Lights, camera, lawsuit - the risks of uninsured risks film and entertainment

Stunts gone wrong, weather delays, accidents,… there is virtually no limit of what can go wrong on a commercial film set or event. New and unprecedented risks are also surfacing as the industry navigates technological and digital disruption. Leaving filmmakers, producers and other industry stakeholders who have inadequate insurance cover, in a compromised position.

“The film and entertainment space has always been an unpredictable industry. The nature of this business is that risk is inherent and inevitable. Comprehensive insurance cover can and should protect the financial and reputational interests of production funders against unfortunate events that may cause physical damage or delays resulting in a loss,” says Kathleen Davis, Account Executive at GIB Insurance Film & Entertainment

Whether on set or at an event celebrating a movie premiere, for example, there are a variety of factors that would need to be considered, with the help of an insurance expert, when putting suitable cover in place.

From the health and well-being of cast, crew members etc to insuring the cost of props and sets, insurance cover needs to consider an extensive set of circumstances and events that may occur during the various stages of production.

“No one wants to plan for their divorce before they’re even married, but these things are a reality in life. The same goes for filmmaking, where productions are abandoned or cancelled altogether. There must be some sort of contingency plan in place that mitigates these risks and ensures stakeholders don’t come out of it drained of all resources,” adds Refilwe Morapeli, Client Executive at GIB Film & Entertainment.

As such, some of the insurance categories that are key for filmmakers and production funders to consider include Film and Commercial Producers Indemnity, which provides cover that covers all conceivable areas of on-set concerns. Accidents and injury, third-party damages, extra expenses, public liability, and employers liability form part of this. With this in place, stakeholders in the filmmaking value chain can rest assured that no matter what happens, the show can still go on.

The second aspect of a comprehensive insurance plan for the entertainment industry is Event Liability. To illustrate how this would work, imagine a catered event where the main course causes everyone in attendance to become violently ill and require hospitalisation. Event liability ensures that the event organiser is not only able to cover the medical expenses of third parties implicated, loss or damage to property, but will also be able to cover costs related to the legal liability attached to them.

It is the responsibility of the event organiser to ensure that there is a level of care for both guests as well as those who are contracted when planning an event. Although the law and various permit obligations ensure this, this is of utmost importance to take extra precautions.

With the world becoming increasingly digitised, film and entertainment is not spared. For example, while there are aspects of AI that filmmakers might embrace, its creative capabilities also raise ethical concerns. Intellectual property risks, for instance, are likely to arise where AI is so readily accessible, bringing into question the authenticity and originality of content in a big way going forward.

Other contemporary challenges arising from the increasing pervasiveness of digital technology includes cyber threats and hacking, leading to leaks of sensitive information, clips, or a film in its entirety. Social media must also be taken into consideration in the same way, where anyone with access to a smart device is capable of sharing information instantaneously.

“Uninsured productions & events can lead to catastrophic liabilities for filmmakers, production funders and event organisers collectively. Insurance solutions should be proactive to emerging trends and flexible based on the unique needs of the different role-players engaged in the business of professional entertainment,” says Morapeli.