Lack of insurance threatens supply of films

Insurers say they cannot offer coverage for Covid-19 related costs in film productions

NEW YORK:

Insurers have largely stopped covering independent film and television productions against the risk of Covid-19 illness, a shift that threatens the supply of new entertainment in 2021, Hollywood producers, insurers and industry experts believe.

As filmmakers try to get back to work they are finding insurers have largely stopped providing the Covid-19 coverage they need to secure financing.

Some insurers are even adding exclusions for Covid-19 or communicable diseases to existing policies when cast members get medical exams, insurance lawyer Kirk Pasich told Reuters.

Without coverage, many producers cannot get the completion bond, or guarantee, that banks require to lend to productions.

Until crews can work safely again and insurance covers Covid-19 related costs, “there will be less content of the caliber that we’re used to,” independent film producer Robert Salerno told Reuters.

Insurers, already reeling from other pandemic claims, say they cannot offer the coverage because it is unclear how the pandemic will play out.

Although some countries have controlled or eliminated the virus, cases have resurged elsewhere, including the United States.

“It is not a risk you can even price,” a senior insurance executive, who was not authorised to speak publicly, told Reuters.

Media Guarantors Insurance Solutions, which provides bonding, has seen business fall 80% during the pandemic, said Chief Executive Fred Milstein.

While big studios can self-insure, independent producers, who turn out 70% of new films and numerous TV shows in the US each year, are looking for alternatives, said Jean Prewitt, chief executive of the Independent Film & Television Alliance.

Budgets are up 10% to 30% as producers add safety measures on set and rewrite scripts to reduce infection risk, Prewitt said. Nicolas Chartier, producer of the Academy Award-winning film The Hurt Locker, is feeling the effects. His Voltage Pictures production company planned to film sequels to the romantic drama After in September. Both are on hold because insurance is unavailable, he told Reuters.

“You cannot get a completion bond because right now insurance doesn’t cover Covid-19,” he said. “Everybody is worried about the film being abandoned.” Projects costing $1 million or less can be financed with cash, but still face health risks, especially for plots with romance or fight scenes.

“So you need to shoot two people in a room, two people talking outside on a bench,” Chartier said. “Not exactly the most exciting film.”

Independent producers are also looking for private investors to provide insurance, or moving to countries that have government backing for pandemic risk, said Brian O’Shea, chief executive of The Exchange, a film sales, financing and production company.

O’Shea sold two films last month at “virtual Cannes,” an online version of the famous Côte d’Azur film festival. With $10 million in financial commitments for each film, he wants to shoot this year, and says government backing would help.

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