Lloyd’s Syndicate ProSight 1110 is offering independent film makers’ insurance to cover mishaps during filming, as well as failure to complete a film on time and on budget. It is the “first insurer to offer both covers in one combined product,” according to an article on Lloyd’s web site.
The coverage is known as “Complete.” It combines ”production insurance with a film bond, two forms of insurance that are usually sold separately by different underwriters.” Bringing them together under one contract is more efficient and provides improved levels of cover, explained Yvonne Cordova, senior vice president at ProSight Specialty in California.
The bond documents, which can take many months to finalize in the case of completion bonds, can be agreed much faster and therefore filming can begin sooner, she added. “One contract and one provider mean greater contract certainty and clarity of cover. And should there be a claim, settlement will be faster and disputes will be less likely.”
Cordova also explained that despite a tough few years, the film industry is doing rather well, as cinema attendance and film sales remain strong and new technology like 3D have helped make the movie experience even more popular. Independent movie makers, which are more likely to buy film completion bonds to secure financing, are also thriving, she indicated.
The success of independent films like the Oscar winning Kings Speech and Slumdog Millionaire have helped increase demand for low budget films. Buyers are again looking for new films for cinema theatres and TV, and prices paid for movies have been increasing, Cordova added. “This all points to a positive future for the independent sector and for strong demand for film completion insurance.”
Lloyd’s explained that “production insurance covers a large range of risks associated with filming, such as insurance for the cast, props, wardrobe, scenery, equipment, damage to film negatives and third party damage.
“One of the largest risks for disruption is when a leading artist is unable to finish filming. For example, Heath Ledger tragically died in 2008 part way through filming The Imaginarium of Doctor Parnassus, requiring new actors to be cast in his lead role.”
Cordova pointed out that film completion bonds, which ensure that a film is completed on time and within budget, are generally required for independent film companies that require financing from banks and investors.
Such policies are “bespoke”, i.e. individually written. They take many months to complete, and require in-depth analysis, according to Julie Abbott, Film & Entertainment Underwriter for the Syndicate. ProSight’s completion bond underwriters have film production experience and are able to look into the script, film crew, and film schedule, and sit with directors and producers to make sure the film can be completed on time and within budget, she added.
Lloyd’s pointed out that ProSight has already insured over 170 films in the US. It acquired Lloyd’s Syndicate 1110 late in 2011. The acquisition “enables ProSight to offer its specialty products, including its media and entertainment insurance products, in many more countries using Lloyd’s extensive network of international licenses.”
The film industry is now truly global, and the need for international cover cannot be overstated, Cordova stressed. For example, Hollywood blockbuster 300 was written and directed by Americans, produced by an Italian, showcased Scottish, Brazilian and English actors in key roles, and was shot in Canada. “We are now set up to write production insurance and completion bonds on an international basis through our Lloyd’s syndicate,” Abbott noted.
The international completion cover will be of particular interest to companies making films in countries that offer tax incentives to entice production companies overseas, such as the UK, Ireland, Canada and parts of Europe.
Source: Lloyd’s of London