08 Dec Film Company Accountants Work Hard Behing the Scenes
Film makers who produce feature films, television programs and advertising commercials carry filming insurance coverage for property associated with making films and extra costs resulting from unplanned events that are likely to happen during film production.
There are four basic types of filming insurance coverage.
• Cast insurance that covers the cast and film crew.
• Errors and omissions insurance which covers the risk of lawsuits for libel and other issues
• General film production insurance which provides insurance for a range of general risks and industry-specific risks such as set damage.
• Completion bonding which guarantees that a film will be completed.
Filmmakers who wish to film on location are typically required to obtain a film permit from the local authority that is responsible for the location. Close consultation between local authorities and film companies is essential to co-ordinate street closures and traffic management during filming.
To gain approval of a film permit a film company is required to provide evidence of carrying adequate filming insurance. The City of Los Angeles requires applicants for film permits to carry commercial general liability insurance naming the City as an additional insured. For most City of Los Angeles locations the makers of motion films and television programs are required to carry at least $1,000,000 coverage. Coverage limits are higher for some locations and circumstances, rising to $3,000,000 for water areas administered by the Harbor Department and $5,000,000 when aircraft are used.
These insurance products highlight the many financial risks of making films. We constantly read about the stars, but reading about filming insurance reminds us that film company accountants must be very busy, too.