Film productions are often chaotic scenes, with dozens or even hundreds of people on each set, with each person performing tasks to bring the entire thing together. With so many people, props, vehicles, and other essentials, it’s often only a matter of time until something goes wrong. Knowing that hazards and liability issues are more of a when than an if, most film studios will spend some time looking into annual production insurance.
However, failing to do enough research can lead to a film studio being more vulnerable to liability than they might have realized. Any one of a few common mistakes when purchasing or using production insurance could leave your film studio on the hook for damages or injuries on set. Here are some of the most common annual production insurance mistakes made by film studios and what you can do to avoid them.
Buying a Basic Policy Without Considering Riders
One of the most common errors that film studios make when buying production insurance is to simply purchase a policy and assume that they are now covered. In reality, two different insurers, each offering an annual production insurance policy, will be providing coverage for slightly other things. It is essential to read the fine print of any policy you’re considering and plan for additional riders as necessary.
Riders are add-ons to your production insurance policy that enable it to cover elements or situations that are not included in the base coverage. For example, if you are underwater filming, you may need a rider to cover this specific behavior.
Most annual production insurance policies cover worker injury, equipment damage, and copyright issues. However, assume that more than this baseline coverage is required for your project. It may not cover your specific scenario, or the amount of coverage may not be enough—especially if you’re working with A-list employees.
Using Short-Term Production Insurance Only
Many film studios make the mistake of purchasing short-term production insurance for each project. For some, short-term production insurance protects a single product, which could be as short as one day.
However, if your film studio works on more than one project per year, it can be unnecessarily expensive to insure each separately using short-term insurance.
Instead, consider annual production insurance, which provides coverage for anything you work on during the year. The right choice for your film studio will depend on your volume of work.
Choosing the Cheapest Broker
Production insurance can be costly; plan for around 3% of the total production budget. However, remember that you are not only purchasing the policy itself, but also the insurer. As mentioned previously, you could run into plenty of issues as a film studio selecting a bare-bones, base production insurance policy in terms of coverage and limits.
However, be sure to vet the agency as well. If you receive a price quote that seems too good to be true, think about why. Is the agency less responsive than competitors? Do they work slowly or exclude necessary coverage from their policies? Having an insurance agent that responds comprehensively and quickly when you need them is worth the extra expense.
Not Keeping the COI on Hand
Once you settle on the correct production insurance coverage for your film studio’s needs, you will be issued a COI or certificate of insurance. This proves that you have the range and shows essential information about your policy. However, many film studio managers and executives will stash this document away somewhere and never think about it again—until they need it and can’t find it.
A Certificate of Insurance (COI) readily available on a film set is essential to avoid potential liability issues. It is common for producers and directors to misplace their COI and be at a loss on how to handle an accident or injury-related incidents that may arise.
Resolving the issue can be more complex than necessary without the ability to provide up-to-date insurance information quickly. The best practice is to have your COI on hand so that you don’t find yourself in an emergency where your policy’s details are not readily available. This will ensure you are always prepared for unexpected events and will help limit any disruption caused by these circumstances.
Trust a Reputable Agency to Provide Robust Production Insurance for Your Film Studio
Whether you are a budding film studio working on its first production or a veteran organization with dozens of films, it’s essential to ensure that your insurance coverage adequately protects you. The best way to do that is to work with industry professionals with experience insuring film studios specifically.
MFE Insurance offers customized insurance products to meet your needs, regardless of the types of film productions you create. Reach out to learn more or to schedule an appointment to get started.