Anna Keizer
Aug 26, 2021

Making Sense of Insurance Costs & Choosing the Right Insurance Policy

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Have a production company or a project coming down the pipeline? Obviously, you know you need production insurance  – for both the right price and the right protections. 

But there are a lot of production insurance options out there, many of which come with wildly different premium rates, coverage types, and exceptions. Choosing the right one can feel intimidating. 

So we’re going to break down why those rates are all over the place, how to make sure yours is commensurate with your needs, and what sets production insurance apart from other policies. 

Said another way, we’re going to put you in the driver’s seat by laying out every consideration you’ll need to know so you can effectively compare an insurance policy and purchase one with confidence.  

So let’s get into it!

A quick recap - what is production insurance?

First things first---what are we talking about when we say production insurance? You probably already know this but, it’s important to start here. 

Production insurance is a type of commercial insurance specifically put into place to protect your production and/or production company in the event of a claim---say, if someone gets hurt on set or a piece of equipment is damaged during a shoot.

For this reason, a production insurance policy will always come with a certain dollar amount that it will cover should a claim be filed. A common limit on such policies is $1 million in general liability and $1 million in auto liability.

And FYI, if you’re shooting in Los Angeles, you’ll need both general liability and auto liability to apply for permits. In rare cases, FilmLA might waive the auto coverage (if you’re shooting in your own house and never leaving it!)...but that’s for another day. 

Types of production insurance

Production insurance can come in the form of an annual policy, which is great if you’re running a production company with a year-round slate of projects.

But if you’re an indie producer who’s about to start on a film, production insurance can also be issued as short-term to cover the few days or weeks that you’re shooting.

We should also mention special event insurance for those much smaller projects. But keep in mind, this would likely be a bare-bones policy---one that might exclude coverage for equipment, stunts, or other common types of coverage.

But if you think your project falls under this category, it’s worth taking a look at your special event insurance options. 

Difference between production insurance and personal insurance

But for the time being, let’s return to that indie producer example…

What if you’re filming in your very own home? 

Can’t you just use the homeowner’s insurance you already have?

We wish it was that easy.

But production insurance is called such because it is tailored to the particular needs and the what ifs that come with any given project.

If you’re just making a home video, okay sure. No need for production insurance. But if you’re using expensive equipment or needing to pull city permits, you may find that your homeowner’s insurance won’t have enough coverage for what you need.

So yes, you need production insurance for a production regardless of length or scope of work.

Know the costs affecting your policy

Why does it seem like so many people are wary of getting production insurance when it can save your production if something goes wrong? 

When it comes down to it, it’s all about knowledge. And sometimes, production insurance feels harder to figure out than the Rosetta Stone. 

Premiums can vary widely. But by making sure you know what goes into those figures, you can come to a broker better equipped to communicate your needs and understand your options.

1. Gross production cost (GPC) & calculating correct figures

As the term implies, gross production cost means the total of your production costs--- including payroll, or, if you’re seeking an annual policy, what your yearly overhead is.

This number, whether for a single project or year-long coverage, is fundamental to getting an accurate premium rate.

To determine that figure, a GPC audit is in order.

A GPC audit should include the following items:

  • Producing staff costs and/or wages
  • Directing staff costs and/or wages
  • Other production staff costs and/or wages
  • Principal cast costs and/or wages
  • Other talent costs and/or wages
  • Extras and casting costs and/or wages
  • Music costs and/or wages (musicians and composers)
  • Camera equipment (rented or purchased)
  • Electrical equipment (rented or purchased)
  • Sound equipment (rented or purchased)
  • Wardrobe (rented or purchased)
  • Property (rented or purchased)
  • Set construction and/or design costs
  • Location costs
  • Studio rental costs
  • Transportation costs
  • Film/video costs (such as cutting or editing)
  • Sound costs (such as scoring and dubbing)
  • Special effects costs
  • Publicity costs
  • Overhead costs directly related to production

We know. It’s a lot. 

But here’s what you don’t need to include in your GPC audit:

  • Cost for story rights
  • Cost for sound rights
  • Cost for music rights
  • Royalties
  • Permanent sets
  • Owned equipment
  • Owned props
  • Owned wardrobe
  • Interest paid on loans for the production
  • Overhead not directly related to the production

Now you might be musing, “On second thought, maybe I don’t need to worry about all this GPC business or production insurance because of the kind of projects I work on.” 

Mmm. You probably still do, though.

Even if you’re not working on a major feature film or television show, that doesn’t mean you’re absolved of needing production insurance.

If you work on...

  • Animated projects
  • Commercials
  • Contract films
  • Corporate films
  • Director reels/presentations
  • Documentaries
  • Industrial films
  • Music videos

You need production insurance. 

Avoid these common cost mistakes

Even when you acknowledge that production insurance is needed, mistakes can still happen. 

Many producers and production companies either: 

  1. Underestimate their gross production cost. 
  2. Or, they fail to update their GPC even when their company grows & production costs increase.

These things can potentially impact whether an insurance brokerage will be willing to cover a claim if this underlying information is incorrect. In addition, you as the producer or your production company might be liable for back fees due to the miscalculated, underestimated figures.

