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Risky Business - Film and Video Insurance

Risky Business - Film and Video Insurance

Don't put your livelihood and creativity at risk. Film and video insurance is a must for most video business people, to protect you, and your product.

The term "Risky Business" likely conjures up the iconic coming of age movie that first put Tom Cruise permanently on the star map. Unfortunately, the term Risky Business for many videographers and small production houses may refer less to the classic 1983 movie and more to the way they run their video production businesses day to day.

The use of insurance to hedge against risk is commonplace in our society, yet many video production artists and technicians are risk-prone, never having heard of, let alone used, industry-specific insurance like film insurance or Media Liability Insurance. If these terms are new to you or only vaguely familiar, chances are that you and your video production business may be under-insured.

Categories of Risk

You may first ask yourself - why? Whether you're a hobbyist, sole proprietor or own a full-blown video production company, why would you want to incur additional expense by looking for industry-specific insurance in the first place? The simple answer: To ensure your creative future in video production from two basic categories of risk.

Risk of Loss/Damage: Odds are that you already have, or plan to invest, many thousands of dollars into your video production equipment. Protecting your investment against loss or damage is the most basic of all reasons to evaluate your insurance needs.

Risk of Liability: Beyond the basic protection of your video production equipment is protection from the not-so-basic risk of liability. Liability isn't about protecting your equipment from loss or damage. It's about protecting you and your long-term ability to do what you love - video production. Just as the implications of liability are much broader than those of simple property loss or damage, the cost to limit your liability is equally broad (i.e. more expensive).

Risk in the real World

Property Loss: Examples abound of videographers losing equipment from accidents or theft. Several upgrades into my own video production career, my first HD camcorder along with some RØDE sound equipment were stolen from my vehicle in broad daylight. Thankfully, the equipment was insured. To this day I still have and use the pro-level camera I upgraded to, thanks to a down payment made possible by the insurance claim.

Another example is from well-known film and video DP, Philip Bloom, who reportedly lost his new Panasonic Lumix "beloved GH2." on a shoot in Sydney, Australia. A freak gust of wind lifted the camera, with 3D lens, timer and tripod, four feet into the air and over a wall into the water of Sydney Harbour. This brief moment likely cost several thousand dollars. Needless to say, property insurance against loss or damage is always worth the rather minimal cost of coverage - more on that later.

Liability: On the other side of the risk spectrum are examples of loss due to liability. A report of a wedding videographer being sued by his clients for a "bad wedding video" recently made national news. The couple was awarded nearly $1,000 from the videographer who produced the unacceptable video. (For the record, I've seen the video. Let's just say, it's not good.) All parties suffered loss in this case. The couple lost what should have been a keepsake video of their wedding. The videographer lost the money he would have made, his time and most importantly, his reputation as a video professional.

High profile and high dollar insurance claims go hand-in-hand with cases of liability. In another recent case, famed director Michael Moore was sued for using 71 seconds of home video in his documentary film Sicko, allegedly violating copyright and privacy rights. After a long and expensive legal battle, the two sides settled, for undisclosed terms.

In a final example of liability, a southern California production company was successfully sued for a video production gone awry. The film and exercise were to be used as training for soldiers serving in Iraq and Afghanistan. During the production, the plaintiff suffered injuries from a staged interrogation using actors as interrogators and weapons loaded with blanks. The production company and the actor were ordered to pay the plaintiff $91,000.

These examples of loss and liability in video and film production have one thing in common. Insurance was either used, or could have been used to replace, make restitution or defend the legal rights of parties in each of these varied situations.

First Line of Defense

Homeowner's Insurance: The first line of defense against risk in terms of insuring your video production equipment is also the weakest. Homeowner policies, the least expensive and most common types of insurance, can add a limited degree of risk management to your video production pursuits. The key word here, however, is "limited"- very limited. In fact, if you consider your video production a for-profit business, the most ample homeowner's insurance policy, will have "business exclusions" that will leave you out in the cold during the heated investigation of an insurance claim. Insurance companies can and do rightfully deny claims of loss and liability in cases where basic homeowner's protection tries to extend its coverage into the realm of for-profit business.

Second Line of Defense

Commercial General Insurance: CGI, also known as a Business Owner Policy, is a close runner-up to Homeowner's Insurance in terms of coverage and cost. However, Business Owner's Insurance is broader in scope; coverage for both property and liability are extended into the film and video production workplace. Coverage limits can be tailored to cover all of your production equipment and property, including real property, while also increasing your liability coverage. A small production company, run from a home office, may pay as little as $300 to $400 annually for entry-level business insurance.

Commercial insurance, compared to homeowner's insurance, is a far better risk reduction tool for any video production professional, however, it too has limitations. Changes and additions known as riders or endorsements are common, and in each case, bring added expense to the bottom line. Examples of common endorsements used to augment coverage are cost replacement endorsements, scheduling, unique or expensive pieces of production equipment, and clients that may also require you to name them as "additional insured" parties on your policy. Any one of these many riders and endorsements, if overlooked, can become a limitation of your video productions' business insurance.

Last and Best Line of Defense

Liability Video and Film / Production / Media Liability Insurance: You've now entered the realm of specialty insurance for film and video production. Video and Film Production Insurance and Media Liability Insurance are terms used for insurance sought by both media outlets and production companies of all types.

Film and Video Production Insurance refers to "packaged" business insurance with added industry-specific coverage for items unique to the world of film and video production. Some examples of the unique types of coverage: special event liability, multiple locations, multiple vehicles, multiple cameras, cranes, film stock, re-shoot coverage, etc. These policies are often sold as a "DICE" policy (Documentary, Industrials, Commercial, Educational) for video production companies or a "Producers" policy for feature films and other time-limited productions.

