Insurance for indies...

...and the rest of us.

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enting, as opposed to buying the equipment you need, has tremendous advantages. You can choose exactly the equipment that you need for each job and can get that special lens, a better camera, and everything to go with it at a fraction of the cost of purchasing it. The rental company buys the equipment with the idea that it will be paid off by various customers over time, and takes a moderate risk in doing so. You, the customer, only have to come up with a small fraction of the cost of purchasing the equipment. In exchange, the rental company, who has no control of what you do with the gear once you leave the rental house, wants to know that you are “good for” the unlikely and seemingly impossible loss or damage to the equipment or any third party. Well, since most of us don’t want to take that risk ourselves, we have someone else do it for us – an insurance company.

Insurance is ubiquitous in business.

Every business has some form of insurance to cover the unpredictabilities of life.If you own a store, you’re going to want to have a pretty healthy general liability policy that will cover slip and fall accidents on the premises. If you perform services for other people, i.e. if you’re an attorney or a physician, you’ll need insurance for the type of business you’re in; for doctors that would be malpractice insurance, for lawyers, that would be professional liability insurance or legal malpractice insurance. If you’re a landlord, you’ll need to have rental property insurance, and if you’re renting commercial property, you’ll require that your tenants have insurance and prove it or you won’t rent to the business. Anyone who exposes their business to risk – and the nature of business is to take risks – needs and wants insurance. Filmmakers? They need a whole range of insurance coverages depending on the extent and type of work they do, from commercial general liability to errors and omissions coverage to auto liability as well as rented equipment coverages, but I’m only planning to talk hereabout what you need to rent from us.

Production insurance and renting equipment can be equated with registering a car in California. The State of California doesn’t require that the owners of cars have insurance. California requires vehicle owners to take financial responsibilty for the unintended consequence of the operation of a motor vehicle on the street. They have an alternative to taking out an insurance policy: give them $35,000 in cash. They’ll hold onto it, just in case you get into an accident. Probably not the best place to store $35K. Personally, I’d rather pay a small(er) amount per month to someone else (an insurance company) who will pay on my behalf if something happens and keep the rest of the money in my own bank account.

So, if you think of the rental company as the State of California, and yourself as the owner of the car, technically, no, you don’t need insurance to rent equipment. But you do need to prove to the rental company that you have the means, and are willing, to pay for any inevitability up to the $1M that we require you to have in the amount of liability insurance. And by any inevitability, this includes not only the return of the equipment in the same condition that it was rented to you, but also the slim but real possibility that someone may be hurt or property may be damaged while you’re using the gear. When the unfortunate happens, the injured will want to be compensated, and generally, they will ask everyone to pay. Most of the customers we rent to, from HBO and Showtime to BuzzFeed and Red Bull to indie film and television commercial producers, find insurance a convenient and practical way to show they have the means and the will to pay if necessary – not to mention the economy of paying someone else to take the financial responsibility for what might happen on your watch.

When you buy an insurance policy for your business, that policy only covers your business, unless you specifically ask the broker to extend coverage to another business as they may require. The owner of a commercial property will require that their tenants carry liability insurance, and then extend that coverage to the property owner. The insurance broker handling the policy will confirm this extension of coverage by creating a Certificate of Insurance, which is only valid with respect to the business relationship between the landlord and tenant. How is this relevant? When you purchase an insurance policy, it only covers your own company until you have your broker extend coverage to the companies you want to do business with; in this case, to the company you want to rent from, Digital Film Studios.

Getting a policy from a broker that understands the motion picture business is a great idea – they often have specific policies developed with their underwriters (even bigger insurance companies that back up the ones you will have your policy with) that are designed to cover the activities that we do in production, usually saving you money. Plus, they will often be familiar with your vendors and are very adept at producing certificates of insurance in a timely and correct manner, making it easier for you to do business.

Alternatives to buying your own insurance policy.

Why buying insurance is really the best thing for your production.

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he smartest way to protect your own production is to buy your own insurance policy, whether for yourself or for your company. This means you’ll be dealing directly with an insurance broker, and any claims will be in your name. But wait, you say, buying a whole insurance policy is expensive! It’s going to impact the rest of my production! I can’t afford that! We’re aware of that – and we’d like to point out that the cost of insurance may be offset by the savings that it may create. Creating anything has its inherent risks, and everyone you deal with, not just DFS, will want to know that you can take responsibility for what you do in the process. If you don’t show them that you can do that before any incident by buying a policy, they may refuse to work with you. If they do choose to work with you, they will certainly make you take responsibility after the fact should there be an incident. They may charge you higher rental rates for the privilege of renting without providing insurance coverage. You may need to rent other equipment or vehicles – the policy can help you there, say by not having to take the collision damage waiver when renting a car or truck. Maybe you need to rent a location – there are many locations in Los Angeles and California that can be had virtually for free, but only if you have insurance!

Now, you may be thinking to yourself, my shoot is only a few days long. No problem, many brokers will sell you a policy that lasts only for the time that you need it, saving you money for that one shoot. If this is the only shoot you may do this year, this could be a great option. My recommendation is that if you do get a ‘short term policy’, that you pad the number of days that you are shooting – I’ve seen policies that end on midnight of the last day of the shoot, which meant that the coverage would have ended in the middle of an all nighter. Give yourself your own insurance policy – get a little more than what you need in case things don’t go strictly as planned.

Money for nothing…

Paying for “coproduction insurance” isn’t necessarily paying for insurance.

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f course, some of you may be thinking, I don’t need insurance, I can just get my friend who has a production policy to cover my shoot. This is possibly the biggest fallacy in the motion picture business with regard to insurance, and it’s grown in popularity recently. Why is this a fallacy? Because the insurance companies will always check to find out what the real relationship between the company doing the business and the company that they’ve agreed to insure is. The company that is named on the insurance certificate is the company that they have agreed to look out for, and unless that company has specifically paid for a policy that allows them to co-produce projects with other companies/entities/persons, the insurer won’t recognize the third party – YOU – and you’ll be left holding the bag if something bad happens. To use the car analogy again: why would an insurance company cover a car that you didn’t tell them about or pay for? There are of course exceptions to this, but you can’t take proof of insurance for your neighbors Prius to the DMV and expect them to let you register your SUV – even if you let your neighbor use your swimming pool in exchange.

In conclusion…

If you’ve made it this far, you should now have a much better understanding of what type of insurance you need as a filmmaker, where to get it, and what it takes to rent equipment from Digital Film Studios. If you have any additional questions, please contact us.

 

COI? What's that?

All insurance policies have different types of coverage.

At Digital Film Studios we ask that you have three different types of coverage:

General Liability
Automobile Liability
Miscellaneous Equipment Coverage

If you don’t know what this means, read on, dear filmmaker!

Now that I know I need insurance, where do I go?

Long Term policies: NFP aka Insurance West www.nfp.com

Short Term policies: Athos Insurance www.athosinsurance.com

Why I’m qualified to write about this topic.

I’m a cinematographer. Am I an insurance expert? Well, not a legal expert, but I have been involved in some way in the rental business since I rented my first lens and c-stands from F&B Ceco in New York. (And you’re right, I was only 12 when that happened…) I’ve also produced a few jobs myself as well, so while I’m not qualified to be an insurance agent, I do know what it takes to rent equipment and stage a production, and I’d like to pass that knowledge and experience along to anyone who finds it useful.

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