Films Can Be Risky If Loss Control Is Lacking On & Off The Set

When evaluating independent films and DICE (documentary, industrial, commercial and educational) productions, look carefully at four key categories: budget, schedule, content and cast. Well look at each area one by one.

Budget:

Production companies need to present clear and reasonable budgets for their productions, showing they have enough money to do what they want to do without cutting corners. This is important from an underwriting perspective because when budget pressures come into play, risk increases.

For example, a producer who budgets $1 million for a commercial that calls for special effects and stunts is probably going to be looking for every opportunity to cut costs. However, when stunts are required, producers need to have enough money in their budgets to contract with reputable and established stunt coordinators.

Cutting costs may mean the producer could be tempted to hire cheaperand oftentimes less reputablestunt coordinators to do the job, which ultimately increases the risk of accidents or injuries.

Schedule:

A reasonable and thoughtful shooting schedule is also critical to managing production risks.

Is there enough time built into the production schedule to allow for unplanned delays? Is there enough money in the budget to support the production schedule?

Producers need to anticipate the unexpected and have a schedule that has some wiggle room. Producers also need to have enough in their budgets to cover costs of delayed shooting schedules.

For example, a music video script may call for filming in the New York subway system. Shooting has to be done during the weekend hours to minimize the disruption to subway riders.

However, during the weekend that the shooting is scheduled, the crew experiences camera problems and retakes are needed. The crew must now wait until the following weekend to get access to the subway.

The producer should have enough time built into the scheduleand the budgetto accommodate these types of delays.

Content:

DICE productions can present a whole range of exposures, from the mundane to the thrilling. Insuring a fishing documentary is worlds away from insuring a commercial where someone jumps out of a plane.

Producers need to be clear about the purpose of the production, what stunts are required, and how subcontractors will be used.

Sometimes underwriters do find themselves in conflict with the creative people, who have a tendency to think that no one is ever going to get hurt. But insurers need to understand the directors intent from a stunt and how it will be done.

Can a stunt be done with the use of computer graphics and the "magic of film," or does the stunt actually have to be performed?

If stunts are required, who are the subcontractors? Are they reputable, and do they have a solid track record? Do they know what theyre doing?

Does the producer have clear contracts that specify where liability falls in the event of an accident or injury?

For example, a television commercial producer wants to use live alligators in a production. At a minimum, the producer should have a certified animal trainer present on the set.

The producer will also need to be clear about when the cast and crew will come into contact with the animals and how these situations will be managed. Whats the plan if the alligators get loose? Who will catch them? How will the producer ensure the safety of the cast of the crew?

A producer needs to have specific plans and procedures in place to minimize all potential risks.

Cast:

Cast protection insures productions for extra costs incurred in the event key cast members are unable to perform.

Most DICE productions dont require cast coverage because they arent relying on "star power," but in situations where the actors and directors are critical to the completion of a production, producers want to insure against the risk that these key players may become ill or injured, causing the project to be delayed.

When cast coverage is required, insurers will want to know if the key players are healthy and if they have a history of illness or injury.

The players should also have a proven track record that shows they are willing and able to honor their commitments and complete projects.

While schedule, budget, content and cast issues should all be considered when looking at DICE productions, insurers also need to pay attention to potential property losses.

A camera thats stolen because it was left unsecured on a set, or an expensive diamond necklace that "went missing" because the producer didnt set up a good prop inventory system, can end up being some of the largest claims for DICE insurers.

In the end, successfully insuring DICE business comes down to creating strong partnerships between producers and their insurers.

Insurers, agents and brokers must know and understand this business to manage these risks effectively and ensure proper coverage. In addition, DICE producers must adhere to solid business practices and be able to demonstrate proven track records for success.

Jon Paulsen is chief underwriting officer of St. Paul Travelers National Programs division and leads the companys newly created Entertainment Unit.

Reproduced from National Underwriter Edition, January 27, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.