Property Insurance For Production Firms Part II

Part one of property for film and production companies we talked about; definition of covered property, leased or rented property, accounts receivable, extra expense, and business personal property. Now let us cover some additional areas. 

Rental Reimbursement -Coverage for continuing rental or lease charges you are legally obligated to pay under a written lease or contract for covered property you rent or lease from others when that property has a loss.

Newly Acquired Property-newly acquired entertainment equipment is covered usually, for up to $10,000, for 45 days or until the expiration or cancellation of the policy, whichever comes first.

Valuable Records, Data, and Software-Record keeping is essential for any business. Your policy can include coverage to restore, replace or reproduce your valuable records, data and software.

Unexplained Disappearance-Your coverage is extended to provide up to a specific limit towards the cost to replace covered property that is discovered to be lost or missing upon taking inventory and for which you can furnish a sales receipt or manufacturer’s packaging.

Exhibitions-Equipment that is physically damaged by a covered cause of loss while on temporary exhibition is covered. Error in Repairing, Restoration, or Retouching Your policy also extends coverage to the loss resulting from your employees’ defective workmanship in repairing, restoring, or retouching covered property. 

John Hart insurance can provide your film or production company with:

• Coverage is available for a wide variety of equipment used in the arts and entertainment industry
• The policy typically covers:
•  Property in storage
•  Property in transit
•  Property owned by others and in your care, custody, or control
•  Property on exhibition
• Expediting expense, rental reimbursement, exhibitions, and other important coverage additions and basic limits can be built-in
• Coverage is available on a scheduled or blanket basis
• Limits may be customized to meet your individual needs

Note: All coverage described here would be subject to specific limits depending on policy terms.

Property Insurance For Film & Production Companies Part I

We get questions every day regarding what are the common coverage’s found in commercial property insurance for film and production companies. Part one of our series, film & production company property insurance, we will review; definition of covered property, leased or rented property, accounts receivable, extra expense, and business personal property. Let’s get to it.

Definition of Covered Property-Covered property includes your equipment and related property used in the entertainment industry including audio, visual, computer, recording, lighting and projection equipment, wardrobes, props, costumes, and fine arts, as well as similar property of others that is in your care, custody, and control.

Property Loaned, Leased or Rented to Others-You’ll have coverage for direct physical loss to covered property you own that you loan, lease, or rent to others.

Accounts Receivable- Coverage is provided to reestablish accounts receivable records damaged as a result of a covered, direct physical loss.

Extra Expense- Commonly used equipment is easily and quickly replaced. Specialized or customized equipment may not be. To help you keep your performance commitments, your policy can cover the necessary and reasonable expenses up to a specific limit to expedite the repair or replacement of covered property. We can also cover the expenses to temporarily rent replacement property until your damaged property can be reasonably repaired or replaced.

Business Personal Property-Your policy covers direct physical damage to your business personal property resulting from a covered cause of loss.           

Note: All coverage described here would be subject to specific limits depending on policy terms.

Why Insure Your Production Equipment For Replacement Cost?

Here is a quick definition of replacement cost coverage; Replacement Cost value is the amount it would cost to repair or replace an item with one of the same kind and quality as the original — in today’s market.

Replacement Cost Coverage usually reimburses you for the full cost of replacing the items you lose, rather than simply reimbursing you for the value of the item at the time it was lost. In other words, your insurance policy would pay what it would cost to go out to a store and purchase the item today.

From theatrical costumes, sets, to musical instruments, amplifiers and sound boards, from cameras, video equipment, and computers to custom-made puppets –equipment is an integral part of the entertainment an integral part of the entertainment business.

Having replacement cost coverage will allow you to continue operations after a loss with the least amount of disruption. 

Distracted Driving in the Entertainment Industry

Distracted driving is any activity that could divert a driver’s attention away from the primary task of driving. All distractions endanger the safety of the driver, passengers, and bystanders.  Many of our clients face the freeways and roads in California and the heavy traffic itself can be distracting. Here are a few facts from the National Highway Safety Association:

•  16% of fatal crashes in 2011 involved reports of distracted driving.
•  20% of injury crashes in 2011 involved reports of distracted driving.

