The risks of movie-making make it a high risk industry and insurance has to be considered in order to protect the movie-making company and investors.
Bruce Lee’s son, Brandon, was fatally shot by a prop revolver while shooting a scene for The Crow that called for the firing of a blank towards the 28 year old actor. A bullet had inadvertently been lodged into the barrel due to careless procedures by those working on the set and this resulted in a gunshot that took Lee’s life despite emergency surgery in a hospital in North Carolina. Brandon Lee’s mother filed a suit against the Edward R. Pressman Film Corp.
The post-apocalyptic film – Water World, that imagined a world without land after the polar ice caps melted was reportedly the most expensive movie ever made upon its release ($175 million). A large cause of the cost overruns came when a hurricane destroyed a multi-million dollar set off the coast of Hawaii. The Kevin Reynolds-directed and Kevin Costner- starring “Mad Max on water” adventure picture was tagged as a flop before it even opened. The film had bad press concerning cost overruns due to the difficulties of filming on water as well as behind the scenes squabbling between Reynolds and Costner.
George Camilieri, a bodybuilder and extra, broke his leg during the filming of Troy. He was operated on the following day but died two weeks later of a heart attack related to a blood clot. Ironically, Brad Pitt, who played Achilles in the blockbuster version of the Homer’s Illiad, also tore his left Achilles tendon during production. About three-quarters of the way through the film, Pitt’s Achilles faces Hector, played by Eric Bana and kills him. While performing a difficult jumping strike against Bana, Pitt landed awkwardly and injured his Achilles tendon.
Insurance coverage is already in place when a film production is launched. There are a number of speciality insurance brokers within the industry whose sole purpose is to protect a film or TV show’s production costs while shooting. This insurance also covers risks associated with cast insurance (i. e. injury, death and abandonment). Case in point: Halle Berry broke her foot while on location in Spain filming Cloud Atlas, which pushed back shooting two-and-a- half weeks to allow the actresses foot to heal. Production did however continue by filming around her injury – either in closely cropped shorts or using stunt doubles.
Along with the injuries to the cast, the insurance also covers delays caused by fire, theft, damaged film and other setbacks, and it typically totals between 0.8% – 1.5% of the film’s entire budget. This number can fluctuate, however, based on such factors as where the film is being shot or an actor’s health. “Traditional insurance can cover almost anything that impairs the ability to make a film” said Konrad Dowling, managing director of Arthur J. Gallagher Entertainment Services in Glendale California. The Gallagher Entertainment consultants have brokered the insurance for 90% of the American Film Institute’s Top 100 films. They have been involved in many high-profile claims including Hurricane Katrina and September 11, 2001 production claims as well as serious cast losses.
Production Coverage Protection
Props, sets and wardrobes
Third party property damage liability
Faulty stock, camera and processing
Money and currency
Difference in conditions
General and automobile liability
Foreign general and automobile liability
Errors and omissions
Dowling’s firm insured, in one capacity or another, two-thirds of the films that were nominated at this year’s Academy Awards. As successful as Gallagher and the handful of other insurance brokers that operate in this arena are, there are some risks that cannot be underwritten by traditional carriers. There are specialised underwriters that are able to take an added risk.
An actor wanting to pilot his own aircraft during production of a film would qualify as something left to speciality insurance, and the cost of coverage can vary depending on how many times the star intended to fly the aircraft during filming and where he is flying.
There is no shortage of actors whose penchant for party life has the potential to put a film in jeopardy. Drugs and alcohol are not the only personal risks that require extra coverage. Sometimes factors beyond anyone’s control arise. People get sick. Lori Shaw, an entertainment insurance advisor with Aon remembers, “We were involved with a TV production that was about to be launched when their anchor star was diagnosed with a life-threatening medical condition”. The insurance carrier covering the cast was not willing to take on the medical risk, which would have shut down the series before the first episode was filmed. Fortunately Aon was able to help solve the problem.
Everyone complains about the weather, but no one does anything about it. In Hollywood, the insurance industry tries, but there is only so much that one can do. You can avoid the Philippines during monsoon season. In Florida, a time other than the hurricane season can be chosen. However, even with forethought, circumstances do not always work out favourably.
Last Fall, Hurricane Sandy wreaked havoc during the filming of Noah, as floodwaters threatened the sets. The exterior sets for Noah, including the 450 foot long ark were constructed directly in the storm’s path in Oyster Bay on Long Island Sound; the damage to the area made it impossible to fully assess the costs. The $115 million film was fortunately covered by insurance. High profile film events, including the gala premiere in Lincoln Square of the Keira Knightley film
Anna Karenina were cancelled. TV shows affected included: Law & Order: Special Victims Unit, 30 Rock, 666 Park and Gossip Girl. Taping of live shows, such as Late Night with David Letterman had to go ahead without an audience.
No matter the perils, traditional insurance brokers do an exceptional job protecting film and television productions. It would be impossible to list just how many times that coverage has prevented studios from hemorrhaging fortunes after disaster strikes. Occasionally something arises that is outside the purview of the traditional brokers, and the speciality carriers fill the gap. If not for them, many films would never have seen the light of day.