Wednesday, September 24, 2014

Common Mistakes Made When Purchasing Entertainment Insurance

There are a number of common mistakes some entertainment companies make when it comes to purchasing insurance. Insurance is the product you buy in case the unexpected happens. Unfortunately, by the time you need it, it's too late to make sure you have the right type and amount of insurance coverage. Make sure you don't make the following mistakes while buying business insurance or personal insurance.

Common mistakes

Not using an agent who knows and understands the entertainment industry
The staff at John Hart Insurance has over 60 years combined experience in the field of entertainment insurance.  We focus exclusively on understanding the unique needs of motion picture, television, video, music and theatrical companies.  This knowledge base allows us to structure an insurance program specifically for each client that will be a balance of the best coverage and most economical solutions to help them manage the risks inherent to their unique businesses.

Having two agents is better because they keep each other competitive
Having two agents duplicates effort and can create coverage gaps. For example, there are certain coverage’s that can be included under a liability policy and auto policy. One agent is better able to manage your entire insurance program.

The lower the premium the better- wrong
Premiums are determined by a combination of exposures and coverage. If you get a lower premium you may be missing needed coverage. For example, does the lower premium include replacement cost   coverage on buildings and equipment?

The internet is a great place to get good insurance deals
Low cost internet insurance usually allows you to select the coverage and limits you want. But in most cases you end up with a limited and inadequate program. You find this out after you have an uninsured claim.

Mexico? No problem, we are covered
If you travel to Mexico as part of your production, we recommend special foreign coverage.

There isn’t anything I can do to manage my insurance costs except shop low price
·         There are many things you can do to reduce your premiums, here are a few:
·         Consider increasing your deductibles.
·         Consider the vehicle model when make a purchase, some are more expensive to insure.
·         Add smoke and security alarms to your office.

Through our relationships with many A-rated national and regional insurance companies, we provide a comprehensive array of insurance products for a variety of personal and commercial clients. Our goal is to provide exceptional service while giving you peace of mind so you can focus on what you do best, create. Give us a call and let us show you how we can save you time and money on your insurance.

Wednesday, September 10, 2014

Replacement Cost For Production Equipment

You purchase property insurance to cover losses you may have to your commercial buildings, movie and production equipment, props and property. There are a number of decisions you make regarding your coverage that will determine how the loss will be viewed by the insurance company. One of the most important aspects of your entertainment insurance policy is how your property is valued; there is replacement cost coverage (RC), and there is actual cash value basis (ACV).

What Is Replacement Cost Coverage?

Replacement cost coverage essentially means that the insurance company will replace the damaged or destroyed property with new property up to the policy limit, as long as it is with like kind and quality.  This may seem simple, but it's not quite that simple in every case. If the value is not accurate, your loss may not be fully covered.

This insurance pays the full amount needed to replace the asset or property up to the policy limit. Any gradual reduction of the asset value or depreciation is not taken into account for insurance claim purposes. This can be very important in the entertainment industry with all the high valued equipment.

Replacement cost works for most types of property, however, it's not perfect for everything. A copy of a Picasso is not a Picasso, so fine art is not always covered under a replacement cost policy. It also doesn't work for one of a kind machinery or tools and dies. For those types of items you probably need to have a scheduled policy that actually agrees upfront what the value of those items should be.

What is Actual Cash Value?

ACV is replacement cost less depreciation.  For example, if you have a 6 year old expensive camera that will cost $55,000 to replace, ACV would value the camera at $55,000 minus 6 years of depreciation or as low as $7,000. The depreciation is usually calculated by establishing a useful life of the item determining what percentage of that life remains. This percentage multiplied by the replacement cost equals the ACV.

We almost always recommend RC for all customers.