Film production is an industry with hundreds of moving parts. Even smaller productions, such as commercials, music videos, or short films, can rely on the labor of tens or even hundreds of individuals over the course of the project. Behind the camera, dozens of systems interact similar to the gears of a mechanism in motion.
Because of the scope of film production projects, it is common to worry that something might break. Producers rightfully dread a production going over budget or getting mired in payment disputes and scheduling conflicts.
They know that they will need production insurance to keep the machine running smoothly. But what does production insurance offer? And what kind of production insurance does a short-term production need? Here is what you need to know.
What Does Production Insurance Offer?
Production insurance protects and maintains the creation of a film like any insurance protects its subject: it offers financial reimbursement and security in the event of unexpected mishaps or accidents. Production insurance plans can cover numerous potential incidents, but almost all plans include coverage for essential aspects of any production.
General liability insurance is tied to premises and locations. For film production, this would be the set or shooting location. The insurance would pay to repair or replace the equipment if the production encountered an incident such as property damage or theft.
This is very important for film production, since buying film equipment is almost never viable (especially for short-term productions). Instead, film equipment is generally rented, and damage or theft of this equipment would be the renter’s responsibility. Thus, general liability insurance is necessary.
Equally important is workers’ compensation insurance. Film equipment is only as valuable as those operating it and those performing in front of it. Workers’ comp offers financial payment for medical bills when an employee is injured during (and due to) the production.
Sickness and physical injury are covered so long as the employee was exposed on the job. In the event this exposure leads to death, workers’ comp also offers money to the family of the deceased. Those who need physical therapy or rehabilitation can also be covered.
The Difference Between Short-Term & Annual Production Insurance
Both short-term and annual production insurance offer the above coverage. Still, they do so in different ways (and both apply to productions, even though only one is named that way). One way to insure a short-term production is to insure only that production itself.
The coverage would apply to that project only and would require monthly premiums. In the case of a commercial, the insurance coverage would be defined by that single production, and another plan would need to be purchased if another project began.
Conversely, annual production insurance (sometimes called DICE insurance) is not defined by the length of the production, but by the time elapsed since the insurance is bought. So when one commercial’s production ends, the insurance coverage doesn’t end with it. It extends for the rest of the year. If a producer has more than one project within that year, all of them are protected with the same insurance plan.
This is ultimately the key factor in deciding whether to buy short-term or annual production insurance. Suppose a producer only expects to fund one small project or two at the most. In that case, it is likely wiser to purchase short-term production insurance. However, if a producer expects to tackle multiple projects with a steady flow of productions, annual production insurance will typically be more cost-effective in the long run.
Premiums & Payments For Production Insurance
The exact cost of production insurance is impossible to generalize, as each production will have different needs and a different budget. Industry wisdom often states that about 2-3% of a production’s budget should be spent on insurance.
With short-term and annual production insurance, the premiums fit the coverage. Short-term insurance premiums paid monthly are unlikely to exceed $100. Annual insurance premiums, paid in one lump sum for the whole year, are usually lower than $1000. And while the price increase may seem substantial, an active producer will save money with the annual premiums in the long run.
Find An Insurance Provider That Fits Your Project
Regardless of which route producers take to insure their productions, they will need the collaboration of an insurance broker. It is wise to work with insurers specializing in film industry coverage, whether for short-term or annual film production insurance.
The experts at MFE Insurance work closely with film producers to protect their most vulnerable elements and equipment. Contact MFE Insurance to share the details of your productions and discuss the types of coverage that would work best for your projects.