Secrets of a Successfully Insured Production 

by Sam Levy

If the dirty little secrets of production insurance are worrying you, stop worrying - and start asking questions. That's the only real secret to a successfully insured production. You can explore all the options in the world with your insurance agent, but unless you ask the right questions to begin with, the disconnect between what you think you're getting and what you're really getting can become costly.

Let's start by taking a look at the most common types of coverages for film and video production insurance, and outlining some of the important exclusions. To ask informed questions you'll need to know the basic coverage definitions, especially those that relate to general liability (often misunderstood), property, inland marine, workman's comp and specialty coverages.

It's this simple: if you understand the needs behind the different types of coverage, you'll be able to ask the questions that help correctly insure your production.

Where Do I Get a Policy that Covers Everything?

Sorry. There's not an insurance policy on earth that covers every eventuality. Expect your insurance to cover the major causes of loss that are typical and can be predicted; that's why the insurance company works so hard to make a complicated legal document explaining what is - and is not - covered. But every claim is unique. And the world is a crazy place where extenuating circumstances can make clarity of coverage seem frustratingly impossible. Accept the fact that there is always the possibility of a one-time event that won't be covered no matter what insurance policy you buy. In the eventuality of a major claim involving a lawsuit, it can come down to who has the better lawyer and can sway the judge or jury. That's just the way it is.

Now for the good news. You can prepare to cover your production as securely as possible by working with an agent who can explain your coverage options. Don't leave it to the agent to do the understanding or make the decisions. You must do that. An agent probably can't predict whether you'll be covered if the noise of your production traumatizes llamas on a neighboring ranch, but he or she can tell you what is covered, and for how much. The more homework you've done, evaluating your needs and possible eventualities, the better information you'll get - and the less risk you'll be exposed to.

How Do I Know What to Cover and What Not to Cover?

The state of New Mexico and most municipalities require a $1 million general liability minimum limit in order to obtain film permits.

Larger productions (budgets over $200,000) often buy package policies that include a number of what are called "producer's risk" coverages. One of these production package policies may have general liability limits of more than $1 million per occurrence, with a $1 million total maximum payout per policy period.  A producer's risk package often includes coverage for the total budget, if necessary, to re-shoot an entire production. Smaller productions tend to pick and choose the actual coverages (called lines of business) they are most likely to need. Your lines of business will be added to your core general liability policy.

Large productions tend to factor their liability and producer's risk insurance premiums at around $15,000 per $1 million of budget, not including workman's comp.

            Nationwide (U.S. and Canada) general liability coverage for short-term, one-time productions with budgets under $1 million starts at a minimum premium of $500 that covers up to 10 contiguous days of principal photography, and goes up from there.