Every production must take out an insurance policy covering the risks inherent to filming.
Generally, four types of risk are taken into account: 1. civil liability 2. financial loss risks 3. damage to goods or equipment 4. additional fees. Coverage for additional risks can be added when the contract is being written up. Due to the specific nature of its modes of finance, domestically financed French films rarely engage completion bonds. Completion bonds are, however, often used by international productions shooting in France. It is advisable to enlist the services of an insurance company specialized into cinema or television production.
1. Civil liability risk
Civil liability includes risks which are the responsibility of the policyholder in case of damage caused to a third party through personnel engaged or equipment used during a shoot. The production company, whether French or foreign, must hold civil liability for itself and for third parties in case of an accident:
- through a policy taken out in the country of origin, provided it is also valid in France, or
- through a French insurance company, notably in the case of a co-production. Civil liability insurance should be taken out from the beginning of preparation straight through to the end of post-production. Insurance policies are necessary to obtain most shooting permits.
2. Financial loss risks
This refers, in case of partial loss, to the additional expenses incurred when production has to be extended in order to complete photography, and in case of total abandonment, to the expenses actually paid by the insured party until the definitive closure of the shoot. There are thus two kinds of guarantee.
A. Production guarantee
Consisting of three parts:
- The «pre-pre-production» guarantee which, up until one year before shooting begins, covers all financial loss caused by abandonment of the production due to unavailability of personnel or animals.
- The «pre-production» guarantee is spread over a period of 4 to 12 weeks before the commencement of the shoot. Other than the risks already mentioned, this guarantee also covers unavailability due to flood, fire, loss or accidental damage to property necessary for the production.
- The production guarantee is valid throughout the duration of the shoot.
B. Negative insurance
This covers financial loss caused by damage or partial or total loss of negatives during the shoot, transport or laboratory processing. Errors in handling or adjustment during the shoot are excluded. The guarantee is, on the other hand, effective where shots have been lost and have to be recreated. It is important to note that the policyholder is under obligation to inform the broker or insurance company if a shoot involves acrobatics or contests. Finally, note that health guarantees do not come into effect until after a compulsory medical exam by a doctor chosen by the insurance company
3. Damage to goods or equipment
This applies to material damage affecting buildings, sets or equipment which causes delay. There are three types of guarantees:
- Portable goods guarantee: sets, costumes, props. This covers costumes, properties and set dressing in case of damage caused on the shoot or during transport or storage.
- Constructed sets guarantee. This covers partial or total destruction of the sets.
- All material risks guarantee. This concerns technical equipment (used for camerawork and sound recordings), electrical and computing equipment, and extends among other things to vandalism.
4. Additional fees guarantee
This covers material damage affecting buildings, sets, scale models or equipment whose partial or total destruction is likely to interrupt the production, bringing about additional expenses.
5. Other risks
Other than these risks, the production can insure itself against bad weather, which is defined as weather conditions which render impossible « reasonable photography ». Lack of sunshine is excluded except where otherwise agreed with the insurer. It is also worth mentioning the guarantees covering « business transport », « individual accident » and « automobiles ». Finally, certain producers take out an « error and omissions » guarantee which protects them from action undertaken agains
6. Completion bond
First available in the early 1950s, these guarantees allow independent producers to reassure the financiers whom they approach to fund their film. The guarantor commits himself to deliver the film to the financier in time and without exceeding the agreed budget. Any delay or financial excess is charged to the guarantor. This system is very widely used in English-speaking countries, especially in films made by independent producers. In France, this guarantee still remains marginal. Completion bond is, however, in current use for international productions shot in France.