is complex, but it’s not that hard to budget for. Hopefully our comprehensive breakdown helps you set realistic expectations for insurance for your budget range and project, as well as debunk some of the common myths and mistakes low budget filmmakers run into when applying for insurance. If you missed part of our series, you can check it out here.
At the end of the day, if you’re working with a broker you trust you’re never on your own. Your broker can help you understand your coverages, as well as anticipate issues you’ll run into later. If your broker also has an in-house payroll service, like Wrapbook does, they can help on payroll issues too!