Remember there are state laws that prohibit the use of phones while driving. California has several laws banning the use of cell phones (wireless telephones). The first two laws prohibit all drivers from using handheld wireless phones or cell phones and prohibit drivers under 18 from using hands-free cell phones. A third law bans texting while driving.

Distracted driving includes:

•     Texting
•     Calling your agent or studio
•     Using a cell phone or smartphone
•           Eating and drinking
•     Talking to passengers
•     Grooming
•     Reading, including maps
•     Using a navigation system
•     Watching a video
•     Adjusting a radio, CD player, or MP3 player

Safe Driving Prevention

• While your crew is moving props or equipment from location to location we would like to offer a few safety tips:
• Pull off the road to make a call, or have the passenger do it.
• Plan your route before you get in the vehicle.
• Always buckle up.
• Do not tailgate.
• Allow sufficient time to reach your destination.
•  Ensure your vehicle is properly maintained.

   

The show must go on...But when it doesn’t, John Hart has a solution

Most entertainment companies do everything possible to make sure that shows and productions are opened on time. But sometimes there are circumstances that just can’t be helped. Fire, natural disaster, and talent illness can cause events to be cancelled. Special Event Insurance can provide the necessary security to ensure that if something does go wrong, you and your guests are protected.

Event Cancellation Insurance/Special Event Insurance from John Hart Insurance protects production companies from unforeseen circumstances that require the show to be canceled. It would provide funds to cover deposits and other costs that may have already been paid. Unforeseen circumstances could be related to any number of things including weather, construction at the venue, or illness of the featured speaker or entertainer. Policies can be created to protect revenues or expenses for those with insurable interests should an event be cancelled.

Event Cancellation Insurance is an important insurance to consider. If a loss occurs, John Hart will work closely with you to file documents quickly and accurately so your event can go on as planned.

Conducting Safety Inspections in the Entertainment Industry

Every production company and firms in the entertainment industry must have an effective safety inspection program. While there may be certain differences depending on your operations, there are many “standards” with which all entertainment companies must comply.

The format of safety inspections varies. Some safety coordinators do visual walk-through inspections of offices, studios, or even locations. Potential safety violations should be noted during the inspections.

Safety inspections should include the following:

Document all findings during the safety inspections using notes or checklists developed by your company.

Determine how any issues found will be corrected.

Set up a timetable for the completion of the assignments and follow up to make sure they've been done.

Communicate findings to management.

Keep good records for OSHA compliance

A checklist is one of the most effective means of documenting problem areas. There are many generic checklists available, some designed for specific industries.Here are some resources:

http://www.fass.uts.edu.au/students/docs/location_survey.pdf

http://www.scad.edu/forms/pdf/safety-manu.pdf

http://www.santabarbaraca.gov/Documents/Forms_and_Handouts/Fire/Prevention/01_Fire_Prevention_Bureau_%E2%80%93_Counter_Handouts/Film_Location_Fire_Safety_Checklist.pdf

Umbrella Insurance for the Entertainment Industry

Some professionals in the entertainment industry may unsure what an umbrella policy is or what it covers. I will explain the basics of Umbrella or Excess Liability Insurance and the benefits to your company.

When you are outside and there is a light rain or breeze you generally don’t need or want an umbrella. However, if it is pouring down rain with high winds, you take your umbrella. An Umbrella Insurance policy works much the same way.

Umbrella Insurance provides extra protection or limits above the liability insurance you currently have. An Umbrella Insurance policy protects you from losing the entirety of your resources and assets in the event of a large claim. Umbrella Insurance provides limits above your primary commercial insurance program.

Here is an example: A production company leased a studio for the filming of commercials. During filming, part of the rigging fell on an employee of one of the advertisers causing major injuries. The employee’s medical expenses were $750,000 plus an additional $200,000 for two years of lost work. The production company had a primary commercial liability policy with limits of $500,000 but also had an Umbrella with a limit of $1,000,000. The Umbrella policy covered the excess $450,000 of the claim.

It is true that Umbrella Insurance may not be for every firm, but if you are building financial resources for your company’s future, Umbrella coverage needs to be part of the plan.