On the other hand, some producers or production companies might indeed be paying too much in their production insurance premiums because their gross production cost is too high!

Either way, calculating an accurate number will only help get the best bang for your insurance coverage buck. Also, make sure you regularly look at your estimates and communicate them to your broker to keep your policy current.

2. Cost of renting and using personal vehicles

Above, we briefly mentioned transportation costs, but let’s take a closer look at what that means.

Even the most modest productions will need props, crafty, and other items shuttled from one location to another---that often means renting trucks or other vehicles. Over the course of a project, you might also have crew driving their own vehicles on production business.

Both of these scenarios--vehicle rentals and the number of workers driving their own vehicles for project-specific tasks (excluding commuting)--figure into the cost of production insurance.

Production insurance protects against vehicle accidents that occur specifically during a shoot. 

If you don’t purchase production insurance and are banking on using your personal auto insurance in the event of an accident, you will likely be looking at expensive out-of-pocket costs because you likely won’t be covered for such an event.

If your crew finds out that you didn’t get production insurance, and one of their vehicles is involved in an accident, well…it’s also going to be a financial mess that ultimately will fall on your shoulders.

3. Amount of payroll will affect policy cost

Remember when we mentioned in that handy dandy GPC audit list all of those people who need to get paid for your production? 

Let’s dig into a few questions to consider that will impact your cost totals.

How many people are you employing for your shoot and what are you paying them? Were they all hired in the same state or spread out across regions?

The amount of payroll will affect your workers’ compensation numbers and subsequently the cost of your production insurance.

If you’re using an employer of record payroll service like Wrapbook, all of your employees and loan-outs will be covered with workers’ comp as a part of Wrapbook’s service. That means, while your GPC will be the same, your production insurance may just need to cover contractors and volunteers, which can lower your overall production insurance costs.

And based on your estimated payroll costs, you can get a solid and personalized insurance quote in minutes. Check it out as you shop around.

4. Stunts and hazardous activities

Will you have pyrotechnics as part of your project? Or perhaps live animals?

Production insurance can include specific coverage for unusual circumstances that may not be protected by general liability alone. These circumstances include:

  • Animals
  • Drones
  • Pyrotechnics
  • Race tracks
  • Stunts
  • Watercraft
  • Weapons

And yes, they will impact your premium costs.

FYI... Every stunt is different, so each will be quoted individually, which typically includes extra premium. If you know you’ll have stunts, check with your insurance broker to make sure the insurance company is comfortable with the stunts you plan to take on.

Bottom line? Come to the table with accurate numbers

Nobody wants to pay more than necessary for their production insurance. But, you also don’t want to find out after the fact that your policy is inaccurate, which, as we’ve discussed, might impact the viability of its coverage.

When shopping for production insurance, come to the negotiation table with accurate and comprehensive numbers. That will allow your insurance broker to better determine what kind of coverage you need and correctly price out the premium for it.

Why is it important to have additional insured on policies?

The more that’s covered by your production insurance policy, the better. Whenever possible, add additional insured to your general liability coverage.

What does additional insured mean and why do you need it?

An additional insured endorsement is a person or business who will also be protected under the benefits of your production insurance policy.

Because producers and production companies typically work and collaborate with a host of different individuals and entities over the course of a shoot, it’s a smart move to have them listed as additional insured.

As an example, let’s say you’re shooting in a private home and have pizza delivered. The delivery person trips on a step to the front door and breaks their wrist.

Instead of having that (totally innocent) homeowner be responsible for the delivery person’s medical expenses and more through their personal insurance should they get sued, having them listed as additional insured affords them protection under your production insurance.

In short, anyone or any organization used for your production who might also be at risk in the event of a claim, put them on as additional insured.

The good news is that most production insurance policies include “blanket additional insureds,” meaning that you can name as many additional insureds as you need. 

Because production has numerous moving parts, most production policies allow you to name as many rental houses, locations, and others as you need as 'additional insured' under your policy. If your insurance doesn't allow additional insureds, or makes you pay for each COI, that's a sign that you either have the wrong policy for production, or that your policy doesn't cover everything that you think it covers.

When getting your production insurance, check for that “blanket additional insureds” language. If it’s not there, or your provider limits how many additional insureds you can have, you may run into problems down the line. 

Importance of COI access

While you’re at it, make sure to have on hand multiple copies of your certificate of insurance, which summarizes your production insurance coverage and provides the necessary legal protections on set.

You never know who might want to see it – in particular, the people and businesses that you’re claiming as additional insured. And more likely than not, you’ll need more than just a single copy over the course of your production. If you’re already using Wrapbook for your payroll needs, the software requires you to upload a COI to name Wrapbook as additional insured.

Additionally, Wrapbook has a Client Center portal where you can log in and create your own COIs. If your needs are more particular, you can email a broker and they will knock it out as quickly as possible.

Choosing the Right Kind of Insurance Policy - COI - Wrapbook
With a production background, Wrapbook brokers know how fast you need a COI, and they always get it out within the day, often within a few hours.

