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This chapter is from the book

Insurance

Insurance is a fact of life. Depending on your project, budget, and business structure, you may want insurance to cover certain aspects of your show. The type of insurance and amount of coverage really depend on the kind of show you want to do, your sales goals, and your comfort with risk. Your attorney can help you assess what is right for you.

Equipment Rental. Rental houses require insurance on their equipment. For a set fee, the underwriter will cover loss, damage, and theft of rental equipment.

This is a good idea. I had a rented Sachtler tripod stolen off a beach. The thing was never more than six feet away from me and everyone was wearing bathing suits. I can only think of one place the thief could have hidden it and it makes me squirm. And not with delight.

The tripod's replacement cost was $2,500. My production insurance covered it, although it was like pulling teeth to get them to come across.

Your homeowner insurance policy may cover rental equipment, but check first. Rental houses will take just about anyone as your insurer, but your insurer may challenge a claim for a business loss if it's made on a homeowner policy. Talk with your agent and rental house before proceeding.

Comprehensive General Liability (CGL). CGL covers you if someone sues you, alleging injury or property damage caused by your negligence. If you want to shoot in public streets, parks, or other property, officials will require insurance to grant you a permit.

I know some producers who don't get CGL or permits, hoping their production company corporate status will shield them should something terrible happen. Whether you do this or not depends on your comfort with risk.

Completion Bond. This insurance guarantees that the movie will not have to cease production due to lack of funds. Banks and investors usually require completion bonds.

Errors and Omissions (E&O). E&O insurance protects distributors and broadcasters from claims based on any failure you made in clearing all of the elements in your show. They may require E&O before going forward with a deal. E&O insurance is expensive and you have to fill out an application to get it. Have your attorney review your script for anything that is defamatory or invades someone's privacy before you apply for E&O. You can solve these problems ahead of time, making the process easier.

When applying for E&O:

  • Include a copyright report to show clear chain of title and do a title clearance.

  • Have releases for everyone, as well as necessary music clearances.

  • If you're using distinctive locations, get signed location releases.

  • Secure agreements for everyone who provides material, goods, or onscreen services.

  • Include your final shooting script.

The application is forwarded to underwriters who assess the risk, decide whether to issue a policy, and how much to charge you. If there's anything questionable on your application, the underwriters contact their lawyers, who in turn contact your lawyer. Your lawyer responds, and back and forth, until the underwriters offer you terms or reject your application.

Many producers don't bother with E&O until they have a deal that requires it.

There are other kinds of insurance and your insurance agent will know all about them. See the Resources section for listings of agents selling E&O and other insurance. You can also find agencies on the Internet or listed with your state's film commission.

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