new producers
by Ed K
on
Jun 3, 2002 at 12:35:04 pm
I've been seeing plenty of new producers coming into the biz and many new people asking questions on this forum. One major item not being addressed is liability and insurance.
For those of you who don't know, as a producer you are liable for a ton of stuff.
1. Liability. If a grip sets a light next to an expensive store display and a customer comes by and knocks it over into the crystal, who is liable for the $10,000 in damage? The grip, no. The cameraman who asked that it be put there, no. The owner of the light, no. The producer is totally liable unless gross negligence can be proved, which is very difficult. A million dollar liability policy is around $400 or more per year depending on a lot of variables.
2. Workmans compensation. Most, if not all states REQUIRE workmans comp. Even on freelancers. There is no getting around it, if you hire people to work than you MUST provide workmans comp. If you hire a company then that company provides comp for its employees. Without comp, you are personally liable for any and all bills resulting from any accident. Cost is usually a minimum of $600 per year.
3. Equipment insurance. Rental companies won't let gear out the door without your insurance on the gear. Your insurance co. will need to name the rental co. as loss/payee. Meaning that if the gear is lost, stolen or damaged the rental co. can go directly to the insurance co. and bypass you. Don't wait till the last minute for this as you can suffer big delays in production.
4. Production insurance. You have a big setup with cast, crew and equipment burning cash. The shot doesn't go down on tape properly and it's not caught till it's too late. Who's liable for the reshoot? The camera owner? No. The engineer? No. The cameraman? No. Again, the producer. Eastman Kodak established that if for any reason their film was defective they would provide a free replacement roll, period. That is the industry standard now. Hollywood and around the world buy 'negative insurance' to cover anything that could happen. Cost is around 4% of the production cost. I don't know the minimums.
I could be off on some of the costs for a number of reasons, these are just to give you some idea. Talk to an industry knowledgable insurance agent and hold on to your wallet.
Those of you who have experiences in this area please feel free to chime in. And correct me if I'm wrong on any of the topics here. For those of you new to the biz, take these things seriously as they can really bite you. Just the delays from being shut down can cost plenty.
Re: new producers by Jay Childs on Jun 4, 2002 at 8:13:40 pm
Excellent points Ed. Its just a fact of life that needs to be addressed. Also certain potential clients - for example I have been in the business for about 15 years - and an independent producer for 6 years.
I should probably ask my insurance provider about this but, what the heck, bring it up here. I THINK I remember in some situations that I worked in where I was not the producer, that some companies with a certain business insurance policy could take out ala carte - "by-the-project" liability policies on people that they hired. I do it the standard way you mention - but for those where the combined costs for ongoing coverage may be onerous, has anyone heard of "sunrise and sunset" policies to cover liability for the term of a specific project. I imagine its even MORE expensive to do it this way - but just curious.
Re: new producers by lerman on Jun 5, 2002 at 2:42:27 pm
You're right, Ed. Insuranace is part of being a producer and since 9/11, the cost has gone up dramatically. What's more, the options for "buying as you need it" have narrowed. At least, in my market anyway.
I got my start in this business as a scriptwriter and even today, about half my income is from writing scripts for other producers and media outfits. The other half from producing projects as an independant. In the past, if I was in a long streach of just writing scripts, it made sense to let my policies lapse and then take out new ones as producer gigs started coming in. After all, it only took a few days to set up and the cost was the same.
It was a different story this year. For the last few years, for about $500, my agent was able to provide a year's coverage for General Liability (2 Mil annual), loss/lease equipment rental, along with coverage for the small NLE system I maintain in my home. Since I seemed to be in one of those "scripting" only streaches, I was going to let those policies expire and get new ones later. Thankfully, my agent contacted me and let me know that if I did, I won't be able to get the $500 deal anymore.
Seems the one carrier who offered this policy wasn't issuing new ones, only renewals. If I hadn't renewed, the only options I would have had later would have cost me thousands for the same level of coverage, and would have taken weeks, not days, to get into place. According to my agent, 9/11 has shook up the liability industry pretty bad. Low-cost policies like the one I had (and yes, I renewed) were drying up if not going away all together. And while I didn't ask for the numbers, I got the impression that project-specific policies were also becoming harder to get and certainly more expensive.
All-in-all, the news for the independant who only produces a handful of projects a year isn't good. Having the right insurance in place is vital, but it's also taking a bigger bite out of your proft margin.
Anyway, just passing on my experience in this area. Like you, I'm curious how others are doing in this arena.
Re: new producers by Osias Encarnacion on Jun 25, 2002 at 3:55:45 pm
Could anyone recommend insurance companies that provide liability, equipment, etc. insurance for indies? or at least a reference source? I've gone through a few websites and indie organizations and have only found a couple of insurance companies.