Media Liability Insurance is a type of professional, industry-specific "Errors & Omissions" insurance. E&O Insurance is intended to limit your risk from professional errors that violate the rights of others. Its laundry list of liability coverage is impressive as it applies to copyright, trademark, and patent infringement, as well as invasion of privacy, liable, slander, defamation of character, unfair competition, and extended personal injury liability.

Film and Video Production Insurance is a type of business insurance, and is therefore more common. However, it is often used in tandem with Media Liability Insurance. While each of these production insurance types has a similar entry-level cost of around $500 annually, Media Liability Insurance is typically the more expensive of the two, with an average annual cost closer to $1,500 to $2,500 depending on production volume. Although relatively expensive when compared to their lesser insurance counterparts, they often prove to be worth many times their cost. They can be tailored to meet the needs and budgets of both the sole-proprietor and the largest of film studios.

How Much is Enough

To best determine how much production insurance is enough, you'll need to equip yourself with information by speaking to one or more experienced insurance agents. Making an informed decision is the goal. Where comfort levels of risk intersect with budgets and needs, is where the reality of "how much is enough" is determined.

Getting it Right

A final film reference seems apropos in summary: In the film Groundhog Day, Bill Murray's character, Phil Connors, was able to relive the same day over and over until he got it right. "Getting it right" included purchasing insurance, lots of insurance, from his former classmate-turned-insurance agent, Ned Ryerson. Unlike Phil, in the event of a dropped camera, a lawsuit from errors and oversight, or any number of potential mishaps, we won't be able to reverse the clock in the name of "getting it right." In that moment, for better or worse, our loss, liability and options will have been largely determined for us based on our levels of video production insurance, or lack thereof.

The bottom line is this: There is no cost whatsoever associated with evaluating your video productions' industry-specific insurance needs. Conversely, the cost of not knowing and the result of "risky" business-as-usual could have the potential of jeopardizing your future ability to shoot, edit and create for both you and your clients.

Sidebar: Disclaimer: Legal Information Is Not Legal Advice

This article provides information about the law designed to help video producers cope with their own legal needs. But legal information is not the same as legal advice - the application of law to an individual's specific circumstances. Videomaker does not provide legal services or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation.

Groundhog Day Insurance

A.K.A. No insurance. You'd rather repeatedly step in a pothole of cold slush than talk to an agent face to face about insurance. We jest - no coverage should NOT be an option.

Homeowner's Insurance
Property, content and personal liability insurance for home and family.

Commercial General Liability
Business Owners Policy for property structure and contents, and general liability insurance.

Video and Film Production Insurance
Business insurance with unique coverage for video and film production.

Media Liability Insurance
A type of Errors and Omissions insurance for digital, print and broadcast media.

Common Riders/Endorsements/Additional Policies
  • Cost Replacement Endorsement
  • Scheduled Personal Property Endorsement
  • Home-Based Business Endorsement
  • Additional Insured Rider / Additional Named Rider
  • Commercial Inland Marine Policy / All Risk Floater
  • Excess Limits Liability Policy
  • Personal All-Inclusive Umbrella Policy
  • Special Events General Liability Policy

Mark Jensen is the owner of a video production company specializing in commercial and industrial video. He is also a freelance technical writer.

Tags:  February 2012
Mark
Jensen
Wed, 02/01/2012 - 12:00am

Comments

glentibbits's picture

A really good and timely article. I have been concerned since a child walked right into my tripod getting a bonk on the head. I was wiggling for several days waiting on a law suit that thankfully never came
Anonymous's picture

I'm glad someone has posted this. So many filmmakers ignore how important having proper insurance is. I know many think, oh this won't happen to me I'm very careful. Insurance is for those things we can't think of. I recently got my insurance for my video gear at Film Emporium. I highly recommend them! http://www.FilmEmporium.com
Chet's picture

this was a very well written article. it is very important that if you are doing business that you get a business owners policy. http://www.tcpinsurance.com/hd-film-video/ is a website where you can generate a quote within a couple minutes. Homeowners policies do not provide the coverage, and will often exclude any coverage for video equipment if found for commercial use.

ldance's picture

Great timing.  But one question.  I already have business insurance covering my equipment and liability.  However, I'm about to head off on an expensive shoot in the Ukraine where I'm told theft is a problem.  I'm bringing a crew, spending lots of money, and I wonder if there's insurance I should be purchasing to cover loss or theft of the footage we acquire.  When I called my insurance company, they seemed clueless.  If our footage is stolen, is it possible to insure for the cost of the production?

Ed's picture

My local videographers association recently had a presentation by a local wedding videographer that told one of the most gut-wrenching stories I'd ever heard. He endured a major lawsuit and was nearly put out of business as a result of dropping a hard drive and losing the raw video of a dozen weddings. While most of the couples settled with him, one decided to sue him for $45,000 and won. He had no E&O insurance, was not incorporated and did not have a well-written  contract.

 

E&O is "errors and omissions" insurance which would have likely paid the claim to the bride. Instead, he had to settle with her and pay the claim out of his pocket.

 

He has since recovered but his reputation has suffered a bit, although he is always transparent about the issue with potential clients. 

 

If you're in the business, get insured. It just may save your bacon. And, consider being incorporated (LLC). That will protect your personal assets. WIthout that protection, your assets could be at risk.