Insurance for feature film production covers many branches, from equipment to cast and more. When selecting which insurance coverage to use, it can be easy for producers to make mistakes that lead to subpar protection and extra expenses.
In fact, making a mistake in the insurance process can cost more than money—it can even delay or end production. From legal considerations for minimum mandatory coverage to unexpected delays due to insufficient protection, films have much to lose from shoddy insurance.
Knowing which areas are commonly overlooked can help you avoid mistakes. Here are the top mistakes to avoid when insuring your feature film production.
Throwing Away the Certificate of Insurance
Once a film studio acquires insurance, it will be provided with a COI or certificate of insurance. Many teams receive this document and either store it somewhere (and then forget where later) or simply throw it away. After all, the insurance policy is in effect, so why keep the COI?
The COI is an essential piece of documentation that will be necessary any time the studio needs to make a claim. Keep this paperwork secure, but always know where it is to facilitate making claims and avoid delays.
Choosing Policies Based on the Lowest Premium
Film insurance can be expensive; expect approximately 3% of the total budget to be dedicated solely to insurance. Given the price tag, it can be tempting to go with the policies that offer the lowest premiums. However, there is often a reason why a policy costs less than similar options—usually, it comes down to the scope of coverage.
Feature film production insurance is not a cookie-cutter product. It can vary significantly among policy types and insurance agencies. Policies with low premiums likely exclude numerous common risks, leaving your production unprotected in areas where you may need that protection the most. Compare the details of the policy first and the price second.
Accepting a Policy Without Reading It
If an insurance agency offers an equipment insurance policy, many production teams simply accept it, believing it will cover “equipment,” as the policy says. However, teams should always read insurance documents carefully to check whether the coverage is appropriate for their needs.
Are certain types of equipment excluded? What sorts of risks are covered—such as equipment damage, theft, or loss? Don’t get stuck finding that your loss is not covered after it has already happened because you failed to read the policy.
Hiding Risky Elements
Insurers consider the overall risk posed by a project—and the studio creating it—when determining policy rates. Many producers think that fudging the facts is beneficial, such as being dishonest about which types of risks may be present on the set or workplace accidents that have happened in the past.
While this strategy could save money in the short term, it usually comes back to haunt the production. In fact, insurers can claim fraud and fail to pay out a claim (or work with the studio at all) if they find that they have been misled. Be honest about the risks your production faces so you can get an insurance quote that accurately represents the situation.
Cutting Insurance to Save Money
If insurance makes up such a significant portion of the budget, why bother at all? Some productions—especially those with minimal stuntwork—may avoid having insurance altogether to save money.
However, films typically require a minimum level of general liability insurance and workers’ compensation insurance. In some instances, other types, such as auto coverage, may also be mandatory. Failing to abide by these rules can lead to legal consequences and fines. Do not skip insurance coverage, both for compliance and safety reasons.
Choosing the Wrong Valuation Type
When an insurer agrees to pay out for a claim (such as damage to equipment), be sure to understand how that payment is calculated. Does the payment cover the cost of replacing the item with the same item or with one of similar quality?
Does it only remunerate based on the damaged item’s current value? These minor differences can mean a significant disparity in claim compensation.
Get Complete Insurance Coverage From MFE Insurance
Insuring your feature film production is one of the most important preparatory steps you can take to support your film’s success. However, small mistakes can lead to significant consequences. The professionals at MFE Insurance help film industry teams avoid the most common mistakes when insuring their projects. Contact MFE Insurance to purchase policies that address your exclusive needs.