Rana Joy Glickman has produced numerous independent films over the past 20 years. But on her latest project, “The Blazing World,” she did something she had never done before: she didn’t buy insurance for the casts.
Usually, it is an essential element. Without it, a production could suffer a total loss if the director or lead actor becomes ill or dies during filming. But in the age of COVID-19, such insurance is extremely expensive – if available.
“It certainly came with a certain degree of anxiety,” says Glickman. “But there are so few guarantees on anything in the world of independent cinema.”
In his case, it worked. The movie was shot for a month in Dripping Springs, Texas, and no one got sick. Glickman also had financiers willing to take the risk.
But many productions struggle to know what to do. Commercial banks do not provide completion bonds without insurance, and traditional insurers are unwilling to cover losses from COVID-19. Many projects have simply collapsed, while others are exploring solutions outside the box.
“Things are tough because the old ways don’t work,” says Kent Hamilton, president of Front Row Insurance. “Some people, in some cases, take the risk – they just went.”
Other Front Row clients have purchased a policy from Elite Risk, a newcomer to the movie and television insurance market. Owner Jeff Kleid specializes in providing crop insurance to cannabis growers. After filming Mandalay Bay in Las Vegas, he sold “active shooter” policies.
Kleid now offers film and television production insurance that covers COVID-19. The policies come with low coverage limits – typically around $ 3 million, maximum – and high premiums, around 10% of the amount covered. This is much more than what productions are used to paying.
“Ours is a small solution,” says Kleid. “We are not trying to be the solution for everyone. We’re looking to bring a few people back to work. “
Brad Krevoy, producer of Hallmark Channel’s “When Calls the Heart” and a Christmas movie series for Netflix, has purchased Elite Risk policies for some productions in Canada. Film projects have modest budgets – less than $ 5 million – and Canada has a strict 14-day isolation period for cast and crew entering the country.
“It’s a good system,” Krevoy says. “We are busier than ever.”
Arthur J. Gallagher & Co., a leading film and television insurance brokerage, works with SpottedRisk, another wholesale underwriter of specialty products. Spotted began analyzing data a few years ago to advise brands on celebrity approval deals. In the wake of the #MeToo movement, the firm pivoted to offer “shame insurance,” in which it used its data to attempt to predict the likelihood of a scandal.
Spotted now offers plaster insurance for COVID-19 and “civil authority” coverage – which pays in the event of a government-ordered shutdown. CEO Janet Comenos said policy limits range from $ 8.1 million to $ 41 million – with a premium of 7-10% of the coverage limit. The company acts as a wholesaler, selling coverage on behalf of Lloyd’s of London and other carriers.
Elite Risk and Spotted have a very limited capacity. Elite has taken on 15 projects to date, while Spotted has completed four projects. Both are seeking additional support, which would allow them to write more policies.
“The demand far exceeds the supply,” says Comenos.
Elite is a wholesaler on behalf of a captive insurance company, which Kleid has refused to identify but which others in the industry have identified as Ottawa Corporate Ltd., based in North Carolina. Ottawa is licensed by the State Department of Insurance, which confirmed via email that the company has met its licensing requirements, including submitting a business plan and financial statements. As a captive – essentially a private alternative insurer – the company is not required to make its statements public and is not covered by the industry’s independent rating system.
“A captive is as good as her financial stability,” says Brian Kingman, general manager of entertainment practice at Arthur J. Gallagher. “It’s not that transparent. So it’s a question mark.
Comenos, CEO of Spotted, said she found Elite Risk’s business model “overwhelming”.
“It’s really essential with new and emerging risks that insurance is written on A-rated paper, and that’s not the case for them,” she said. “Their article is not evaluated.”
In response, Kleid says he’s been in regular contact with state regulators, adjusting his projections as needed, but the company is still well within its risk capacity.
“My name is solid in the film and television industry,” Kleid says. “The product we are offering is new, but the people they buy from have a trust factor, and that’s me.”
Kleid also notes that he has 25 years of experience in the insurance industry, which Spotted does not have.
“SpottedRisk is a technology company that has come up with a solution for figuring out how to price things,” says Kleid. “They grabbed onto the entertainment space and were able to grab the attention… But whatever they learned in their model, there’s no way to quantify that data. You should go with who you trust. We have to do it one policy at a time. “
Kingman, of Arthur J. Gallagher, says it is disappointing that two companies “denigrate” each other. He says he’s working with both companies to try to bring the price down and find a product that will help customers.
“There is enough room in the market for two,” he says. “They are both facilities trying to fill a void in a market that is needed. We try to build each one of them and make sure they perform according to our expectations. “
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