Location, Weather, Animals, Illnesses Make Insuring Movies Risky Business

Rating the degree of risk for a movie runs the gamut, says Wendy Diaz, directory of underwriting for Fireman’s Fund entertainment division.

“It just depends on the film and the details of the film,” Diaz explained.

The most risky film to insure in 2007 was “Into the Wild,” the Sean Penn-directed production about a young man who abandons a normal lifestyle to explore the Alaskan wilderness, according to Fireman’s Fund.

Diaz said “Into the Wild” presented a number of risk challenges mostly due to the remote location of the film setting.

The movie was shot in several rugged locations of Utah, Montana, North Dakota, Alaska, Oregon and Arizona — so medical concerns and transit and care of equipment had to be addressed.

There were a number of weather-related issues, Diaz said. “If the cameras get cold or frozen, or if the actors or actresses get sick, or let’s say they lose a camera and they need to replace it … there is time involved if they are away from civilization to get it,” she said.

“Into the Wild” also shot several scenes on cliffs and rocky ledges in the mountains and on whitewater rapids, which can prove hazardous not only for actors, but for cameramen and crew. In case of accidents or injuries, medics needed to be on stand-by with access to helicopters for transport to a medical facility.

The film also used bears in several scenes. While the bears are specially trained, there is always a risk to cast and crew when using wildlife.

When insuring animals, Diaz explained the insurer covers the actual value of the animal which is determined by how much the animal works. “When you have a bear … they actually value the loss of use of that animal for the owner.”

In addition, Fireman’s Fund had to consider potential risks regarding transportation of the bears (moved in air-conditioned RVs) and potential illnesses that could be spread by them to humans.

It’s important to find out what the animals are going to be doing, how far away from people they will be, if the trainer will be there, and how trained the animals are, Diaz said. “If you have a goat that’s one thing; if you have a bear, it’s another.”

To capture the difference in seasons, “Into the Wild” took a six-week hiatus in shooting. This could have created potential problems if the lead actors sustained illnesses or injuries — even death — while away from the set.

Fireman’s Fund can be called a veteran in the film insurance business. The company has been insuring the entertainment industry for 80 years. In 2007, the company wrote $190 million in premium through its entertainment division, which writes 80 percent of the worldwide film market, according to Diaz.

How to Underwrite a Movie

Underwriting the movie begins with the script, a budget and an application, Diaz said. This also includes where it’s filming, who’s starring in film, any stunts that might be involved or other hazardous activities, and more.

Fireman’s Fund offers a portfolio policy for films that includes unique coverages specific to movie making, including cast coverage, props, sets and wardrobe coverage; extra expense coverage; third party property damage coverage; miscellaneous equipment coverage; faulty stock coverage; and negative coverage.

Cast coverage pays for the costs incurred to the production company due to the unavailability of a declared artist due to illness, injury or death. It is essentially “business interruption” coverage for the production company resulting from the artist’s unavailability due to covered perils.

Props, sets and wardrobe coverage pays for the value of props, etc., either owned by the insured or for which the insured is legally liable. Generically, it is related to items “in front of the camera.”

Extra expense coverage is the same as cast coverage except that the loss must occur to “things” (sets, equipment, location, etc.) rather than a person to trigger the insured’s loss.

Third party property damage coverage pays for the insured’s legal liability for real property (filming locations).

Miscellaneous equipment coverage is the same as props coverage, but related to “behind the camera” such as cameras, sound equipment and lighting.

Faulty stock coverage pays for the cost to reshoot or correct unacceptable footage due to the inadvertent use of faulty raw stock, faulty equipment, faulty processing by the lab, and faulty editing by way of damage accidentally caused by the editor’s handling of the negative.

Negative coverage is an all risk coverage that excludes the perils named above in the faulty stock coverage, with other limitations. Diaz said in one instance a claim was reported for a lost negative that had been left in a taxicab so the crew had to re-film the entire piece.

Finally, films also need traditional insurance coverages such as general liability, auto, workers’ compensation, Diaz added.

When it comes to the easiest movies to insure, Diaz says “walk/talk” films fit the bill. “There’s no stunts, no pyro, no animals,” she said. “It’s just the vanilla kind of movie as far as risk goes.”