Film Production Insurance: The Show Must Go On!
Film production is becoming more and more complex with average budgets increasing for each production. The inevitable glitch can cause costly delays and productions to run over budget much to the dismay of producers and investors. Stuff happens, it’s a fact! Actors can become ill or get injured; equipment can break or become damaged; and despite the fact that digital technology has made shooting much more stable, glitches or issues in production or post-production still happen.
Here’s a specific example to illustrate this. Paul Walker alias Brian O’Conner, a major industry figure and lead actor in the Fast and Furious, passed away in a car accident while seventh chapter of the franchise was still unfinished. This unfortunate event caused one of the highest insurance payouts in film history. Universal Pictures received close to USD 50 million in compensation from their production insurance covers following the actor’s death. Had they not purchased proper cover before the start of the production, this film might have been put in jeopardy.
Take the worst case scenario where a production had not purchased proper cover prior to filming: the Apocalypse Now shooting which became a nightmarish experience for the production company and the crew. Weather conditions in the Philippines often delayed the shooting and many technicians and actors regularly caught tropical diseases. A typhoon hit the island in May 1976 and flooded the shooting locations: the film set was overrun by mud and the crew wasn’t able to reestablish power nor running water. All in all, the damage reached a total of one million dollars due to the three week delay and equipment damage. This degree of unpredictability and misfortune was then intensified by the team itself: Marlon Brando was four months late on the set and did not know the script, Martin Sheen had a heart attack…
Overexpenditure caused the budget to rise from USD 17 million to a whopping USD 31,5 million once post production was finalized, as the shooting ended up lasting four months instead of four weeks.
Jeremy Hubert, Managing Director of BML Services, a specialized film production insurance broker in Asia commented on this case “It’s essential for a production to protect their budget with a complete insurance package. Zoetrope Studios could have been compensated for the financial losses caused by climatic factors with weather day cover, the ones caused by the actors with cast non-appearance cover, the material damage with proper equipment, props, sets and wardrobe cover. Whether shooting a low budget TV commercial or a major motion picture, no production should go forward without properly covering their crew and budget.”