Production Insurance in the Time of Covid

By Aldo Cammarota  | 

The swift, accelerated course that coronavirus took in spring and summer of 2020 surprised many across the country and world, not least of all those in our entertainment industry. Shutdowns on productions and sets happened almost like dominoes; as soon as one show would close, another few would follow suit, until most of the business was stalled and looking for creative ways to keep going. As filming has steadily resumed, many producers are encountering a new obstacle related to the coronavirus pandemic: insurance. In late spring this year, Deadline was already predicting that insurance issues could complicate a swift and seamless return to Film and TV production. Nearly six months later, many productions are, according to a recent report from WrapPRO, still struggling to find insurers that are willing to include coverage for work stoppage related to potential Covid-19 infections.

Film and TV shows commonly insure their productions against all kinds of severe financial loss. Filming on location can be expensive to insure, depending on the venue, and many companies and contractors rent equipment that must also be protected against accidental damage. And on occasion, an actor can make a mistake with rented equipment or props. Kurt Russell accidentally destroyed an expensive antique guitar on the set of a Quentin Tarantino movie, and on the set of the TV show Battlestar Galactica, Edward James Olmos ad libbed the destruction of a model ship, unaware the piece was on loan from a local museum. Or perhaps an actor doesn’t work out. Eric Stoltz played the starring role in Back to the Future for weeks before he was replaced by Michael J Fox, rumored to be a very costly late replacement. Some “troubled” stars are apparently quite difficult to insure.

For productions that began before March, work stoppage was often a standard inclusion; there are many reasons that a film could have delays or setbacks, and every day lost is costly. According to Steven Badger of Zelle, LLP, who specializes in insurance law, “The entire concept of insurance depends upon just a few people having losses that everyone contributes to with their premiums. The concept doesn’t work when everyone has the very same loss.”

“It’s like a hurricane that has hit all 50 states,” he told Reuters.  In Europe, Allianz is bracing for half a billion euro in claims. According to WrapPRO, hundreds of claims and hundreds of millions of dollars are being sought from insurers, who now have no recourse but to try and also insure their own businesses against Covid — by making their policies more conservative.

As policies have been rewritten during Covid, insurers are moving their premiums from the 1% range to 8 or 10% — a costly change that won’t affect large-budget films as much as independents. While some firms are swooping to the rescue, according to WrapPRO, many productions are instead taking their chances and gambling on uninsured shooting. Maurice Fadida, producer of The Knocking, told WrapPRO that filming without a policy was an acceptable risk, managed by careful health protocol and adherence to state and union rules. Some studios are waiting for a Congressional bailout, which is unlikely to arrive soon. The challenges of obtaining liability coverage is forcing many productions to be more conscientious, thoughtful, sanitary, and safe, all necessary (and positive) developments to come from a difficult situation.

Not every film or studio is as lucky as the pro tennis tournament, Wimbledon, that earlier this year cashed in a “pandemic insurance” they’d previously bought to protect their July event. Still, many productions are resuming or starting up. The coronavirus pandemic has forced many industries to become more nimble and creative, and as insurers withdraw protections to save their own industry, production has found new investors and managed enough solutions to keep things moving right along.

Aldo Cammarota
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