Just like “blanket additional insureds,” though, most production insurance policies allow  you to issue as many COIs as you need. Again, if your provider wants to charge you for each COI, it may prove wise to look elsewhere for your production insurance needs.

What is the difference between production policies and business owner policies?

Okay, time to get down to the nitty gritty. 

Maybe you are familiar with production insurance and savvy about cutting costs wherever possible---that’s part of what being a producer is all about, right?

So perhaps now you’re thinking, “well, I still don’t need to spend money on a production insurance policy because I already have a business owner policy.”

We get it. You’re already paying a premium for one type of policy---why dish out more cash for another? 

Especially if you’re the owner of a production company, this might seem like a great plan.

But, just as other types of insurance like homeowners or personal auto coverage do not protect against production-specific circumstances and claims, the same often holds for business owner policies.

Can I get away with my business owner insurance?

A business owner policy makes sense when protecting your business in the event of the building burning down or a burglary that results in the loss of equipment.

But odds are, these protections go out the window when something happens during a shoot. 

Why? 

Because that’s not what a business owner policy was intended for. 

Even if you have a business owner policy for your production company as it is a business, it likely won’t have the coverage you need should a claim be filed. 

Business owner insurance is generally less expensive than production insurance, which is why producers try to get by with just that type of coverage. If you have a super simple business and run small productions, you may be okay in the event of a claim.

But don’t count on it. Read your policy to make sure before an accident or other event happens. Sometimes there is an exclusion deep in the policy that wouldn’t matter to a home photography studio but leave an on-set commercial production liable for a huge loss.

And remember, production insurance is written for production. It is the kind of insurance you want should something go wrong on set.

Drawbacks of business owner insurance for productions

A few years ago, Wrapbook looked into a business owner policy that was very popular with production companies. 

Early in the policy, we could see rental equipment was covered. Fantastic. But about 70 pages in, we were surprised to learn that cracked and scratched lenses were covered only in an office setting--NOT on set. 

A single lens can cost upwards of thousands of dollars. Needless to say, we turned away from that policy and never looked back. 

Though a particular case, it does point to the trouble a producer can find themselves in when they assume their business owner policy will provide the coverage they need. Yes, business owner insurance policies are generally more affordable, but often they’re less practical for production companies. 

For example, you may have to specify on your policy every single location and in-transit scenario throughout your production for your equipment to be covered in those locales. Keep in mind, “in-transit” means a description of each instance of where gear is shipped--think FedEx, planes, etc.--to guarantee coverage in those instances.

In short, it’s a lot of work (dare we say, guesswork?) on your part, all to potentially save a few dollars on your policy. 

If you regularly film on location, the lack of in-transit coverage will put your gear at risk if you haven’t thought of every possible scenario of getting it from one place to another. 

So, don’t risk it by intentionally skipping out on production insurance.

How can you find affordable production insurance?

Okay, we’ve hopefully laid out why production insurance specifically is key to your project, your production company, and even your career’s livelihood and longevity. 

So now what? Time to reach out to an insurance broker!

It’s okay to shop around when looking for production insurance but keep in mind that you can have only one production insurance broker at a time at each insurance company. So, if you shop too many places, you may find roadblocks.

Find a service that specializes in production insurance

While many options out there may vie for your attention and premium dollars, consider Wrapbook for your production insurance needs. 

Wrapbook’s knowledgeable insurance brokers specialize in production insurance, so they know exactly what you need whether that’s a short-term policy or annual policy.

But even beyond that...

Get a broker that stays with you well after you buy a policy

Though it’s important to come prepared for any discussion of production insurance, Wrapbook’s brokers also understand that you’re probably not a production insurance expert.

If you decide to go with Wrapbook for your production insurance needs, know that your relationship with your insurance broker only just begins with you buying your policy.

Our brokers are available to answer questions and field concerns long after that policy is in your hands to make sure that you’re getting all that you need from our products and services. 

Wrapping Up

No one, and especially not a producer, wants to spend money where they don’t need to. But consider the many, many more thousands of dollars you may be forced to pay if an accident happens and you don’t have the right coverage.

If you’re ready to discuss options specific to your shoot or your production company, reach out to an experienced production insurance broker at Wrapbook, anytime. Or, get your personalized quote here.

If you’re not 100% ready to purchase and need a bit more info, dive into our production insurance ebook. While familiarizing yourself with production insurance may not be high on your list of thrilling reads, we can promise you that it may – and probably will – save you from a bad situation at some point in your career. 

Disclaimer

At Wrapbook, we're all about providing the very best free resources to producers and their crews. However, this post is not a substitute for professional legal advice. Answers do not create a company-client relationship, nor is it a solicitation to offer legal advice. Seek the advice of a licensed attorney in the appropriate jurisdiction before taking any action that may affect your decisions or rights.

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About the Author

Anna Keizer

Anna Keizer originally hails from the Chicagoland area. After receiving her B.A. in Film/Video from Columbia College Chicago, she moved to California and finished her M.A. in Film Studies from Chapman University. She has also graduated from UCLA’s Writing for Television Professional Program and is currently in post-production on the short She Had It Coming, which she wrote and is executive producing.

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