The film industry has dominated the attention of the world since its inception. However, most people overestimate the contributions of feature films to the industry. Moviemaking contributes only a fraction of the yearly earnings of film, with short films, documentaries, and music videos making up a substantial portion.
The production of commercials comprises a large part of the film industry because businesses, big and small, rely on these creations to advertise their products to curious consumers. The phrase “short-term production” may imply a less rigorous endeavor.
Despite this, producing commercials still requires the cohesive work of actors, writers, grips, gaffers, sound, lighting equipment, set builders, caterers, and dozens of other crew members. With all the work going into commercials, it is easy for things to fall apart. That is why producers need to insure their projects and protect their productions.
Types Of Insurance For Short-Term Productions
Short-form film production requires just as much creativity and labor as long-form projects. Still, this creativity and labor manifest themselves differently. Therefore, short-form projects are insured differently to minimize cost while retaining safety and protection.
Producers making a commercial to advertise their business or product will choose between two types of insurance: short-term production insurance, which covers a specific production, and annual production insurance, commonly called DICE insurance (which stands for documentary, industrial, commercial, and educational).
Insuring a single project will be cheaper than insuring all projects made over a year. Still, DICE insurance becomes more cost-effective if the producer plans to make more than a handful of commercials. They should consider whether their business will benefit from multiple productions or if only a few projects are necessary.
This contrasts with long-form production insurance. For feature films or ongoing long-form television projects, it is difficult for producers to predict how long their productions will take.
Reshoots and extended productions are routinely required, making it hard to know if an annual or individual-project-based insurance plan is better. Short-form production has the advantage of predicting what route is most economical.
Calculating The Cost Of Short-Term Production Insurance
The exact costs of short-term production insurance will vary from project to project. Even within a specific field, such as commercial production, multiple types of products will result in different insurance needs. Generally, DICE insurance will have an annual one-time insurance premium to cover all productions within a given year.
Because of the extended timeframe, this premium will often be somewhere between $600 and $1000, depending on the details of the commercial and the additional riders for things like animals, pyrotechnics, and celebrities.
Short-term production insurance for an individual project will have monthly premiums that seem cheaper than those of DICE insurance. However, they will add up over time, exceeding the annual premium associated with a DICE policy if there are too many productions. Monthly plan premiums rarely exceed $100, but this is subject to necessary riders.
It is essential to find a broker comfortable with covering all aspects of production while still offering a reasonable price. The best way to do this is to partner with an agency that specifically works within the film industry rather than choosing an insurer who is simply willing to insure film-related works like commercials.
Producers can estimate the cost of their insurance by comparing it to the budget for their commercial. Standard practice is to spend 2% or 3% of the budget on insurance. If the production team knows their budget in advance, they can calculate the cost of their short-term production insurance, no matter which type they choose.
Obtaining Short-Term Production Insurance
Short-term production insurance is only available through a certified insurance broker. With the size of the film industry, producers have no shortage of options for brokers, but not all insurance agencies are the same.
Producers should investigate multiple insurance coverage options to ensure they have found the right match with no necessities uninsured and no irrelevant features covered. Trustworthy insurers will work closely with customers to create this ideal balance of risk protection and minimal or no overspending.
To begin the process of obtaining production insurance for commercials, producers should first develop a complete understanding of their project. Since many productions calculate their insurance costs as a percentage of their budget, producers should evaluate the expected budget of their commercial.
Associated costs could be for location permits, equipment rentals, or worker payments. Insurance is not an add-on to the rest of the filmmaking business; rather, it is an integral part of it with symbiotic relationships with other features. For instance, producers must have proof of insurance to get shooting permits.
Regardless of which insurer the production team chooses, producers will need to have certificates of insurance (COIs) before beginning. COIs should already be on set, as they are required to submit an insurance claim. It is unwise to keep CIOs off-premises; the time that it takes to retrieve them may matter in instances of filing an urgent insurance claim.
Coverage Provided By Production Insurance For Short Projects
Insurance is critical—but what will the insurance actually do to protect a short-form commercial production? While the exact contents of an insurance plan will vary depending on the policy, baseline coverage typically covers a few basics.
Short-term production insurance protects the tools and equipment of the trade from multiple threats. Much equipment is necessary for the simplest project, including cameras, lighting, sound equipment, transportation, and more. If these materials are damaged or malfunctioning, production insurance will help to repair or replace them. Insurance will do the same if this equipment is stolen.
High-quality filming equipment is often costly, and enterprising thieves might make it their target—especially for productions shot in public. Because of this high cost, the majority of short-form productions like commercial shoots will likely rent their equipment.
Even major film studios rent their equipment. Renting is often better for cost, but it can create liability problems if theft or malfunction keeps the producer from returning the equipment. Production insurance will contribute to legal fees if this ever becomes the case.
Of course, behind every piece of equipment is a qualified professional operating it and providing exceptional technical expertise. The film industry would not be as ubiquitous as it is today without the efforts of grips, gaffers, actors, and caterers. In addition to general liability insurance, most production insurance plans include workers’ compensation insurance.
The compensation may be in the form of lost wages if the budget runs thin, rehabilitation costs after injury and even benefits to the families of employees who die on the job. Workers’ comp naturally includes medical insurance for employees left ill or injured after a job.
What Is Not Covered By a Standard Insurance Plan?
Standard short-term production insurance coverage may be comprehensive, but the basics do not cover some aspects of commercial production. These coverage areas are not strictly unavailable but are covered by additional riders to standard plans.
For most policies, animal actors, pyrotechnics, and stunt performers are not typically included in baseline coverage. The main reason is that not every production will require this extra coverage. Commercials could be more malleable in terms of content.
Commercials advertising restaurants and food products often do not have to hire in-person actors, instead cleverly utilizing simple but effective camera tricks to captivate the audience. However, vehicle commercials will require trained drivers for shots of the product in action. Those stunt drivers will have to be insured.
This leads directly to the second reason these riders are not included in the standard coverage plans: they are more expensive. The more risk there is to equipment or professionals, the more likely the insurer will have to pay for a claim. Thus the less they are usually willing to include such elements as covered items.
Thus, the price for insuring workers who specialize in dangerous fields, like working with animals, stunts, weapons, or pyrotechnics, is higher than for other workers. The cost of insuring actors who perform their own stunts is often even greater and not feasible for some productions outside of mainline studios.
This is why working with an insurer familiar with the film industry is critical. These agencies are more comfortable providing comprehensive insurance at a lower cost because they work closely with film producers, commercial teams, and more. Even though an aspect of production will require more riders to insure properly, a producer will still have to maintain their vision.
Relying On Professionals For Short-Term Production Insurance In Commercials
Commercials are often overlooked as forms of filmmaking, but to anyone who has put work into them, the amount of work and dedication is clear. People labor over lighting, staging, writing, and editing to create a product they can proudly display to achieve a business’ advertising goals.
Work this valuable and recognizable should be protected with a comprehensive insurance plan that enables production teams to create the ideal product for their circumstances without fearing financial fallout when something goes wrong.
The team at MFE Insurance are experts in short-term production insurance and have helped studios to safely and securely produce commercials across various business sectors and levels of risk.
Contact MFE Insurance to learn more about the insurance products that we offer or to discuss the specifics of your production schedule so that we can help you create the perfect blend of coverage within your budgetary constraints.