The Independent Moviemaker - Beginner's Guide to Production Insurance

Budget is the primary concern facing most independent filmmakers. With limited resources and the desire to get as much money on the screen as possible, many independent producers want to shoot without insurance; however, this can be a recipe for disaster. In today's litigious society, the protection offered by production insurance is more necessary than ever. With this in mind, here are some basic types of insurance available to filmmakers. Only you can decide what level of protection you are comfortable with, but a basic knowledge of production insurance is something that every filmmaker should possess. The thousands you spend today may save you millions later.

Basic Types of Production Insurance

Worker's Compensation
Generally required by law, this insurance provides coverage for medical, disability or death for cast and crew injured on the job. Independent contractors and freelancers will usually be considered employees to be covered under this insurance.

Comprehensive Liability
This insurance is required for filming on public roads or on property that requires filming permits. It covers vehicles (except aircraft and watercraft) and insures the company against bodily injury claims and property damage caused as a result of filming.

Property Liability
Covers the production company in the event any property being used by the production is damaged. This coverage is slightly different than Comprehensive Liability in that it doesn't cover damage caused by motor vehicles. Basically this policy protects the company from damage to locations while they are being used by the production.

Props, Wardrobe and Sets Coverage
This type of insurance covers damage to any props, sets, set dressing, costumes etc... that are used in making the film. This coverage is especially important if your production is 'borrowing' expensive props. On one production I worked on as Art Director, we were loaned about $100,000 worth of antiques. Insurance would have covered the costs of these items as a result of damage or theft. Many vendors I contacted were willing to deal with us and give our production very valuable items at little or no cost because we were insured should something happen to them. In the end, the insurance actually saved us many thousands of dollars.

Cast Insurance
In the event a cast member or other key personnel becomes ill or dies during the production, this insurance reimburses the production company for extra expenses incurred as a result of the delays caused by the incapacitation. When John Candy died during production on Wagon's East, the production company making the film received an insurance settlement as a result of carrying this policy.

Negative Insurance
This type of coverage protects the production company from faulty filmstock as well as damage to sound tapes and exposed film. It typically does not cover mistakes made during production such as faulty loading of film or errors occurring during the development of film.

Equipment Coverage
This insurance covers damage to camera and grip equipment. If you think renting that camera was expensive, try replacing it!

Extra Expense Insurance
This insurance covers the production company in the event damage to production facilities or equipment causes delays in production. The additional costs incurred to extend shooting time due to such events is paid for by the insurance.

E & O Insurance
We saved the best for last. Probably the most important insurance coverage you can get, Errors and Omission Insurance covers your film's story. Basically it provides protection against lawsuits alleging the unauthorized use of titles, ideas, and other copyrighted materials. E&O insurance also offers protection against allegations of libel, slander, defamation of character or invasion of privacy. For example, if you fail to get a release for a person who accidentally appears on screen, this person may sue you. E&O insurance covers lawsuits in most cases like this. Errors and Omission insurance is usually required by distribution companies prior to releasing your film.

This insurance typically requires the use of an entertainment attorney who will have gone over the script looking for any potential problem areas, checked the copyright information, determined original ownership of any rights associated with the story. The attorney will also need to check title clearances, music rights, SAG releases, location releases (primarily for distinctive locations), and other factors.

The basic concepts covered by E&O are embodied in the disclaimer seen at the end of most films -- All characters and events appearing in this work are fictitious. Any resemblance to persons living or dead is purely coincidental. This statement alone does not protect filmmakers in the face of a determined lawsuit. This is but one area that E&O insurance offers protection for filmmakers.

Because E&O involves lawyers it can be quite expensive, but considering what it covers, it is worth the expense.

Conclusion

There are many other forms of insurance available to filmmakers including Completion Bonds and more specific types of coverage, but these are the basic types used for many independent productions. As with any legal matter, it's best to consult with an experienced lawyer when deciding whether or not to use production insurance.

This article is for general educational purposes only and in no way is considered to be legal advice.