The film industry comprises hundreds or even thousands of individuals on each project, and the amount of work that goes into creating even short-form entertainment is substantial. Work done in front of and behind the camera comes with inherent risk—to talent, equipment and more.
In addition, dedicated teams navigating the process of securing shooting permits and managing timetables make up more of filmmaking than most people realize. All these facets of the industry can make insuring a film production complicated since the many moving parts do not always intersect. That is why producers should purchase comprehensive production insurance.
However, even production insurance that covers various potential issues does not have to be expensive. Here is what studios should know about calculating the cost of annual production insurance, including factors that impact the premiums and what may not be covered.
What Is Short-Term Production Insurance?
0While the end result of a small production might only have a screen time of thirty seconds to half an hour, the amount of work that goes into the average commercial, music video or other smaller-form content is still significant.
Producers must manage myriad moving parts, including actors, sound and lighting equipment, cameras, shooting permits and catering, just to name a few. If a single component of the filming process encounters an obstacle, the entire production could be delayed or worse. To prevent this, wise producers invest in production insurance, which provides a financial safety net if anything goes wrong during production.
However, shorter projects, including commercials and shorter videos, are insured differently than larger projects, such as feature films. Short-term production insurance can be neatly divided between insurance plans that cover individual projects and plans that cover any projects that a producer or team manages within a given year.
If a producer only plans on one project, it will be cheaper to purchase insurance only for that project. Conversely, if a producer has multiple projects in mind, annual production insurance (often called DICE insurance) is typically more economical in the long run.
How Much Does Short-Term Production Insurance Cost?
The cost of short-term production insurance varies. Each insurance agency offers different prices that reflect their experiences and specialties, which is why it is critical to work with insurers with experience in the film industry.
Annual DICE insurance will naturally have an annual premium, and since it covers more than other plans, it comes with a higher cost. However, premiums do not usually exceed $1000. Monthly plans are cheaper, with premiums under $100, but they typically cover less.
It is impossible to provide a concrete number that corresponds to how much production insurance will cost because each project is unique and faces individualized risks and challenges.
However, conventional wisdom states that 2-3% of a production’s budget should be devoted to buying insurance. Thus, if a producer knows the budget for their project, they should be able to reasonably estimate how much to spend on insurance.
What Doesn’t Short-Term Production Insurance Cover?
Most production insurance plans combine general liability insurance and workers’ compensation protection. This covers equipment theft, malfunction, property damage and payment to workers if they are injured or cannot continue to work.
Some additional healthcare protections are typically involved with these plans to protect businesses from the cost of employees who require physical therapy or long-term treatment for work-related injuries, adding up to a broad and expansive plan.
However, some niches remain underinsured or not insured at all due to the specificity of certain filmmaking projects and the difficulty in insuring some components. For example, stunt workers are notoriously difficult to insure since their profession is built around the fact that they are put in dangerous situations.
Insurance providers are more reluctant to insure them because of the higher chance they will have to pay for a claim. This is typically the case for aerial photography, animal actors or dangerous special effects such as pyrotechnics.
Instead, insurance for these elements is limited to riders on existing insurance plans. These riders will add to the cost of production insurance, but producers who rely on these elements extensively would be unwise to proceed without them.
Request An Annual Production Insurance Policy Quote Today
The cost of production insurance is highly specific to each individual production or annual strategy. The best way to get an accurate calculation of how insurance will impact your budget is to work with an experienced insurance agency.
Whether for feature film production or projects smaller in scope, experts at MFE Insurance partner with film producers and studios to craft a personalized blend of insurance coverage that addresses their needs. Contact us to discuss your needs and learn more about our online portal that makes insurance claims easy.